The Compliance Life details the journey to and in the role of a Chief Compliance Officer. How does one come to sit in the CCO chair? What are some of the skills a CCO needs to success navigate the compliance waters in any company? What are some of the top challenges CCOs have faced and how did they meet them? These questions and many others will be explored in this new podcast series. Over four episodes each month on The Compliance Life, I visit with one current or former CCO to explore their journey to the CCO chair. This month, my guest is Mark Beyer, the Ethics and Compliance Officer at Pedernales Electric Cooperative.
In this concluding episode, Beyer discusses his move to Pedernales Electric Cooperative, the largest electric distribution cooperative in the US. He moved to the role in no small part because of his love for the Texas Hill Country (much like the host Tom Fox-see The Hill Country Podcast). In addition to moving into the CCO chair, Beyer found the risks in such a non-profit electric cooperative very different than a publicly traded for profit enterprise. Beyer has also continued to expand his Compliance Toolkit while sitting in the CCO chair.
Tool No. 11 was the lesson that the CCO could not, should not and did not do everything in the compliance arena. The ‘who’ of doing it is quite important. The company’s customers are a rural base in the Hill Country of Texas and relationships are very important.
Tool No. 12 was expanding his compliance remit to include privacy. Simply because you are a US centric business, does not mean privacy rights do not exist. While they may not rise to the level of GDPR, they exist even in Texas.
Resources
Mark Beyer LinkedIn Profile
Pedernales Electric Cooperative
Day: May 24, 2022
Welcome to a podcast series on the fight to secure Supply Chains through cross-industry innovation. Exiger sponsors this series. In this series, we will explore the ongoing efforts of Exiger to lead the discussion and enhancement of Supply Chain Risk Management.
Over this series, I visit with Erika Peters, Senior Vice President and Global Head of Third Party & Supply Chain Risk Management; Tim Stone, Senior Director, Supply Chain Risk Management for Exiger Federal Solutions; Kim Lee, Director who focuses on risk and compliance; Nick Wildgoose, a Consultant at Exiger; Skyler Chi, Director and Deputy Head of Supply Chain and Third-Party Risk Management; Andrew Lehmann, Associate Director at Exiger; Jennifer Nestor, Vice President at Exiger, Americas and Public Sector; Theresa Campobasso, Senior Director for Defense Programs; Dan Banes President of Commercial Technology, and Mark Henderson, Director of Solution Design Lead.
In this episode 2, we discuss Supply Chain issues in manufacturing and consumer markets with Kim Lee and Nick Wildgoose. Highlights of this podcast include:
- Key challenges in Supply Chain Risk Management in the manufacturing and consumer sectors;
- How manufacturing and consumer sectors can improve their approach to managing Supply Chain risk; and
- The evolving supply risk areas in the manufacturing and consumer industry sectors.
Resources
Kim Lee Profile
Nick Wildgoose Profile
Exiger Website
Exiger’s Supply Chain Explorer
Mandi McReynolds, the Global Head of ESG in Workiva, joins the show to discuss how tech solutions have made ESG reporting easier, what organizations should consider before investing in tech, and the significance of putting stakeholders at top priority, and the future of tech in ESG.
▶️ Simplifying ESG with Thomas Fox & Mandi McReynolds:
Key points discussed in the episode:
✔️ Mandi McReynolds emphasizes communicating with your stakeholders to identify your company’s societal and business values. Stakeholders consist of internal, external, and customers.
✔️ Mandi McReynolds describes how Workiva simplifies the ESG reporting process.
✔️ Internal controls are the backbone of an effective ESG program. To create processes that stakeholders can trust, have different subject matter experts to add value to the discussion.
✔️ Look at the business value drivers and societal impact value drivers of your ESG plan. Before investing in tech and talent, identify your strategic value in materiality assessment and assessment engagement.
✔️ Bring a holistic picture of what your stakeholders care about regarding ESG.
✔️ How financial value has always been intrinsically linked to ESG reporting.
✔️ Find the balance between achieving your ESG commitments and not burning dollars.
✔️ Mandi McReynolds gives her predictions on the future of the technological component of ESG.
Mandi McReynolds is an award-winning author, educator, and practitioner-scholar. She has spent her career building corporate responsibility and environmental, social, and governance divisions across four different industries. Mandi serves as the Senior Director, Environment, Social, and Governance at Workiva. McReynolds is the co-editor and co-author of Diving Deep in Community Engagement: A Model for Professional Development. She received her B.A. in Organizational Communications from Cedarville University and M.S. in Interdisciplinary Studies: Speech Communication, Women Studies, and Higher Education from Iowa State University. She enjoys swimming and playing volleyball with her daughter, Ava, and traveling with her husband, Adam.
Resources
Learn more about Workiva – ESG reporting made simple – https://www.workiva.com/.
Mandi McReynolds on LinkedIn
ESG Talk Podcast
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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.
Alan Saquella is a fraud risk practitioner as well as a Certified Protection Professional and Certified Polygraph Examiner. He currently works as a full-time professor at the Embry-Riddle Aeronautical University where he teaches security, intelligence, and fraud investigation in the business world. Tom Fox welcomes him to this week’s show to talk about how the corporate security world and fraud investigation intersect and form a union, and how this union helps to build a more effective fraud prevention program.
The Plague Upon the Corporate World
Tom wants to know how big an issue fraud and corruption are in the corporate world and how they manifest themselves. Alan believes that the statistics in the ACF report are not a true representation of fraud taking place in the real corporate world. He states, “Whether you’re a private company or publicly-traded company, there’s a lot more that goes on that’s never reported.” He remarks that the report claimed that about 50% of fraud cases are prosecuted or brought to the prosecution. From his work, he understands that less than 5% of cases are actually brought to the prosecution. With regard to corruption, Alan says that for some companies in and outside of the United States, “corruption and bribery are just part of doing business” so it will continue to flourish. Organizations usually bury cases of fraud or corruption, as they can be damaging and embarrassing to the brand’s public image and reputation. Additionally, fraud and corruption are white-collar non-violent crimes, which is why they are not taken seriously by the organization.
