In today’s edition of Daily Compliance News:
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Kim Yapchai, In the CCO Chair
The Compliance Life details the journey to and in the role of a Chief Compliance Officer. How does one come to sit in the CCO chair? What are some of the skills a CCO needs to success navigate the compliance waters in any company? What are some of the top challenges CCOs have faced and how did they meet them? These questions and many others will be explored in this new podcast series. Over four episodes each month on The Compliance Life, I visit with one current or former CCO to explore their journey to the CCO chair. This month, my guest is Kim Yapchai, the Chief Counsel – Environmental, Social & Governance at Tenneco Inc. This encompasses both compliance and sustainability.
Kim calls herself a “businessperson with a law degree” and she has had a distinguished career in the in-house world. She held in-house positions at Ford Motor Credit Company and Masco before moving to Whirlpool to become the company’s first Chief Compliance Officer. From there she moved to Tenneco to the CCO chair and then into her current role. Further, she is the company’s first Chief Sustainability Officer. In this role, she is working to improve transparency of information shared with stakeholders, set goals, and promote the use of that information by investors, customers, and others. Kim has received numerous awards include the prestigious Top Minds in Compliance Award from Compliance Week.
In this third episode, Kim discusses her move to the CCO chair at Whirlpool and then Tenneco. In the CCO role she had her first interactions with the Board of Directors and found they understood that compliance is a journey it is extremely hard to be perfect. She also worked to change the impression of the CCO as ‘Dr. No from the Land of No.’ Have you thought about a Candy Station in your Compliance Department? Kim explains how she used this simple idea to help foster breaking through silos.
Adam Frey, Managing Director at K2 Integrity, returns to the Innovation In Compliance podcast this week. He and Tom Fox have an interesting conversation about the important role of compliance in the organization, as well as how to create a culture of compliance from the front lines.
Owning the Risk
Tom comments on one of Adam’s catchphrases, “own the risk”. Adam explains that the front line must internalize the compliance risk of their day-to-day activities, as well as the business and personal impact of noncompliance. The back office as well as the front line must work together to have a seamless compliance solution. Adam says that this involves taking a holistic view of every transaction and the risks it presents. “I think it’s important for them to understand how [compliance risks] can impact at an operational level… and that they’re an integral component of preventing the company from potentially being in noncompliance… I think it’s important not to see it as just something that is somebody else’s job.” He shares that leaders should explain the ‘why’ of compliance. “One of the things that I find is that it’s really important to demonstrate to everybody involved why something is important, not just tell them that it’s important. I think they really appreciate when they can understand it, that they have a more of a stake in the outcome.”
Compliance as a Key Function
Tom and Adam discuss why compliance should have a seat at the table. Compliance is a key business function, they both agree. When management sees compliance as a collaborative partner instead of an obstacle, the front line will more likely come to compliance professionals with potential issues. “You get better buy-in when people understand that everybody is hopefully working towards the same goal and objective,” Adam says. Every employee should also internalize compliance as an individual function. This message and attitude should come from the top, as well as the middle and bottom, Adam argues. Compliance “has to be emphasized from the top until it gets internalized to the point where it becomes bottom-up, as well,” he says.
Training & Communication
“Where do you see training as a tactic that could be utilized here?” Tom asks Adam. “Training is absolutely one of the critical components of leveraging the tone from the top but also throughout the whole organization,” Adam responds. Training should be targeted and segmented according to the exposure and risk level of trainees. “It’s important to have training not just on compliance, but you can integrate training on the actual tone from the top, on code of conduct, on compliance culture, where those issues are integrated into your training, so you’re constantly re-emphasizing and reiterating those points as part of that process,” Adam continues.
Ongoing communication about the importance of compliance is also critical. Adam shares practical tips leaders and compliance professionals can use to spread the message of compliance both in word and actions.
Resources
K2Integrity.com
Adam Frey on LinkedIn
In this episode, I was pleased to visit with Fry Wernick and Mike Ward, both partners at Vinson & Elkins. We dissect the three biggest anticorruption enforcement actions: Airbus, J&F Investments and Goldman Sachs. Fry explains things from the government perspective and Mike takes a look at things from the in-house CCO or compliance professional perspective. Their collective insights were great and I know you will enjoy this episode:
I. Airbus
DOJ Perspective
- In this case, the UK and France took the lead in the investigation? What does this mean workload wise in the FCPA unit?
- There were claims other than FCPA violations investigated by the US. How, if at all, did those impact the FCPA investigation.
- What are some of the unique challenges in working with French prosecutors and theFrench blocking statute.
- How does the DOJ work thru the gross penalty with other countries?
Company Perspective
- What does this case tell a compliance professional?
- What was the bribery scheme? What is the MO of the bad guys?
- What controls were discussed in the settlement documents?
- What company conduct was rewarded?
II. J&F Investments
DOJ Perspective
- How do you evaluate something so massive, yet largely resolved by the time the DOJ takes the lead?
- How is it to work with Brazilian prosecutors? Does each large international investigation have its own character and cadence?
Company Perspective
- This case had difficult corporate governance issues.
- Your M&A protocol needs to be in place but the risks from each transaction are bespoke.
- In many ways, the case was a testament to deep pockets.
- Pay attention to what is said in the resolution documents.
III. Goldman Sachs
DOJ Perspective
- Obviously as the biggest FCPA prosecution ever, how does the Dept. work up such a case. Are there multiple prosecutors working up different aspects of the case?
- How do you coordinate both internationally and domestically with all the other regulatory bodies?
- What is the one pie concept and why is it so important?
Company Perspective
- Why was there no monitor?
- Compliance needs to be persistent and persistently right.
- Why are compliance red flags also commercial red flags?
- Will clawbacks become the norm?
For more information on Fry Wernick and Mike Ward and their practices, check out the Vinson & Elkins website here.
In today’s edition of Sunday Book Review:
- Down and out in Paris and London by George Orwell
- The Great Gatsby by F. Scott Fitzgerald
- Lie Down in Darkness by William Styron
- The Kandy Kolored Tangerine-Fake Streamline Baby by Tom Wolfe
Do you have a poor performing employee?
Legally, you may have to terminate. However, this could be a test of your leadership!
In today’s episode we’re digging into seven questions leaders should ask of themselves and employees. These seven questions will help you level up your leadership so you can be sure you’ve left nothing on the table when it comes to leading others well.
Let’s dig in!
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