DAG Lisa Monaco’s speech in September 2022 announcing the Monaco Memo as articulated in the Monaco Doctrine laid out the very basics of compliance; that the key to every company is culture. She stated, “corporate culture matters. A corporate culture that fails to hold individuals accountable or invest in compliance — or worse that thumbs its nose at compliance — leads to bad results.”
From the enforcement perspective, the DOJ will assess companies for their ethical cultures. From the compliance perspective, the ethical tone of a company and accountability all start at the top and, most specifically, senior management. This requirement is more than simply the ubiquitous “tone-at-the-top,” as it focuses on the conduct of senior management. The DOJ wants to see a company’s senior leadership doing compliance. The DOJ asks if company leadership has, through their words and concrete actions, brought the right message of doing business ethically and in compliance to the organization. How does senior management model its behavior on a company’s values, and how is such conduct monitored in an organization?
I once had a Chief Executive Officer (CEO) observe the following, “You want me to be the ambassador for compliance.” I immediately said yes, that is exactly what I need you to do. As an “Ambassador of Compliance,” a CEO can fully model the conduct that senior management engages in going forward. Another area a CEO can forcefully engage an entire company is through a powerful video message about doing business the right way and in compliance. A great example was a CenterPoint Energy video put out in 2015 after the Volkswagen (VW) emissions-testing scandal became public. The video featured Scott Prochazka, CenterPoint Energy President, and CEO. He used the VW scandal to address the culture and values at the company proactively and used the entire scenario as an opportunity to promote integrity in the workplace. But more than simply a one-time video, the company followed up with an additional resource, entitled, Manager’s Toolkit—What does Integrity mean to you? that managers used to facilitate discussions and ongoing communications with employees around the company’s ethics and compliance programs. Finally, the cost for the video was quite reasonable as it was produced internally.
Three key takeaways:
1. Senior management must do compliance; not simply talk-the-talk of compliance but also walk-the-walk.
2. Use your CEO to talk about current events and how those ethical failures are lessons to be learned for your organization.
3. Your CEO as Compliance Ambassador.
