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31 Days to More Effective Compliance Programs

The Compliance Advantage of Data


The Department Of Justice and Securities and Exchange Commission have both made it clear that they expect companies to be more robust in their use of data analytics in compliance programs. This means using data to not only detect and prevent illegal conduct but also in the remediation prong of any best practices compliance program as well through continuous improvement. Former Deputy Assistant Attorney General Matthew Miner said in a speech that the DOJ will inquire whether compliance departments have access to internal data that could help them identify misconduct and whether compliance officers make adequate use of data analytics in their reviews of companies under investigation. Since at least 2016 in the Foreign Corrupt Practices Act (FCPA) enforcement action involving Key Energy Services, Inc., the SEC has been communicating to compliance professionals of the need for increased use of data and data analytics in any compliance program.
The new DOJ Antitrust Division released its Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (Antitrust Guidance), was the clearest regarding this mandate when it stated, “Does the company use any type of screen, communications monitoring tool, or statistical testing designed to identify potential antitrust violations?” For the anti-corruption compliance professional, this means you need to incorporate a statistical analysis into your ongoing monitoring to see if there are any anomalies which could be indications of FCPA violations.
The bottom line is that it is not if but when you begin to incorporate corporate information into your compliance program to make your compliance program more efficient and your business process run more effectively. My suggestion is that you begin now to identify the data you have access to and the data to which you currently do not have access. Find a way to bridge that gap.
Three key takeaways:

  1. What advantages can data bring to your compliance regime?
  2. Both the DOJ and SEC have said companies need to be using data in their compliance programs.
  3. Data will make your compliance program more effective, your business process more efficient and your company more profitable.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit this month’s sponsor Affiliated Monitors at www.affiliatedmonitors.com.

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Daily Compliance News

March 5, 2020-the Kid Gloves Treatment edition


In today’s edition of Daily Compliance News:

  • Trump Administration promised Wells Fargo kid gloves treatment. (NYT)
  • SEC seeks to ease more fund raising rules for start-ups. (WSJ)
  • Is being a frequent flyer bad environmentally? (New York Times)
  • Former Uber exec order to pay Google $179MM, files for bankruptcy. (Washington Post)
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Trekking Through Compliance

Picard-Episode 5, Stardust City Rag


Welcome to a special series of Trekking Through Compliance, the podcast series inspired by my review of Star Trek, the Original Series. In this special series I am joined by another uber Star Trek maven, Megan Dougherty, co-founder of One Stone Creative. In this series we will review the new television show Picard which is currently streaming on CBS.
SPOILER ALERT-Although we will review each episode after it appears, we will discuss each episode in depth.
Episode 5, Stardust City Rag. In a flashback, Seven of Nine mercy-kills Icheb, a fellow former Borg drone saved by Voyager, after his Borg implants have been ripped out by the black-marketeer Bjayzl. In the present, La Sirena arrives at Freecloud, where Raffi discovers that Maddox is being held prisoner by Bjayzl, who intends to sell him to the Tal Shiar. Picard’s crew plan to recover Maddox by staging a prisoner exchange, with Seven (and her Borg implants) as the bait. When Bjayzl recognizes Seven, Seven drops the charade and reveals her true intention: to kill Bjayzl to avenge Icheb. Picard persuades Seven to relent, and Maddox is safely recovered and beamed to La Sirena. Afterward, Seven returns to Freecloud and kills Bjayzl without Picard’s knowledge. In sickbay, Maddox tells Picard what he knows about Soji and Dahj, explaining that he sent them to Earth and the Artifact in order to discover the true motivation behind the synthetics ban. After Picard leaves them alone, Jurati tearfully murders Maddox, saying “If you’d seen what I saw”. Meanwhile, Raffi tries to reconnect with her estranged son Gabriel, who is married to and expecting a child with a Romulan woman but is rebuffed and returns to La Sirena.
Highlights, speculations and questions include: 

  1. The humanity of 7/9 (and Picard).
  2. Is Picard aging too quickly?
  3. What are some of the cookies in this show?
  4. Does revenge belong in the Star Trek universe?
  5. What is Jurati’s agenda? Is she a plant on the team?
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12 O’Clock High-a podcast on business leadership

Jeffrey Hayzlett on The Hero Factor


Richard Lummis is on assignment this week so I am pleased to host Jeffery Hayzlett, the Chairman of C-Suite Network (including C-Suite Radio) and Prime Time Television and Podcast Host. Among all these other activities, he is prolific author. Today, we visit about Jeffery’s most recent book The Hero Factor. Highlights of this podcast include:

  1. Why Hazylett wrote this book?
  2. What is Hero Leadership?
  3. What is Hero Intensity?
  4. Values Values Values
  5. Why are a hero’s values so important?
  6. The book has questions, practices pointers and even a self-assessment in the book. Why are these tools include in the book?
  7. Who should read this book?
  8. What is the Hero Club?
  9. Why is Hayzlett so passionate about the Hero Club and Hero Leadership?

