Day: April 5, 2023

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program for 3rd Parties-Business Justification

The 2023 Evaluation of Corporate Compliance Programs stated, “Prosecutors should also assess whether the company knows the business rationale for needing the third party in the transaction, and the risks posed by third-party partners, including the third-party partners’ reputations and relationships, if any, with foreign officials.” This standard articulates one of the most basic tools to operationalize your compliance program and should form the basis of your third-party risk management process. Indeed, this is viewed as an internal control with the 2023 ECCP going on to pose the following question, “How does the company ensure there is an appropriate business rationale for the use of third parties?”

What should go into your business justification? At the most basic level, you should craft a document, which works for both you as the compliance practitioner and the business folks in your company, that details some basic concepts which includes the following: 1) The name and contact information for both the Relationship Manager and the proposed third party; 2) How the Relationship Manager came to know about the third party because it is a red flag if a customer or government representative points you towards a specific third party; 3) What services the third party will perform for your company, the length of time and compensation rate for the third party; and 4) An explanation of why this specific third party should be used as opposed to an existing or other third party, if such were considered. All this information should be documented and then signed by the Relationship Manager.

Remember, the purpose of the business rationale is to document the satisfactoriness of the business case to retain a third party. The business rationale should be included in the compliance review file assembled on every third party at the time of initial certification and again if the third-party relationship is renewed. This means “Document, Document, and Document.”

 Three key takeaways:

1. You should always have a business reason for using a third party which is articulated by the business folks, not compliance.

2. A Relationship Manager is the key going forward in operationalizing your compliance program through the life of the third-party relationship with your company.

3. Always remember to “Document, Document, and Document”.

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FCPA Compliance Report

Maria D’Avanzo on the 2023 ECCP

Welcome to the award-winning FCPA Compliance Report, the longest running podcast in compliance. In this special edition, sponsored by Traliant, I visit with Maria D’Avanzo Chief Evangelist Officer at Traliant to discuss the 2023 Evaluation of Corporate Compliance Programs. We discuss the DOJ’s guidance on financial incentive programs and highlight the importance of cross-functional collaboration in establishing effective compliance programs. What are some of the challenges of implementing clawbacks for employees who engage in misconduct? We consider some of the risks involved when a company decides to file a lawsuit against an executive for clawback. Finally, they touch on the need for proper communication of the compliance message beyond legal and compliance departments. Join Tom Fox and Maria D’Avanzo as they dive deep into the future of corporate compliance programs. Don’t miss this informative and eye-opening episode.

 Key Highlights

·      Evaluating Corporate Compliance Incentive Programs

·      Establishing Compliance Programs in Companies Facing DOJ Allegations

·      Incorporating Compliance Ethics and Clawbacks in Business

·      Lawsuit Consequences for Companies & Executives

·      DOJ Elevating Corporate Compliance Programs

·      Effective Communication for CCOs

 Notable Quotes

“Certainly the timing of any type of any attempt to claw back the compensation, the board needs to be concerned about what’s the right time? What’s the right process? And are we going to open ourselves up?”

“There’s also language about non-financial incentives. And here, once again, nothing really new that companies are supposed to take doing business ethically.”

“I’m not quite sure why a company without resolving the loss, the investigation, either internally or especially with the DOJ, would file a lawsuit against an executive in order to claw back the compensation.”

“Is your investigation completed? Or is it ongoing. I’m not sure how you would win in a litigation if you have not established the basis for the breach of contract.

Resources

Maria D’Avanzo on LinkedIn

Traliant

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

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The Hill Country Podcast

Darrell Beauchamp, Michael Martin Murphy & Wildfire

Welcome to the award-winning The Hill Country Podcast. The Texas Hill Country is one of the most beautiful places on earth. In this podcast, Hill Country resident Tom Fox visits with the people and organizations that make these the unique areas of Texas. Join Tom as he explores the people, places, and activities of the Texas Hill Country.  In this episode, host Tom Fox visits Darrell Beauchamp, Executive Director of the Western Museum of Art, discussing his relationship with musician Michael Martin Murphy, including hosting him at a benefit concert.

The podcast also delves into Beauchamp’s personal relationship with Murphy, including a gifted Yamaha guitar signed with the lyrics to “Wildfire.” The museum’s unique exhibit approach is also detailed, showcasing personal favorite works from the collection. The upcoming exhibit, “40 Years of Western Arts,” will display works from influential artists and lesser-known artists alike, including a rare painting by Clark Healings on loan from a collector in Tulsa. With vibrant storytelling and a new podcast, the Museum of Western Art is sure to captivate art enthusiasts and visitors alike.

 Key Highlights

·      Tom Fox and Darrell Beauchamp’s joint love for Michael Martin Murphy

·      Hosting Michael Martin Murphy for a Benefit Concert

·      Receiving a Special Guitar from Michael Martin Murphy

·      Michael Murphy’s Influence on Storytelling Music

·      The Significance of Cowboy Songwriters in the West

·      Rediscovering overlooked art through guest favorites

·      Unearthing Employee Favorites

·      Upcoming Western Art Exhibition

 Notable Quotes 

1.     “The American West is all about telling stories, and that’s what Michael does and Willie and George Strait and all those guys through their lyrics.”

