Day: February 13, 2023

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31 Days to More Effective Compliance Programs

One Month to More Effective Internal Controls – Internal Controls for Third Parties

Bribery built into the fabric of Chinese healthcare system”, reporters Jamil Anderlini and Tom Mitchell wrote about the ‘nuts and bolts of how bribery occurs in the healthcare industry in China. The authors quoted Shaun Rein, a Shanghai-based consultant and author of “The End of Cheap China,” for the following “This is a systemic problem, and foreign pharmaceutical companies are in a conundrum. If they want to grow in China, they must give bribes. It’s not a choice because officials in the health ministry, hospital administrators, and doctors demand it.”

It would be reasonable to expect that internal controls over gifts would be designed to ensure that all gifts satisfy the required criteria, as defined and interpreted in Company policies. It should fall to a Compliance Officer to finalize and approve a definition of permissible and non-permissible gifts, travel, and entertainment, and internal controls will follow from such definition or criteria set by the company. These criteria would include the amount of the spend, localized down into increased risk, such as the higher risk recognized in China. Within this context, there are four general internal controls to consider. 

Three Key Takeaways:

  1. GSK in China continues to be an example of the lack of internal controls for an effective compliance program.
  2. General areas of review for internal compliance controls.
  3. Third parties are still at the highest risk of corruption-related issues.

For more information on how to build out a best practices compliance program, including internal controls, check out The Compliance Handbook, 3rd edition.

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The Ethics Experts

Episode 143 – David Tate & Marianne Pantalon

 

In this episode of The Ethics Experts, Nick welcomes David Tate & Marianne Pantalon. David is a licensed clinical psychologist, executive coach, and organizational consultant. He is a Co-Founder and CEO at Conscious Growth Partners , a consultancy that promotes organizational thriving through better leadership, teamwork, and culture. Marianne is a clinical and consulting psychologist and executive coach. She is Co-founder and Chief Strategy Officer at Conscious Growth Partners, a mission focused consulting firm dedicated to helping organizations improve both their results and relationships through improved awareness, intentionality, and skill development.
https://www.linkedin.com/in/david-c-tate-780683/
https://www.linkedin.com/in/mariannepantalon

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The ESG Report

ESG Stewardship with Ben Colton

In this episode of the ESG Report, Tom Fox discusses ESG sustainability and stewardship. Guest Ben Colton explains how his company State Street Global is contributing to a better understanding and implementation of sustainability and stewardship practices for ESG.

Ben Colton is the Global Head of Asset Stewardship at State Street Global. The company is a steward of their clients’ investments, and as such, he oversees proxy, voting, and engagement activities.

 

  • Sustainability provides opportunity. The low carbon economy will allow companies to refine their business models as they transition. They can then see sustainability as a differentiator, and see a shift in consumer behavior. Ben stresses however, that the discussion about brown vs green energy should not become polarized. How companies change in response to a low carbon economy will not be linear. 
  • Not having diversity is a business risk, especially at the board level. This speaks to flaws within your nomination processes. Ben stresses that it is important to ensure that members are widening their nomination pool, and allowing for a diverse set of candidates. 
  • It’s time to start setting baseline expectations for carbon emissions and holding companies accountable for meeting them, Ben stresses. Companies need to be part of the solution. “Large oil and gas companies can be part of the solution. We can’t polarize this discussion in brown versus green and just expect high emitting companies to just spin off all their assets to the private equity sector because that’s what we’re seeing and that’s what we’re really concerned about,” he says. 
  • Diversity is a part of human capital management, and related to corporate culture. Diverse work environments encourage innovation, create a welcoming work environment, and encourage employee engagement.
  • Human capital management will be more important in the coming years and companies are going to be thinking about how they’re integrating their employees’ voices and feedback. 

 

KEY QUOTE

“Having progressive diversity and inclusion practices will promote employee satisfaction.” – Ben Colton 

 

Resources

Ben Colton on LinkedIn

State Street Global Advisors

Categories
Corruption, Crime and Compliance

2023 Ethics and Compliance Predictions and Trends

 

In this episode of the Crime, Corruption, and Compliance podcast, Michael Volkov forecasts the compliance and ethics trends that will be significant in 2023. He emphasizes the crucial role ethics and compliance play in the corporate governance landscape, the increasing relevance of ESG, and highlights the need for robust ethics and compliance programs even in the C suite. 

Key ideas in this episode:

  • The need for robust ethics and compliance programs with adequate resources.
  • Boards and CEOs who fail to understand the importance of these programs are “doomed”.
  • Culture and ethics will be top priority in 2023.
  • The importance of C suite risk assessments and third-party risk management. “CCOs need to reach out to internal audit and their CFOs to enlist their support for a simple proposition, and that is that we need to design and implement financial controls applicable to the C Suite that are tailored to the relevant risks,” Michael says.
  • The evolution of third-party risk management to become a more holistic concept. “The ability to address, monitor and collect data on your third parties also with the evolving risk landscape led to this transformation,” Michael points out. “The fast pace of this transformation is going to continue.” 
  • CCOs and compliance officers need to ask questions surrounding internal controls and accounting controls.
  • Compliance professionals will participate more deeply in financial control review and responsibility. 