Resources
For information about the C-Suite Network, click here
Find out more about The Hero Club, click here
Purchase The Hero Factor here.

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31 Days to More Effective Compliance Programs

Skills for Innovating in Compliance


Innovation in compliance is one of my passions for every Chief Compliance Officer (CCO) and compliance practitioner. So much so that I dedicate an entire podcast series to the topic, aptly named Innovation in Compliance. I was therefore intrigued with a recent Harvard Business Review (HBR) article, entitled What Kind of Chief Innovation Officer Does Your Company Need?, by Darko Lovric and Greig Schneider. They developed six-character types for innovators, which I have adapted for the different skills set a CCO might need to create innovation in compliance.

  1. Research skills – research skills allow folks to come up with new ideas and garner insights from large amounts of data.
  2. Engineering Skills – Engineering skills are used to build something that works, as in now.
  3. Investor skills- investors see innovation as the means to an end, and that end is growth.
  4. Advocacy skills – Advocacy skills help to deliver something new for the end user.
  5. Motivational skills- motivational skills in innovation but the authors found they work to unleash the employees’ imaginations.
  6. Organizational skills– Organizational skills are the true process focused skill set, focusing on extents like key performance indicators (KPIs), metrics, and stage gates.

While you may not find one person with all of those skills, by identifying them a CCO might be able to bring a range of skills to an innovation project. Further, by tempering some of the more extreme aspects of each skill set by partnering it with a countervailing skill set, a CCO can bring a much more robust response to innovating. Also remember that innovation in compliance does not necessarily require a high cost of entry. You can innovate by looking to process improvement and moving outwards.
Three key takeaways:

  1. Do you have an innovation expert in your compliance team?
  2. What skills do compliance professionals have that lend themselves to innovation.
  3. Think about broadening out your compliance reach through innovation.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit this month’s sponsor Affiliated Monitors at www.affiliatedmonitors.com.

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Great Women in Compliance

Beth Colling: The Public Speaking Guru


Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley. In episode 53 of the Great Women in Compliance Podcast, we speak with Beth Colling, the Chief Compliance Officer of CDM Smith, a global engineering and construction company.
In this packed episode we ruminate about several topics including the false sense of security low risk countries can provide, keeping up with an exercise routine as a busy professional and hear what it’s like for an executive to shuttle between two different cities regularly – Beth’s home base is in Charlotte and CDM Smith is headquartered in Boston – Beth lives in both cities!
Beth’s reputation as a popular and engaging public speaker precedes her – she is one of the best of the best. If you see her on a conference agenda, you will not regret going to her session. In light of that we asked Beth for her public speaking and presentation secrets to help you in your next Compliance training or conference presentation.
Have you entered our contest to win a complimentary registration at Compliance Week’s annual conference yet? If not, head over to our LinkedIn page, you can find it by searching Great Women in Compliance Podcast Community, scroll down for the post on the contest and comment with your biggest takeaway from listening to the podcast. It’s as easy as that! Entries close on 12 March 2020 so get yours in now!
Join the Great Women in Compliance community on LinkedIn here.

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Compliance Into the Weeds

Cardinal Health FCPA Enforcement Action


Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode we take a deep dive into Cardinal Health FCPA enforcement action brought by the SEC. Some of the highlights include:

  • What is the background to the matter?
  • How did a Chinese acquisition cause so much FCPA grief?
  • What were the types of business relationships involved?
  • How did the corporate office respond?
  • What red flags were spotted or missed?
  • Why didn’t the corporate office take stronger action?
  • What was the SEC’s response in the fine and penalty phase?

