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Everything Compliance - Shout Outs and Rants

Everything Compliance – Episode 110: Shout Outs and Rants

Welcome to the only roundtable podcast in compliance as we celebrate our second century of shows. Everything Compliance has been honored by W3 as the top talk show in podcasting. In this episode, we have the quintet of Jay Rosen, Jonathan Armstrong, Jonathan Marks, Tom Fox, and Matt Kelly with our fan-fav Shout Outs and Rants section.

1. Matt Kelly rants about the Department of Justice CCO certification requirement for Danske Bank.

2. Jonathan Marks rants about the recent FAA failure, which crippled the US airline industry.

3. Tom Fox has his first dual shout-out. His first shout-out is to US District Judge Middleton for sanctioning Donald Trump and his lawyer, jointly and severally for $938,000 and the recently deceased musician David Crosby.

4. Jonathan Armstrong rants about the Tory proposed law against publicizing small boats that would make showing or even talking about the Bayeux Tapestry illegal.

5. Jay Rosen shouts out to the NFL for the playoffs and for getting us the best four teams in the final four.

The members of Everything Compliance are:

  • Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Karen Woody – One of the top academic experts on the SEC. Woody can be reached at kwoody@wlu.edu
  • Matt Kelly – Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong –is our UK colleague, who is an experienced data privacy/data protection lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com
  • Jonathan Marks is Partner, Firm Practice Leader – Global Forensic, Compliance & Integrity Services at Baker Tilly. Marks can be reached at marks@bakertilly.com

The host and producer, ranter (and sometimes panelist) of Everything Compliance is Tom Fox the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.

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Innovation in Compliance

Why Sustainability is the Business Opportunity with Richard Blundell

Tom’s guest on this week’s episode of Innovation in Compliance, Richard Blundell, discusses the risks and opportunities associated with growth in the insurance industry. They talk about how to finance a company’s growth by understanding its risks. Business financing is trending towards sustainability, and Tom and Richard explore how companies can access capital by implementing sustainable practices and strategies.

A global environmental services and technology consultant with over 35 years of experience, Richard Blundell has extensive experience in senior executive management and consulting. Mergers and acquisitions, corporate and market development, and operations management are among his areas of expertise. His experience includes launching new businesses and managing growth-stage businesses around the world. He is also an advisor to the Prince of Wales Accounting for Sustainability charity.

 

Here are some key points Tom and Richard talk about: 

  • Richard talks about his professional background and current role as an advisor on sustainability.
  • Richard believes that sustainability in business leads to lower costs, less waste, more resource efficiency, better quality jobs, better employee engagement, and more access to capital.
  • In addition to improving access to capital, sustainability can also improve performance in public markets, lower capital costs, and lower debt costs.
  • Richard highlights that materiality is a way for companies to determine priorities and goals for sustainability, decarbonization, and ESG by considering what is important for both the corporation and its stakeholders
  • Quoting Paul Wellman, Richard tells Tom that working toward social, environmental, and economic outcomes can invigorate and energize an organization.
  • Sustainability can be a life insurance policy for the planet.
  • Companies without decarbonization plans may not have access to financing from banks and other financial institutions as they do not understand the risks associated with growth and may not be seen as providing a benefit to society, Richard tells Tom.
  • Richard believes that the circular economy aims to eliminate waste by keeping inputs and outputs at their highest utility throughout their life cycle.
  • Companies like Interface and Nike are committed to sustainability and continue to innovate and stretch their targets as they learn more about driving efficiency and process in the decarbonization journey.

 

KEY QUOTE:

“If I am going to finance a company’s growth, I want to finance a company that’s in the insurance industry as well. I want to finance the company’s growth by understanding the risks associated with that growth.” – Richard Blundell

 

Resources 

Richard Blundell | LinkedIn

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Daily Compliance News

January 24, 2023 – The Funding Was Secured 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 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.

Stories we are following in today’s edition of Daily Compliance News:

·       When is it time to step down.  (Bloomberg)

·       Elon Musk now says funding was secured.  (WSJ)

·       Dual purpose test upheld by SCT for attorney/Client privilege claim.  (Reuters)

·       Ukraine President vows action against corruption. (NYT)

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Blog

Operationalizing Compliance: Part 2-Compliance Program Design

Welcome to a special five-part podcast series on Operationalizing Your Compliance Program, sponsored by Broadcat LLC. Over this series, I visit with Jennifer May, Director of Compliance Advisory; Taylor Edwards,  Director of Sales; Xinia Pirkey, Design Manager; Alex Klingelberger, Chief Executive Officer (CEO) and Jaycee Dempsey, Director of Customer Success. We consider a variety of ways to more fully operationalize your compliance regime, including the design and effectiveness of your communications, why the operationalization of compliance is a team sport, why simply data is not the answer and how to avoid being overwhelmed. In Part 2, I am joined by Jennifer May and Xinia Pirkey to consider your compliance program design.

