Day: August 26, 2024

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Compliance Tip of the Day

Compliance Tip of the Day: Multiplying The Influence of Compliance

Welcome to “Compliance Tip of the Day,” the podcast where we bring you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements.

Whether you’re a seasoned compliance professional or just starting your journey, our aim is to provide you with bite-sized, actionable tips to help you stay on top of your compliance game.

Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law.

Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.

Today we discuss how to maximize the influence of your compliance program throughout your organization.

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

To check out The Compliance Handbook, 5th edition, click here.

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The Ethics Experts

Episode 180: Tarek Kamil

In this episode of The Ethics Experts, Nick welcomes Tarek Kamil.

Tarek is the CEO and founder of Cerkl, an AI-powered platform that elevates internal communications. As a passionate tech enthusiast and entrepreneur, Tarek strives to create innovative solutions that positively impact the digital world. With a passion for blending technology and creativity, he aims to inspire and make a difference through his ventures.

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Riskology

Riskology by Infortal: Episode 31 – Nigeria: Turning The Tide Against Corruption with Soji Apampa, Christopher Mason and Dr. Ian Oxnevad

In Episode 31 of Riskology by Infortal, join Soji Apampa, Christopher Mason, and Dr. Ian Oxnevad as they discuss Nigeria’s fight against corruption in the post-Covid era.

Soji, Chris, and Ian discuss the grassroots and civil society efforts in Nigeria and West Africa to combat corruption and increase business transparency.

The Fight Against Corruption and the Role of Civil Society

Soji Apampa, a leader in the anti-corruption space, shares his experiences in promoting ethical business practices in Nigeria and the evolution of corporate compliance in the region. Contrary to top-down regulatory regimes in the US and Europe, anti-corruption efforts in Nigeria underscore the need for effective collective action from the private sector and civil society.

Successful models for this include the Maritime Anti-Corruption Network, and the advancements in technology that are driving transparency and reducing opportunities for corrupt practices in West Africa. Nigeria’s maritime sector presents a pertinent example of how collective action can bring about significant improvements in integrity and operational efficiency. Prior to these concerted efforts, discretionary powers and lack of standard operating procedures often led to unpredictability and opportunities for corrupt practices.

Culture Matters: From a Perception of Anti-Government to Anti-Corruption

Soji’s journey in integrity and anti-corruption began when he returned to Nigeria as a civil and structural engineer. Frustrated by the rampant corruption and trade malpractices, he took it upon himself to help instill a culture of transparency and anti-corruption.  Over time, these efforts shifted the culture where “anti-corruption” was deemed to be “anti-government” to a culture of increased transparency and professionalism.  Despite initial setbacks, the support from like-minded individuals and organizations paved the way for significant progress. Recent years have seen significant improvements due to collective action in the maritime sector. From 266 corruption cases in 2019 to just 45 in 2022, the benefits are clear. Efforts to introduce transparency and reduce unreceipted cash payment demands have dramatically lowered shipping costs, making the sector more reliable.

Culture Matters: Regulations in the West Don’t Work the Same Way Elsewhere

Initially, practices such as bribery were not only common but also tax-deductible in countries like France and Germany.  Countries like the US, UK, and France have even historically topped indices for bribery, despite stringent anti-corruption laws.  A critical factor in the success of compliance programs is the cultural context within which they operate. Corporate culture often reflects broader societal norms, impacting how compliance policies are perceived and implemented.

Despite the proliferation of laws to combat corruption, money laundering, and terrorist financing from the West to the rest of the world, many of these laws are ill-suited to local needs. Often, laws from developed economies perpetuate corrupt practices. Bottom-up Initiatives like the Maritime Anti-Corruption Network demonstrate the power of collective action in combating corruption.

By working together, businesses can create a culture of integrity.  The reforms in the maritime sector included the development of clear standard operating procedures (SOPs) and timelines for specific activities, enhancing predictability in both costs and time.  Captains can adhere to these standards and checklist requirements, subsequently reducing the chances for extortion. Unlike in the past, transitioning a vessel from Anchorage to the berth now takes a standardized 90 minutes instead of varied durations extending to several hours.

When Going Abroad, You Need a Guide

Understanding local dynamics is crucial, as even the best compliance plans can falter if they don’t align with ground realities. Unlike the abstract nature of high finance, industries such as shipping depend heavily on functional relationships between shippers, locals, and governance. This sector demonstrates that proper collaboration ensures essential goods move smoothly, maintaining daily life.  As bottom-up initiatives help combat corruption, greater diversity in the business environment will become more localized.  At the same time, avoiding violating laws like the Foreign Corrupt Practices Act (FCPA) initiatives and local laws requires having a “local guide” help you navigate new business environments. Intelligence and local connections matter.

Nigeria’s Success Is Now a Model For the “Global South”

The Nigerian model of tackling maritime corruption has inspired similar reforms in other key global ports and regions. Nations such as Egypt, India, Pakistan, Bangladesh, and Ghana have begun adopting similar frameworks, showing promise for broader anti-corruption efforts. Countries like Nigeria, which show real structural changes, may not immediately reflect these in perception surveys, yet they offer untapped potential for investors aware of these developments.  This forward-looking approach, integrating both retrospective analysis and future opportunities, aims to not only continue the fight against corruption but to set an example that ripples out to other industries and regions trying to roll back corruption.