Resources
Matt Kelly blog post, Cardinal Health Pays $8.8 Million on FCPA Issues
Tom Fox blog post, Cardinal Health FCPA Enforcement Action: High Risk Business Relationships

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Daily Compliance News

March 4, 2020, the Herbalife edition


In today’s edition of Daily Compliance News:

  • Herbalife reserves $40MM for FCPA settlement. (WSJ)
  • Was US Gymnastics one big scam? (WSJ)
  • Trump wants to lift ban on transporting LNG by train, putting every city, town and hamlet at risk. (Washington Post)
  • Banks claims that with coronavirus they need less regulation. (Washington Post)
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31 Days to More Effective Compliance Programs

Welcome to ComTech


What will be the role of AI in compliance going forward? LawTech disrupted the legal profession and reshaped many areas of private practice. I believe there will is a nascent ComTech industry lurking down the road with multiple implications for the compliance function.Obviously, document review is one area where ComTech would be most useful. There are many companies which provide key word searches and these same concepts translate readily into the compliance world through massive database searches for key words, such as an ongoing review through email sweeps. There is yet another set of AI tools that can review contracts to see if any specific types of clauses are non-standard.
Soon compliance will be pushed more to the forefront in AML. AI will allow a more robust KYC approach. Another area where compliance is often left behind is in the arena of M&A. AI can help in this area. There are companies which have software that allows thousands of documents to be reviewed in the M&A context. A prime example of where AI can assist the compliance function is with third-parties in supply chain management.
There have always been technological innovations which help make compliance disciplines run more efficiently, more smoothly and more profitably. AI is simply another step in this line of technological developments. There is certainly no reason to be afraid of using it. Given the disruption which has impacted the legal profession through LawTech; disruption is not far behind in the compliance world through ComTech.
 Three key takeaways:

  1. AI has already disrupted the legal profession; the compliance profession will be next. ComTech will be the result.
  2. Document review will be the first area of significant AI use in compliance.
  3. Beware the limitations and disadvantages of ComTech.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit this month’s sponsor Affiliated Monitors at www.affiliatedmonitors.com.
 

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Innovation in Compliance

Coronavirus Risk Exposure with Ben Locwin


Ben Locwin chats with Tom Fox about COVID-19 and the risk management issues associated with the disease in this week’s Innovation In Compliance show. 

What is Coronavirus?
Ben says that coronaviruses have been around for a long time. During flu season, about 10% of patients with upper respiratory symptoms test positive for a type of coronavirus. The epicenter of the outbreak of this particular strain of the coronavirus is Wuhan, China, and there seems to be some correlation with the open air markets there. Though it’s suspected that the virus may have crossed from animals to humans, the nexus of the disease is unknown. He goes on to explain how the virus got its name and how it affects human cells.
Symptoms and Spread
Tom asks about the symptoms of the coronavirus (officially called COVID-19) and how it spreads. Symptoms, Ben says, include respiratory symptoms similar to a chest cold, such as coughing, having trouble breathing, and fever in more severe cases. In a relatively few cases, patients experience organ failure and septic shock and other serious issues, including death. Ben explains that this particular coronavirus spreads through aerosolized droplet infection: when an infected person coughs or sneezes in a public place, fine particulates of saliva and mucus are introduced into the air. Anyone there can inhale these particles and contract the disease. They can start experiencing symptoms within 2 to 14 days.
Common Sense Prevention
Ben comments on the stigma associated with COVID-19. While travel restrictions and other such responses make good sense, he points out that the outbreak of the virus is not yet a pandemic. If you’re experiencing upper respiratory symptoms, see your healthcare provider right away to have a test done. Your sample will be sent to the CDC for testing to determine if you have COVID-19. He advocates common sense prevention measures, the most important of which is hand hygiene: wash your hands regularly. When you’re in a public place try not to touch your eyes, nose or mouth and don’t touch food without washing your hands first. Face masks may also be useful. If you feel ill, stay at home, he advises.
Smart Risk Management Practices
Tom comments that many businesses are struggling with how to manage the risk associated with the disease. He asks Ben to give some advice in this regard. Ben responds that companies should take a smart approach. While you shouldn’t start panic buying and selling, and cease all travel, you should certainly limit non-essential travel whenever possible. “That’s just essentially limiting our exposure to risk,” he says. Tom adds that there are a number of modern communication tools that can be used instead of traveling to meetings. It’s sad that it takes situations like this to force companies to examine their business operations, Ben comments. However, by cutting out non-critical practices, businesses not only limit their risk exposure, but it also allows them to employ operational excellence.
Resources
CDC.gov/Coronavirus