Categories
Principled Podcast

Season 8 – Episode 11 – Part 1: Geopolitics are Impacting Workplace Ethics and Compliance Programs

What you’ll learn on this podcast episode

As the world emerges from a pandemic mindset, we confront new geopolitical realities with Putin’s war in Ukraine and increasingly fraught relations between the US and China. How is this geopolitical landscape changing the compliance landscape? In this episode of the Principled Podcast, host Susan Divers is joined by Tom Fox, the founder of the Compliance Podcast Network and aptly accredited “Voice of Compliance.” Listen in as the two discuss the impact of geopolitics on ethics and compliance and what issues should be top-of-mind for E&C leaders in the near future.

To learn more, download a copy of Tom Fox’s white paper Never the Same: Five Key Areas in Which Business Will Never Be the Same After the Russian Invasion.

Guest: Tom Fox

Tom_Fox_grayscale

Tom Fox is literally the guy who wrote the book on compliance with the international compliance best-seller The Compliance Handbook, 3rd edition, which LexisNexis released in May 2022. Tom has authored 23 other books on business leadership, compliance, ethics, and corporate governance, including the international best-sellers Lessons Learned on Compliance and Ethics and Best Practices Under the FCPA and Bribery Act, as well as his award-winning series “Fox on Compliance.”

Tom leads the social media discussion on compliance with his award-winning blog and is the Voice of Compliance, having founded the Compliance Podcast Network and hosting or producing multiple award-winning podcasts. He is an executive leader at the C-Suite Network, the world’s most trusted network of C-Suite leaders. He can be reached at tfox@tfoxlaw.com.

Host: Susan Divers

Susan_Divers_Principled_Podcast

Susan Divers is the director of thought leadership and best practices with LRN Corporation. She brings 30+ years of accomplishments and experience in the ethics and compliance arena to LRN clients and colleagues. This expertise includes building state-of-the-art compliance programs infused with values, designing user-friendly means of engaging and informing employees, fostering an embedded culture of compliance, and sharing substantial subject matter expertise in anti-corruption, export controls, sanctions, and other key areas of compliance.

Prior to joining LRN, Mrs. Divers served as AECOM’s Assistant General for Global Ethics & Compliance and Chief Ethics & Compliance Officer. Under her leadership, AECOM’s ethics and compliance program garnered six external awards in recognition of its effectiveness and Mrs. Divers’ thought leadership in the ethics field. In 2011, Mrs. Divers received the AECOM CEO Award of Excellence, recognizing her work advancing the company’s ethics and compliance program.

Before joining AECOM, she worked at SAIC and Lockheed Martin in the international compliance area. Before that, she partnered with the DC office of Sonnenschein, Nath & Rosenthal. She also spent four years in London and is qualified as a Solicitor to the High Court of England and Wales, practicing in the international arena with Theodore Goddard & Co. and Herbert Smith & Co law firms. She also served as an attorney in the Office of the Legal Advisor at the Department of State. She was a member of the U.S. delegation to the UN, working on the first anti-corruption multilateral treaty initiative.

Mrs. Divers is a member of the DC Bar and a graduate of Trinity College, Washington D.C., and of the National Law Center of George Washington University. In 2011, 2012, 2013, and 2014 Ethisphere Magazine listed her as one of the “Attorneys Who Matter” in the ethics & compliance area. She is a member of the Advisory Boards of the Rutgers University Center for Ethical Behavior and served as a member of the Board of Directors for the Institute for Practical Training from 2005-2008. She resides in Northern Virginia and is a frequent speaker, writer, and commentator on ethics and compliance topics.

Categories
Creativity and Compliance

Training Jams – Using Music to Communicate E&C

Where does creativity fit into compliance? In more places than you think. Problem-solving, accountability, communication, and connection – all take creativity. Join Tom Fox and Ronnie Feldman on Creativity and Compliance, part of the award-winning Compliance Podcast Network.