Resources:

Infortal Worldwide

Email

Chris Mason on LinkedIn

Dr. Ian Oxnevad on LinkedIn

Soji Apampa on LinkedIn

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Adventures in Compliance

The Last Bow Stories – Investigative Lessons from The Disappearance of Lady Frances Carfax

Welcome to a review of all the Sherlock Holmes stories that are collected in the work, “The Last Bow.“. It is a collection of eight detective stories written by Sir Arthur Conan Doyle, from 1908 to 1917. The collection spans some of the most intriguing cases and mysteries that Holmes and his loyal friend Dr. John Watson tackle.

Today we take up The Disappearance of Lady Frances Carfax, which appeared in Strand Magazine in December 1911, as we consider investigative lessons for compliance professionals from The Disappearance of Lady Frances Carfax.

This episode considers the investigative methods employed by Holmes and Watson, which offers valuable lessons on investigations for compliance professionals. Key points include thorough information gathering, maintaining confidentiality, attention to detail, critical thinking, collaboration, understanding human behavior, following financial clues, meticulous documentation, and learning from each case. The episode underscores how these investigative principles can be directly applied to the field of compliance.

Key Highlights:

  • Introduction to Lady Frances Carfax
  • The Disappearance and Investigation
  • Holmes’ Discoveries and the Climax
  • Key Investigative Lessons for Compliance
  • Compliance Principles

 Resources:

The New Annotated Sherlock Holmes

Sherlock Holmes FAQ

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For more information on Ethico and a free White Paper on top compliance issues in 2024, click here.

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Daily Compliance News

Daily Compliance News: August 26, 2024 – The Detained in France 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.

In today’s edition of Daily Compliance News:

  • The Telegram CEO was detained in France. (Bloomberg)
  • EY is shedding more audit clients. (WSJ)
  • Italy opens a criminal investigation into the yacht’s sinking. (FT)
  • More Boeing whistleblowers claim fraud by the company. (BBC)

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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Blog

Bank of America’s Corporate Culture Crisis: Part 1 – A Case Study in Failure

Compliance professionals constantly seek to understand how systemic issues within corporate hierarchies can lead to severe consequences. The recent revelations about Bank of America’s (BoA) persistent workplace culture problems are a powerful reminder of compliance’s critical role in safeguarding employees and the organization.

This week, I will explore the BoA failure around workplace culture from various perspectives articulated by the Everything Compliance gang, including Karen Woody, Jonathan Armstrong, Matt Kelly, Karen Moore, and Jonathan Marks. This exploration will include the failure of internal controls, failures by the Board and senior management, culture failures around highly driven, self-selecting employees, and the cultural miasma that is BoA from a perspective from across the pond. The full Everything Compliance episode will be posted on Thursday, August 29.

In Part 1, we set the stage and then delve into the factors contributing to BoA’s toxic culture, the implications for compliance officers, and the lessons we can draw to prevent similar issues in your organizations.

Bank of America has faced intense scrutiny following a series of harrowing articles, in a story broken by the Wall Street Journal (WSJ), outlining a toxic workplace culture within its investment banking division. This culture of overwork has had tragic consequences, including the death of junior banker Leo Lukenas, who had been working over 100 hours a week leading up to his untimely death. Disturbingly, this is not an isolated incident. A similar event occurred in 2013 when an intern, Moritz Erhardt, who worked in BoA’s London office, also died after working excessive hours. Despite promises for reform, these practices have persisted, indicating deep-seated issues within the company’s corporate culture.

One of the key issues is the disconnect between senior management’s intentions and the actions of middle management. While senior executives at BoA have voiced their concern for the well-being of their junior bankers and have set policies to limit overwork, middle managers have often circumvented these rules. Instead of enforcing the 80-hour workweek cap, they instructed employees to underreport their hours, ignoring internal controls and perpetuating a sweatshop-like environment.

This phenomenon is not simply a BoA problem; it’s a stark example of how middle managers can sabotage well-intentioned corporate policies. It underscores the importance of effective communication and alignment between all levels of management.

A glaring issue in this case is the failure of internal controls. In today’s technologically advanced age, middle management should have responded more to BoA’s manual control system for logging hours. Automated systems for tracking work hours could have prevented such blatant disregard for policies. Moreover, there was a lack of adequate internal audits and HR oversight. This highlights the necessity of robust, automated internal controls and regular audits for compliance professionals to ensure adherence to corporate policies.

Another critical aspect discussed is the culture of retaliation against employees who try to report overwork or seek help. In some instances, employees have been punished for following the rules, such as by having to work on holidays or receiving criticism from their managers. This toxic environment discourages whistleblowers and perpetuates the cycle of abuse.

For compliance officers, tackling this issue involves fostering a culture where employees feel safe to speak up without fear of retaliation. Senior management must impose real consequences for middle managers who violate policies and ensure consistent disciplinary actions to reinforce the importance of compliance.

The long-term implications of such a dysfunctional culture are profound. Junior employees trained in an environment where rules are routinely ignored may carry these attitudes into future roles, potentially spreading unethical practices across the industry. For compliance professionals, it’s essential to address immediate issues and cultivate an ethical corporate culture that will yield trustworthy leaders in the future.

The situation at Bank of America serves as a sobering case study of the importance of comprehensive compliance programs and the need for alignment across all management levels. By understanding and addressing the root causes of such corporate culture failures, we can better safeguard our organizations and foster environments prioritizing ethical behavior and employee well-being. As compliance professionals, we must ensure that the lessons learned from BoA’s crisis are not ignored and that we remain vigilant in building and maintaining robust compliance frameworks.

Let’s hope that in another decade, we are not revisiting this same issue at BoA or elsewhere. Instead, all compliance professionals should strive for systemic improvements that prevent such tragedies and promote a healthier, more ethical corporate culture.