The Dilemma of Whistleblowers
According to the report, the ideal way to detect fraud in your organization is internal reporting, also known as whistleblowing. The government also suggests that the primary element of successful anti-corruption compliance programs are whistleblowers. Tom asks Alan if he agrees with these proposed ideas. Alan cautions, “I’ve seen it used very effectively in some organizations and not so much in others … I think all corporate investigative folks will agree it’s a key element to a fraud prevention program. Where I found it to be most successful is when it’s highly publicized.” Companies that do not advertise their fraud whistleblowing hotline are less likely to get tips, as potential whistleblowers feel less confident in reporting any indiscretions.
Fraud Prevention
Tom asks Alan what he thinks are the key elements of a successful fraud prevention program. Alan explains that even though whistleblowers are the most effective way to curb fraud in the workplace, companies must also look at the way they conduct business internally. “For example, tying bonuses to individual performance is always a risky endeavor. It tends to cause folks to take those chances and they’re right down the fence in that gray area,” he cautions. Alan advises that companies should reward based on group performance, to prevent desperate employees from committing fraud to get ahead. Additionally, companies ought to communicate with high-risk groups about fraud and fraud prevention. Alan explains that groups like sales and accounting tend to be most active in the fraud area. He also suggests that behavior-based surveys are one of the most effective programs in fraud prevention. These types of surveys give a lot more useful information than opinion surveys and it also “calls out the whistleblowers instead of waiting for the whistleblower to get to that point where they’re frustrated.”
Resources
Alan Saquella | LinkedIn | Embry-Riddle Aeronautical University
Welcome to a blog post series on Exiger’s fight to secure supply chains, sponsored by Exiger LLC. In this series, we will explore the ongoing efforts of Exiger to lead the discussion and enhancement of Supply Chain Risk Management. In Episode 2, I visit with Kim Lee, Associate Managing Director who focuses on risk and compliance, and Nick Wildgoose, a Consultant at Exiger. We discuss supply chain issues in the manufacturing and consumer markets.
We began with some of the key challenges in this sector. First, the manufacturing sector is incredibly diverse. It can be from electronics, automotive, clothing, and food, which are all vastly different, but a common denominator is the need to be cost-efficient. This makes cost-efficiency relevant to all in the supply chain. Over the past few years, Lee noted that she has seen supply chains in manufacturing and consumer sectors challenged “like never before with well-accepted practices put to the test.”
Moreover, from the macroeconomic perspective, COVID restrictions have disrupted every part of our supply chain, including air, ocean, and land freight, resulting in shortages.
Further, there have been factory shutdowns and labor shortages, which have impacted supply chains. The second type of macroeconomic factor is geopolitical. “The Russian invasion of Ukraine Russia is front and center of everyone’s mind, but there are also the China-US trade wars. In Australia, there are growing tensions between Australia and China, which has resulted in shortages in the supply chain to different degrees. These have been striking at the heart of the entrenched supply chain policy of centralizing distribution.”
Wildgoose noted that while most supply chains had responded to these issues, additional costs have been associated with the results. One of the biggest challenges is the cost of more thorough due diligence in looking at supply chain partners below tier one. This means understanding the multi-tier nature of your supply chain is critical. Before COVID-19, the only criteria was generally cost. But was, Wildgoose noted, “Suddenly COVID comes along, and you can’t operate your manufacturing lines, your consumer, sector stores without PPE, and suddenly it’s become strategic. It would be best if you also reassessed your risk management aspects. I think the other thing that companies have realized is that they need technology and data to look at this better, bring together the silos across the organization, and link up their approaches.”
Lee added that it is “a perfect time now for organizations to revisit their supply chain, risk management framework and ensure that it is fit for purpose, well communicated and understood.” This will help organizations in the current geopolitical environment manage the increasing expectations from consumers and regulatory expectations that continue to be challenging factors for manufacturing and the consumer sector. She added, “does your organization understand how far down the supply chain they have evaluated risks?”
Moreover, your organization should have a clear framework that sets out what you want to achieve. This should incorporate your risk appetite and tolerances, particularly in countries with a high perception of corruption. Other key risk areas include modern slavery and resilience, and operational efficiency. Having such a framework is important to ensure that everyone in your organization understands where the company stands and how to approach a supply chain risk management program consistently and coherently. Lee raised another issue which is around technology. The effective use of technology is fundamental to the success of your supply chain risk management program. With thousands of suppliers, you need to understand your risk profile.
We concluded by looking down the road at where supply chain risk management for manufacturers might be headed. The risks in this area are expanding. It could be cyber-attacks directed at your organization through a supply chain or ransomware claims which could bring your organization to a grinding halt by depriving your organization of key raw materials. Another key area is around climate change reporting risk, aka climate risk, from a supply chain point of view in the consumer and manufacturing sectors. Wildgoose said, “somewhere between 80 to 90%, quite often, of an organization’s carbon footprint is in its supply chain. Unless you understand your multi-tier exposure, how are the CEOs standing up to say, they’re going to achieve a net-zero?” Additionally, the financial community is looking at more disclosures around the impact of climate risk on companies. Indeed, the investment community, such BlackRock, Inc., have said that “sustainability is a competitive material issue that needs to be addressed as well.”
Join us tomorrow as we spotlight supply chain issues in IT and telecommunications.
Resources
Kim Lee Profile
Nick Wildgoose Profile
Exiger Website
Exiger’s Supply Chain Explorer