Ronnie’s company, Learnings and Entertainment, utilizes people’s entertainment devices to consume information in their everyday, non-work lives and apply it to important topics around compliance and ethics. It is not only about being funny. It is about changing the tone of your compliance communications and messaging to make your compliance program, policies, and resources more accessible.

In this episode, Tom and Ronnie discuss a great new series of offerings by L&E, entitled ‘E&C Training Jams.’ E&C Training Jams are an offering by L&E using music as a non-traditional way to communicate with your employees and to build an overall culture of compliance in your organization. In Training Jams, a soulful singer banters about ethics & compliance, explaining policies, sharing examples, and debunking excuses. Ronnie goes so far as to say about E&C Training Jams, “quite frankly, the coolest thing that I’ve ever made because the music gets stuck in your head, and they leave you with a smile.”

Resources:

Check out  Ronnie Feldman on LinkedIn

Check out Learnings & Entertainments on LinkedIn

Follow Ronnie Feldman on Twitter

Learnings & Entertainments 

 L&E Offerings-E&C Training Jams

E&C Jams Sizzle Reel

E&C Jams Promo Reel Landing page

E&C Jams Web Page

Categories
Daily Compliance News

December 9, 2022 – The Goldilocks Balls Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you four compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee and listen to the Daily Compliance News. All from the Compliance Podcast Network.

Stories we are following in today’s edition of Daily Compliance News:

  • KPMG was caught cheating again. (WSJ)
  • Sunny Bulwani was sentenced to 13 years. (NYT)
  • More corruption in baseball? (Twinkietown)
  • Wirecard trial begins. (Reuters)

Categories
Blog

ABB FCPA Resolution: Part 5 – A Win for Compliance

We conclude our exploration of the latest resolution of a Foreign Corruption Practices Act (FCPA) violation involving the Swiss construction giant, ABB Ltd. There have been several reference documents used this week and they include the Securities and Exchange Commission Complaint (SEC Order); the Department of Justice (DOJ) Press Release. Plea Agreement (ABB Plea Agreement) and Deferred Prosecution Agreement(DPA), the ABB South Africa Plea Agreement and Criminal Information, the ABB Management Services Plea Agreement and Criminal Information.

Over this blog post series, we have been exploring these key questions: How did ABB obtain such a superior resolution? And, as a three-time FCPA violator, how did the company avoid a monitor? Today, we celebrate how this most unusual FCPA enforcement action is a huge victory for compliance.

How did ABB obtain such a superior resolution?

There appears to be three components to ABB’s avoidance of a monitor. It all began with ABB’s attempt to self-disclose. Please note this attempt was not successful as the South African press broke the story of ABB’s bribery and corruption between the time ABB called to set up meeting and actually sat down with the DOJ. Yet the DOJ was impressed enough with ABB’s intent or at least desire to self-disclose that it spent a considerable amount of ink in the resolution documents detailing how ABB got close but missed timely self-disclosing.

Yet this putative failure at self-disclosure laid the groundwork for everything that followed, eventually leading to the stunning result. As the DOJ stated in the DPA, “in evaluating the appropriate disposition of this matter-including the appropriate form of the resolution-considered evidence that, within a very short time of leaning of the misconduct, the Company contacted the Fraud Section and scheduled a meeting to discuss matters under investigation by the Fraud Section and the Company. The Company did not specifically identify the South Africa misconduct in that meeting request, but it disclosed the South Africa misconduct during the scheduled meeting, subsequently presented evidence to the Offices that it intended to disclose the misconduct related to South Africa during the scheduled meeting and did not know of any imminent media reports when the meeting was scheduled.”

The second component is the above-noted discussion about ABB’s near self-disclosure. While it could have amounted to an own goal, given the lengthy DOJ discussion in the settlement documents, it appears the DOJ received ABB’s near miss more favorably. The second point is something every Chief Compliance Officer (CCO) and outside counsel need to understand; that being truly extraordinary.