2.     “I know we let the people choose. I know we let our docents, our volunteers, our guests, you know, come in, and we tell them, what’s your favorite work in our collection.”

3.     “For the first time, I was really awestruck. And it seemed to me to be the most personal exhibit, and it turned out it was.”

4.     “We’re putting together a show called 40 Years of Western Arts.”

 Resources

Western Museum of Art

Wildfire by Michael Murphy on YouTube

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Great Women in Compliance

Mary and Lisa in a Discussion in The Big News Edition

Welcome to the Great Women in Compliance Podcast, hosted by Mary Shirley and Lisa Fine. As Lisa and Mary return from seasonal break, they have some big news about the next chapter of the podcast.  Join this episode to hear about Mary’s planned departure from Great Women in Compliance at the 200th episode milestone and the exciting plans that Lisa has in mind to change things up and keep them fresh for #GWIC listeners when returning from an extended Summer break later in the year.  We look forward to celebrating the 200th episode with all of our listeners on 5 July 2023!

 Lisa and Mary also take the opportunity this episode to talk about some topical issues in Compliance, including Artificial Intelligence,  in relation to recent conferences and share information in relation to The Society of Corporate Compliance and Ethics ECEI, Consero’s Chief Ethics and Compliance Officer Forum and the upcoming Compliance Week Women in Compliance Summit which will be held in Atlanta in June.  Check out the details and get yourself registered here to see Team GWIC speak on networking and other tips to advance your career.

 The Great Women in Compliance Podcast is on the Compliance Podcast Network with a selection of other Compliance related offerings to listen in to.  If you are enjoying this episode, please rate it on your preferred podcast player to help other likeminded Ethics and Compliance professionals find it.  If you have a moment to leave a review at the same time, Mary and Lisa would be so grateful.  You can also find the GWIC podcast on Corporate Compliance Insights where Lisa and Mary have a landing page with additional information about them and the story of the podcast.  Corporate Compliance Insights is a much appreciated sponsor and supporter of GWIC, including affiliate organization CCI Press publishing the related book; “Sending the Elevator Back Down, What We’ve Learned from Great Women in Compliance” (CCI Press, 2020). If you enjoyed the book, the GWIC team would be very grateful if you would consider rating it on Goodreads and Amazon and leaving a short review.  Don’t forget to send the elevator back down by passing on your copy to someone who you think might enjoy reading it when you’re done, or if you can’t bear parting with your copy, consider it as a holiday or appreciation gift for someone in Compliance who deserves a treat.

If you enjoyed the book, the GWIC team would be very grateful if you would consider rating it on Goodreads and Amazon and leaving a short review.  Don’t forget to send the elevator back down by passing on your copy to someone who you think might enjoy reading it when you’re done, or if you can’t bear parting with your copy, consider it as a holiday or appreciation gift for someone in Compliance who deserves a treat.

You can subscribe to the Great Women in Compliance podcast on any podcast player by searching for it and we welcome new subscribers to our podcast.

Join the Great Women in Compliance community on LinkedIn here.

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Compliance Into the Weeds

COSO Framework for Sustainability Controls and Reporting

The award winning, Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, join Tom and Matt as they discuss a new sustainability framework that companies can use to improve their sustainability efforts. The document emphasizes the importance of data governance and using a recognized control framework for effective financial reporting, similar to COSO. The hosts explore the challenges of collecting and managing sustainability data, while highlighting the need for organizations to have a Chief Data Governance Officer and an in-house data committee. They discuss the importance of competent leadership, effective communication, and the role of vendors offering sustainability supporting solutions. Tune in to discover how the right oversight mechanisms can save organizations money by streamlining IT vendors and why sustainability data reporting is the new challenge of achieving Sarbanes Oxley compliance in the 2000s.

 Key Highlights

·      COSO Internal Control Framework for Sustainability Disclosures

·      Comparing Sustainability and Ethics/Compliance Frameworks

·      Challenges in Sustainability Data Collection

·      Importance of Data Governance in Large Enterprises

 Notable Quotes

1.     “ESG and sustainable business information, on the other hand, tends to be longer term and more qualitative.”

2.     Revenue numbers are in dollar returns and carbon emissions are not.

3.    Radically different sorts of disclosures and data there, but you have to think through.

4.    You’re going to have to make sure that the data governance mechanisms you have? Do you have a Chief Data Governance Officer? Some organizations do. Do you have an in house data committee to think about are we collecting all of this data?

 Resources

Matt  on LinkedIn

Matt on Radical Compliance

Tom

Instagram

Facebook

YouTube

Twitter

LinkedIn

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Daily Compliance News

April 5, 2023 – The Not There Finest Hour 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:

· Jamie Dimon says banking regs need to be tightened.  (WSJ)

· Steinmetz’s guilty verdict was upheld on appeal.  (Reuters)

· Founder of Frank charged with fraud. (NYT)

· VW fights draconian sanctions. (Reuters)