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Innovation in Compliance

Innovation in Compliance: Greg Shultz on Key Traits for Compliance Professionals: Connecting and Listening

Innovation comes in many areas and compliance professionals need to not only be ready for it but embrace it. Join Tom Fox, the Voice of Compliance, as he visits with top innovative minds, thinkers, and creators in the award-winning Innovation in Compliance podcast.

In this episode, Tom welcomes Greg Shultz, the founder of Conformitise, to take a deep dive into his journey in operationalizing compliance in some of the world’s largest companies. Shultz also advises into the essential skills required for a thriving career in compliance.

Emphasizing the importance of active listening, Shultz shares the significance of listening again before advising to foster a collaborative partnership with business teams. Forming personal connections is highlighted, particularly through face-to-face interactions with investment teams, which helps in understanding different personas and building strong relationships over time. Our discussion also touches on the evolving role of data analytics in the compliance field, stressing its criticality in managing global data and mitigating risk in today’s super funds landscape. This episode is a must-listen for anyone aiming to step into or advance within the compliance profession.

Key Highlights:

  • Introduction to Compliance Professional Skills
  • The Importance of Listening and Advising
  • Building Strong Relationships
  • The Role of Data Analytics in Compliance

Resources:

Greg Shultz on LinkedIn

Tom Fox

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Daily Compliance News

Daily Compliance News: September 17, 2024 – The $100+$106MM 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 in 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.

  • First Energy pays $100MM to settle SEC charges. (WSJ)
  • Walgreens to pay $106.8MM for allegations of overbilling.  (WSJ)
  • TikTok faces tough questions from the Court of Appeals. (Reuters)
  • 2 Ex-NYFD chiefs charged with bribery. (Bloomberg)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the full 3-book series, The Compliance Kids on Amazon.com.

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Compliance Tip of the Day

Compliance Tip of the Day: How a CEO Can Set The ‘Tone at The Top’- Part 2

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 continue our look at how a CEO can lead with tone at the top for any compliance program.

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Blog

Tone at The Top Week: Part 2 – Ten Things A CEO Can Do

In corporate compliance, a guiding principle is the foundation for success or failure: Tone at the Top. This phrase encapsulates the role of senior executives—particularly the CEO—in setting the ethical standards, cultural expectations, and overall mindset toward compliance within an organization. Without a strong, consistent tone from leadership, even the most well-designed compliance programs will falter. However, the entire organization benefits when senior executives actively lead with integrity and prioritize compliance. In this post, we’ll explore the critical role of leadership in fostering a culture of compliance and list practical ways CEOs and other senior executives can demonstrate the appropriate tone at the top.

But Tone at the Top is more than just words. It is about action. What are 10 things a CEO or Senior Executive can do to demonstrate the right Tone at the Top?

1. Lead by Example

Senior executives must model ethical behavior in every aspect of their role. Employees watch how leaders act, especially in challenging situations. When executives consistently demonstrate integrity in decision-making, it reinforces the importance of organizational compliance. To quote the great Jimmy Johnson, “If you are going to talk the talk, you have to walk the walk.”

2. Communicate Clearly and Consistently

Regular, transparent communication about compliance and ethics is key. CEOs and senior executives should emphasize the importance of compliance in emails, internal memos, town halls, and meetings. Compliance messages should be woven into the fabric of all business communications, not just when issues arise.

3. Embed Compliance in Business Strategy

Compliance should not be an afterthought. Senior executives can demonstrate their commitment by ensuring compliance is part of the strategic business planning process. This means considering regulatory risks, ethical implications, and compliance requirements when setting business goals. Compliance must sit at the table and participate in the long-term planning and implementation of your organization’s business strategy. This includes mergers and acquisitions, assessing and planning for emerging risks, and disaster planning.

4. Empower the Chief Compliance Officer

The CEO should ensure that the CCO has direct access to senior leadership and the board of directors. The FCPA Resource Guide, 2nd edition, states, “DOJ and SEC also consider whether a company has assigned responsibility for the oversight and implementation of a company’s compliance program to one or more specific senior executives within an organization. Those individuals must have appropriate authority within the organization, adequate autonomy from management, and sufficient resources to ensure that the company’s compliance program is implemented effectively.” This shows employees that the compliance function has the full backing of the leadership team. The CCO must also have the authority to manage the compliance program effectively.

5. Allocate Adequate Resources to Compliance

An underfunded compliance program signals to employees that compliance is not a priority. CEOs should ensure a sufficient budget, personnel, and technological resources are allocated to the compliance function. This includes funding for training, audits, monitoring, and reporting tools. This  requirement also follows Hallmark 4 of the Ten Hallmarks of an Effective Compliance Program that CCOs must have adequate resources, stating “the amount of resources devoted to compliance will depend on the company’s size, complexity, industry, geographical reach, and risks associated with the business.”  However, ensure it is not simply budgetary resources but also qualified compliance personnel for your corporate compliance function.

6. Incorporate Compliance into Performance Metrics

Holding employees accountable for compliance should be integrated into the company’s performance metrics and reward systems. Senior executives should ensure compliance-related goals are part of annual performance evaluations and that ethical behavior is rewarded, not just financial performance. Doing business ethically and in compliance should also be incorporated into promotion evaluations. You cannot promote employees who ‘hit their numbers’ but those who work ethically, actively promote the values of the organization, and work to improve the organization’s overall compliance.

7. Deliver Compliance Training Personally

When senior executives participate in compliance training, it sends a powerful message. CEOs and other leaders can demonstrate their commitment by personally delivering training sessions or appearing in training videos. This can be the most powerful statement in many ways, as it reinforces the importance of compliance from the top down.

8. Take Swift and Decisive Action on Compliance Issues.

When compliance violations occur, how leadership responds speaks volumes. CEOs should act swiftly and decisively to investigate and address any issues. Employees need to see that no one is above the law and that compliance breaches will not be tolerated—regardless of an individual’s position in the company. This means justice across your organization and fairness in how consequences are meted out. If you fire employees in Brazil for cheating on their expense accounts, you must fire your top producer in the US for cheating on their expenses.

9. Encourage Open Dialogue and Reporting

Senior executives should actively encourage employees to report compliance concerns without fear of retaliation. The CEO can demonstrate this by promoting the company’s whistleblower program and fostering an environment of openness and transparency. Executives should also be approachable, signaling that compliance concerns will be taken seriously.

10. Align Compensation with Compliance

Executive compensation should reflect the company’s commitment to compliance and ethical behavior. CEOs can lead by example by linking their compensation to compliance performance metrics. This aligns with business success and the company’s commitment to doing things correctly. The same is true for consequences in the form of contractually agreeing to clawbacks and holdbacks of compensation, equity, or options for violations of a corporate compliance program.

Tone at the top is not a one-time initiative. It is an ongoing process that requires continuous attention and reinforcement from senior leaders. When a CEO and other executives lead by example, it sends a clear message that compliance is more than just a regulatory necessity—it’s a fundamental part of how the company does business.

For in-house compliance professionals, fostering this tone from the top is critical to building and sustaining an effective compliance program. It empowers employees to take compliance seriously, encourages ethical decision-making at all levels, and creates an environment where risks are managed proactively.

Ultimately, senior executives’ commitment to ethical leadership and compliance isn’t just good governance—it’s innovative business. By embedding compliance into the company culture through strong leadership, organizations can build trust with stakeholders, protect their reputations, and ensure long-term success.