Matt Kelly identified the one piece of information which took what is now this standard recitation of extraordinary cooperation to a truly high level of ‘extraordinary’. In a blog post, Kelly pointed out that in the SEC Order, it stated, “ABB’s cooperation included real-time sharing of facts learned during its own internal investigation.” This meant “ABB was sharing information with regulators as quickly as it found those facts, without necessarily knowing how such admissions might affect its overall case and settlement chances.” He then opined, “When you don’t know the full extent of your sins and the punishment to follow, but you cooperate with regulators anyway — that’s an impressive commitment to the culture of compliance that the Justice Department wants to see.”

Next were the actions by ABB in their remediation. The Plea Agreement reported that ABB “engaged in extensive remedial measures, including hiring experienced compliance personnel and, following a root-cause analysis of the conduct described in the Statement of Facts, investing significant additional resources in compliance testing and monitoring throughout the organization; implementing targeted training programs, as well as on-site supplementary case-study sessions; conducting continuing monitoring and testing to assess engagement with new training measures; restructuring of reporting by internal project teams to ensure compliance oversight; and promptly disciplining employees involved in the misconduct.” This final point was expanded on in the SEC Order which reported that all employees involved in the misconduct were terminated.

As a three-time FCPA violator, how did the company avoid a monitor?

ABB essentially created its own monitorship around testing its compliance program and reporting to the DOJ. In a section entitled “Written Work Plans, Reviews and Reports”, ABB agreed to conduct a first review and prepare a first report, followed by at least two follow-up reviews and reports. But more than simply reporting, ABB agreed to create and submit for review a workplan for this ongoing testing of its compliance program, as the program was detailed in the DPA. The DPA specified, “No later than one (I) year from the date this Agreement is executed, the Company shall submit to the Offices a written report setting forth:

  • a complete description of its remediation efforts to date;
  • a complete description of the testing conducted to evaluate the effectiveness of the compliance program and the results of that testing; and
  • its proposals to ensure that its compliance program is reasonably designed, implemented, and enforced so that the program is effective in deterring and detecting violations of the FCPA and other applicable anti-corruption laws.”

ABB also agreed to meet with the DOJ quarterly to submit and discuss the results of its ongoing testing. While I am sure many other companies have made a similar proposal to the DOJ, through its actions during the pendency of the investigation, ABB convinced the DOJ it could be trusted to follow through with its commitment.

How does all of this work into the DOJ decision not to require a monitor? There is now a 10-factor test that was laid out in the Monaco Memo. Factor 1 is whether the company self-disclosed the incident at issue. Factors 4-6 all relate to conduct and actions when the illegal activity occurred, not after discovery and self-disclosure. Factor 4 relates to the length or pervasiveness of the conduct and whether senior management was involved. Factor 5 reviews “the exploitation of an inadequate compliance program or system of internal controls.” Factor 6 asks if compliance personnel were involved or were basically negligent in failing to “appropriately escalate or respond to red flags.” Factors 7-10 considered ABB’s actions post-reporting, how the company became aware of the matter, its root cause analysis, its remedial actions and overall reduction in the company’s risk profile. While there was no substantive discussion of these factors in the any of the resolution documents, it appears the DOJ criteria for a monitor was not met.

The ABB FCPA resolution represents one of the biggest wins for corporate compliance that we have seen in recent memory. A now thrice-recidivist received a discount on its overall fine and penalty and avoided a monitor through truly exception work after the bribery and corruption was uncovered. Every compliance officer should thoroughly study this matter to see the specific steps ABB engaged in, starting with their first phone call to the DOJ. During your investigation, embrace the DOJ’s need for speed in communicating new and salient facts as they are uncovered, perform a root cause analysis and then remediate, remediate, and remediate. ABB is to be commended and indeed celebrated for its success in this matter.