May began that the key is relevance and clarity. If your training or communication is not relevant, it really does not “matter how perfect the design is or even how perfect the message is, if it is being shared with someone that’s the wrong person, it will fall flat”. In other words, your compliance team is “just wasting time blanketing the entire workplace with some piece of information that does not apply to most of them.” Regarding clarity, she said, “If you are not clear about what it is you want them to do, what the behavior is that you are trying to achieve, you will lose their attention there as well.” All of this can lead to wasted time for your employees and wasted effort for your compliance team, “potentially even starting to lose some credibility.”

Pirkey is a design professional so comes at these issues from a different perspective from May or myself. Pirkey said, “we use design, from my point of view, to leverage the content to be on point to the audience that will receive it.” As a design professional, you must always consider the user experience so “we have to think about the users and who we are trying to target.” She added,  “As a designer, I come in and I try to interpret the content and I try to interpret as much as I can and ask the questions, such as “Who is this for? What am I trying to say? How do I want them to read this step by step?” You must always be cognizant not only about the audience, but also how we are projecting to them.”

Next, we considered how effective content can create credibility for your compliance function or conversely, ineffective content can demean your compliance function credibility. Pirkey began by noting that it is all about content, intoning, “we start with content.” Interestingly, she said that “a lot of times this means that we’ve come up with a format, whether it is a decision tree, an infographic, a written piece of content or other; and it is in a manner we can project it as job aid to our audience.” She also noted that conversely, there are times “we have to go back to the drawing board and decide, OK, this does not work as a decision tree. We need to think about a different format, a contrast example, or another approach.”

We closed with a discussion of the ‘secret sauce’ to creating great compliance communications tools. May believes it “is that back and forth and the community of diverse voices that we have, because we all have such unique experiences in our professional backgrounds.” When you couple this with the intent and “focus on trying to help organizations make these communications as simple, easy, straightforward” you can begin to achieve great compliance messaging. “Blending these approaches, the design method, thinking in that way, being collaborative with each other, being open with each other, and then doing that same thing on the backside with our clients too; that is the secret sauce. That’s the thing that makes Broadcat successful and a really awesome place to work with and work for.”

Join us in Part 3 where we look at operationalization.

For more information go to TheBroadcast.com

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Compliance Kitchen

Compliance Kitchen on OFAC and DOJ Developments

The Compliance Kitchen returns with a wrap-up of the week’s top trade and economic sanction issues. In today’s episode, Silvia Surman looks at OFAC issues Russia-related sanctions licenses and allows for limited marine activities on SDN vessels; DOJ obtains a guilty plea for EAR violations due to unlicensed exports of chemicals to a Chinese SOE listed on the Entity List.

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Greetings and Felicitations

Podfest Expo 2023 – Jessica Schiller Silverman on 4 Elements of your Mental Health

In this episode of the PodfestExpo 2023 Preview Podcasts series, I visit with Jessica Schiller Silverman, host of the podcast at A.L.I.V.E., and discuss her presentation at PodfestExpo on the four elements of your mental health. Some of the issues we tackle in this podcast are:

  • How to find freedom from trauma.
  • How Chris Krimitos brings out the best in everyone.
  • How to be safe, seen, and supported at PodfestExpo 2023.

I hope you can join me at PodfestExpo 2023, hosted by Podfest Global. This year’s event will be January 26-29, 2023, at the Renaissance Orlando at Seaworld in Orlando, Florida. The line-up of this year’s event is simply first-rate, with some of the top names in podcasting.

Podfest Expo is a community of people interested in and passionate about sharing their voice and message with the world through the powerful mediums of audio and video. We’re proud to unite as many people as possible to learn, get inspired, and grow better together.

PodfestExpo is so much more than just a mere conference. While we pride ourselves on featuring the most engaging speakers, exciting topics, and in-depth content, the thing that sets PodfestExpo event apart from all others is the tight-knit community we’ve been building since 2013. You don’t just attend a Podfest event – you become part of the Podfest family.

Whether you’re new to podcasting or a veteran podcaster looking to innovate and improve your podcast, our easy-to-understand Conference Topics allow you to customize a daily agenda based on what you’re most interested in learning. No matter your skill level or experience, PodfestExpo 2023 has plenty to offer!