 

KEY QUOTES:

“CCOs need to reach out to internal audit and their CFOs to enlist their support for a simple proposition, and that is that we need to design and implement financial controls applicable to the C Suite that are tailored to the relevant risks.” – Michael Volkov

 

Resources:

Michael Volkov on LinkedIn | Twitter

The Volkov Law Group

Categories
All Things Investigations

All Things Investigations: Episode 21 – HHR Alum: John Wood – A January 6 Committee Lawyer

 

Welcome to the Hughes Hubbard Anticorruption and Internal investigation Practice Group’s podcast, where host Tom Fox and members of the Hughes Hubbard Anticorruption and Internal Investigation Practices Group delve into the legal issues surrounding white-collar and other investigations, both domestically and internationally.  John Wood, Investigative Counsel on the January 6 Committee, joins Tom and Mike DeBernadis on this week’s show. They delve into the inner workings of the January 6 Committee.

John Wood is a former Hughes Hubbard partner; he serves as Investigative Counsel on the January 6 Committee. He is well known for his work with the Bush administration, where he worked at the Justice Department, White House and Department of Homeland Security.

 

Key ideas you’ll hear in this episode:

  • The January 6th attack on the Capitol investigation was conducted by five teams, with a bipartisan committee and one staff. Documents were crucial to the investigation and legal strategies were used to obtain them. The National Archives produced a significant number of documents, while electronic documents were quickly obtained from witnesses through subpoenas, text messages and email accounts.
  • Some witnesses were less compliant or refused to cooperate and the House held some in criminal contempt. The Fifth Amendment was respected, but the investigation was frustrated by some who claimed it as a defense. 
  • The public hearing was divided into topical sections and used video and live and deposition testimony to create a compelling story for the American people. 
  • John questioned Judge Ludic, a former clerk and conservative expert witness. The hearing was more structured and scripted, but with surprises and led by members of Congress and senior investigative counsel.
  • The report was intentionally detailed with specific citations to documents and transcripts for backup, time-consuming to write, but important to have as buttoned up as possible to prevent denial by the former President or his allies. 
  • The hope for the legacy of the committee is to prevent something like January 6 from happening again, and to put partisanship and politics aside to work for the country. 
  • John recommends a book, “Scavenger Hunt” by Chad Boudreaux, as a fun and informative read.

KEY QUOTES:

“In terms of the [January 6 Committee] investigation, while obviously there were differences of opinion on how to proceed with certain things with strategy or tactics to use, it was never based on political or party affiliation.” – John Wood 

 

Resources

Hughes Hubbard & Reed website

John Wood on LinkedIn

Scavenger Hunt – Chad Boudreaux

Categories
FCPA Compliance Report

Eric Young on the Evolution of the CCO

Welcome to the award-winning FCPA Compliance Report, the longest-running podcast in compliance. In this special episode, I am joined by Eric Young from Guidepost Solutions. Young has worked at prestigious institutions like JPMorgan, General Electric, S&P Global Ratings, and BNP Paribas. He shares his expertise to empower employees looking to move ahead with processes, find solutions, and navigate compliance issues.

Tom and Eric talk about the highlights of the Monaco Memo, updates on the Corporate Enforcement Policy, a case study from ABB to showcase the role of the CCO, and how firms should interpret Department of Justice speeches. He further dives into the corporate culture, accountability, and role of the CCO within an organization. Finally, Eric sheds light on a case from McDonald’s involving the former CEO and their decision to claw back compensation. The discussion concluded with acknowledging the Delaware court’s holding that elevates the CCO’s corporate duties.

Key Topics:

[00:04:24] Process Improvement to Avoid Violations and Effect Positive Change in Company Culture

[00:09:19] The Effects of the Monaco Memorandum on Corporate Compliance Practice

[00:14:35] ABB’s Impressive Performance During an Investigation and Remediation Period

[00:18:42] The C-suite’s Responsibility in Organizations

[00:23:21] The Impact of Experiences on Assessing Business Decisions

[00:28:05] The SEC Inquiry on McDonald’s precipitated by Steve Easterbrook’s Removal

[00:32:24] The Significance of Delaware Courts in Regards to Corporate Law

[00:37:13] The Functions of Corporate Boards During Times of Crisis.

Tune in and listen to Eric as he educates us about the need to report extraordinary circumstances to the Department of Justice

 Resources:

Connect with Tom Fox

●      LinkedIn

Connect with Eric Young

●      Guidepost Solutions

●      LinkedIn

Categories
Daily Compliance News

February 13, 2023 – The Corruption Kills Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you 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. Each day we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

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

  • Deutsche Bank finds it acted in bad faith. (FT)
  • Judge denies right to reopen Boeing DPA. (WSJ)
  • Meta and Gibson, Dunn harshly criticized for litigation tactics. (Reuters)
  • Corruption abetted Turkey’s earthquake. (Foreign Policy)