The week of Thanksgiving is the time of our annual trip to the most beautiful and unique city on earth-Venice, Italy. With travel to Italy shut down this year due to Covid-19, I am visiting Venice virtually and mining this rich city for compliance lessons. Today’s lesson come from the Arsenale and incentives in compliance. This is not a precursor to that famous north London football club, the Arsenal Gunners, but the district in Venice where one of the main commercial enterprises of the city took place, that being ship building and ship repair. At one point, the Arsenale employed almost 10% of the city’s workforce or 12,000 people.
I picked up some interesting compliance insights in learning more about the Arsenale. On the incentive side there were several mechanisms the City of Venice used to help make the Arsenale work force more loyal and desirous to stay in their jobs, all for the betterment of themselves and their city. The first was job security. The Arsenale was so busy for so many years that lay-offs were unheard of. Even if someone lost their job, through injury, mishap or worse; they received enough of compensation that they could live in the city. Finally, when a worker died, the company provided not only funeral expenses but would assist in taking care of the family through stipends or finding other work for family members.
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In this episode, I am joined by Mike Lindsey, a partner in the Los Angeles law firm of Steinbrecher and Span. Lindsay specializes in cyber risk issues. He joins me to discuss those legal issues around cyber security, e-commerce, internal communications and ephemeral messaging.
Some of the highlights include:
- The nature of Lindsey’s practice.
- Description of legal work on in the areas of (a) e-commerce structuring, (b)new media development and (c) co-branding, alliance and other marketing arrangements.
- How should a company put out e-learning information on near misses or actual ethical/policy/Code of Conduct violations and protections do they need to consider for the employee(s) involved?
- What are the key issues when responding to a data breach?
- What is data mapping and why should a company do so on a proactive basis?
- Recently the DOJ announced that Chief Compliance Officers should have access to all corp data? Does this raise in data privacy/data protection risks?
- How should a company try and capture ephemeral messaging?
Resources
LinkedIn page for Mike Lindsey
Steinbrecher and Span page for Mike Lindsey
Steinbrecher and Span homepage
In today’s edition of Daily Compliance News:
- BoJo reaches Brexit endgame. (FT)
- New marketing for a brave new world? (WSJ)
- Did AI help solve a jewel heist? (TimesofIsrael)
- Movie releases not in Kansas anymore. (NYT)
If there is one thing that is ubiquitous throughout this city it is the Gondolier, the Venetian Gondola boatman. You are never far from hearing their cry of “Gondola, Gondola” to attract tourists for a fabled and romantic gondola ride. One thing I notice about the Gondolier that in addition to having a stout pairs of lungs, they are almost all in very good physical condition. They have to be piloting this very old craft by hand in and around the crowded waters of Venice.
I thought about this as a metaphor for improving your compliance program. As a CCO or compliance practitioner, the more you can get out of the office, into the field and meet the troops the more fit your compliance program will be. Any best practices compliance program should have input from the geographies, cultures, business units and corporate functions within the company. It is well understood that a compliance procedure that works well in the US may not work in Indonesia.
In today’s edition of Sunday Book Review:
- Money: The True Story of Made-Up Thing by Jacob Goldstein
- The Money Plot by Frederick Kaufman
- God and Mammon by Lance Morrow
- No Rules Rules By Reed Hastings and Erin Meyer
As Rudy Giuliani charges the Trump Administration $20K a day for fantasy legal representation, Tom and Jay are back to look at top compliance articles and stories which caught their eye this week.
1. OECD finds big success in US anti-corruption efforts. Menqgi Sun in the WSJ Risk and Compliance Journal. To read the full report, click here.
2. Clawbacks in FCPA enforcement. Dick Cassin explores in the FCPA Blog.
3. Investor protection at the PCAOB? J. Robert Brown in the NYU Compliance and Enforcement Blog.
4. Can lawyers be CCOs? Only if you rewire your legal brain. Nicole Di Shino in Corporate Compliance Insights.
5. Och-Ziff pays cheated investors (finally). Dylan Tokar in the WSJ Risk and Compliance Journal.
6. The scrourge of human trafficking. Mike Volkov takes a 2-part look in Corruption Crime and Compliance. Part 1. Part 2.
7. Getting rid of corruption enablers. Rick Messick in GAB.
8. Corporate governance under the Biden Adminisration. Michael Peregrine in the D&O Diary.
9. Katie Smith is back with Part 3 of her four episode month on The Compliance Life. This week’s episode is knowing when its time to go.
10. Interested in sports, the Boston Celtics or leadership. Check out my podcast with Compliance Week Editor in Chief, Dave Lefort with our reflections of Tommy Heinsohn.
11. On the Compliance Podcast Network, on 31 Days to a More Effective Compliance Program, we into compliance in the 2020s and beyond. Monday-innovation through KPIs; Tuesday-Compliance at the table; Wednesday– Consistency as a Compliance best practice; Thursday– creating an inventory of metrics; Friday– Leveraging AI in Complinace Investigations. Note 31 Days to a More Effective Compliance Program now has its own iTunes channel. If you want to binge out and listen to only these episodes, click here.
12. Join K2 Integrity MD Anna Gumowska and Director Shannon Rainey as they discuss investigative due diligence to help uncover areas of risk and opportunity in the acquisition context. Webinar will be Wednesday, December 2 at 1600 GMT, 10 AM CT, 11 AM ET. Registration and details are available here.
Tom Fox is the Compliance Evangelist and can be reached at tfox@tfoxlaw.com. Jay Rosen is Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com.
I am joined once again by AMI Managing Director Stern. In this episode, we look at a third-party independent in non-profit setting and how it could help universities survive Varsity Blues. Many people might not consider the need for a third-party independent in the non-profit setting. However, in light of the Varsity Blues scandal and the negative publicity around it, there is renewed interest in this approach in an area where it has not previously seen a lot of traction. Most interestingly, Stern believes this will be the “next frontier” for federal, state and local prosecutors. He believes there is a “landscape for potential abuse out there” and that Varsity Blues may only be the starting point.
It really starts from the position that most non-profits have less money than for-profit businesses so their compliance programs are typically not as well invested in. Moreover, most non-profits tend to see themselves, because they typically do not have a profit motive, as not open to waste, fraud and abuse. As Stern said, “they see themselves as wearing white hats and they do not see the need for compliance programs.” Finally, they tend to be very siloed. All these factors make the need for robust compliance even more important.
The bottom line is that after the NCAA basketball corruption scandal, the Varsity Blues college admissions scandal and others, non-profits will be investigated more thoroughly by federal, state and local regulators. Hiring a third-party independent, such as Stern, on a proactive basis can help any entity.
Find out more about Affiliated Monitors Inc. by checking out their website here.
Jennifer Saperstein is an Anti-Corruption and White Collar Partner and the Vice Chair of the Anti-Corruption Practice Group at Covington and Burling LLP. She joins Vince Walden to discuss why companies need to be smart about resourcing, compliance technology trends, and the compliance industry post-COVID.
Having a risk-based documented plan for effective compliance programs before consulting any external advisory service is beneficial for companies. Being able to demonstrate where they have focused their limited resources is always helpful. It is now even more important for companies to make smart, risk-based decisions about where to spend their time due to the current pandemic.
A recent survey of over 30 companies revealed that in the last 10 years, there has been a significant transformation in compliance technology trends. Almost 70% of respondents say they use technology for third-party due diligence and 100% saying they use an LMS system to train employees. However, many companies still rely on manual processes for certain parts of their compliance programs.
Resources
Jennifer Saperstein on LinkedIn
Cov.com