I hope you can join me at the event. For information on the event, click here. As an extra benefit to listeners of this podcast, Podfest Expo is offering a discount on the registration price. Enter discount code Fox10.

 PodfestExpo 2023 is a production of Podfest Global, which is the sponsor of this podcast series.

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31 Days to More Effective Compliance Programs

Day 23 – Assessing Compliance Internal Controls

What happens when controls are continually overridden? Does that necessarily mean that companies are engaging in activities that violate the FCPA or some other law, such as Sarbanes-Oxley (SOX)? Cristina Revelo said she would start with questions like “How often would something be manually approved? How often are controls skipped, what is the level of approvals that you have, and what is your documentation? What are the reasons, and are you documenting how often a certain department requires those overrides?” While it could indicate a company lacks a culture of compliance or everything is an emergency, it might mean something else. It might mean that your internal controls must be evaluated and recalibrated. In the FCPA Resource Guide and the Update to the Evaluation of Corporate Compliance Programs, the Department of Justice calls this continuous monitoring leading to continuous improvement. Joe Oringel, a co-founder of Visual Risk IQ, calls it continuous controls monitoring.

However, many compliance professionals, particularly lawyers, think once control is in place, it’s set in stone and there forever. This derives from the unfortunate fact that, once again, many compliance professionals and most lawyers do not understand internal controls. Yet, internal controls, much like the rest of a compliance program, can and should be continually monitored and improved based on information such as the number of overrides. Such a review can be evidence of a management problem or a culture of non-compliance at the organization. However, it could be that perhaps the controls need to be adjusted.

 Three key takeaways:

1. An internal control override is not necessarily bad if proper procedure is followed.
2. Internal controls are not set in stone.

3. The key is to have a process for monitoring the controls, taking input literally from each line of defense.

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Innovation in Compliance

Operationalizing Compliance: Part 1 – Compliance Program Effectiveness Jennifer May

Welcome to a special five-part podcast series on Operationalizing Your Compliance Program, sponsored by Broadcat LLC. We consider various ways to more fully operationalize your compliance regime, including the design and effectiveness of your communications, why the operationalization of compliance is a team sport, why simply data is not the answer, and how to avoid being overwhelmed. In Part 1, I am joined by Jennifer May to consider compliance program effectiveness.

Highlights from this episode include:

·      What is and is not effective?

·      Identify silos and work through them.

·      Compliance is not a closed-book test.

·      Document Document Document

For more information, go to TheBroadcat.com

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Corruption, Crime and Compliance

Deep Dive into the ABB FCPA Case

ABB is a three-time loser in foreign bribery enforcement but still agreed to pay $315 million to settle FCPA charges. The company also resolved SEC charges for $75 million.

ABB’s criminal history includes bid rigging and bribery violations in multiple countries. However, the DOJ cited ABB’s extraordinary cooperation and extensive remediation when they announced the settlement. In this week’s show, Michael Volkov explores ABB’s history of FCPA violations leading up to their most recent.

 

  • ABB paid a settlement of $315,000,000 for its extensive criminal history record, including multiple violations of the Foreign Corrupt Practices Act and a prior conviction for price fixing. The settlement raised questions about the effectiveness of the Justice Department’s new FCPA enforcement program, which is designed to prevent benefits for recidivists.
  • The case involved two ABB subsidiaries in South Africa and Switzerland, and the parent company agreed to a three-year deferred prosecution agreement. The company also resolved SEC charges for $75 million and faced foreign prosecutions in South Africa, Switzerland, and Germany.
  • ABB was also involved in a bribery scheme between 2014 and 2017 to obtain confidential information and win lucrative contracts with South Korea’s state-owned energy company, ESCOM Holdings. They engaged multiple subcontractors who were linked to a high-ranking ESCOM official and made payments to these subcontractors despite their poor qualifications and lack of experience. In exchange for these bribery payments, ABB secured improper confidential information needed for bidding and securing valuable contracts.
  • ABB established a relationship with an additional subcontractor. This subcontractor failed various portions of the ABB due diligence process, including its financial stability and qualifications. ABB required a specific waiver of due diligence requirements to be approved, which they did. On its face, the approval of a waiver creates significant red flags. 
  • ABB took important first steps in learning about the potential violation by immediately scheduling a meeting with the DOJ and committing to change. However, the settlement papers did not give any detail as to what made ABB’s cooperation extraordinary.

 

KEY QUOTE

“For companies that have to decide whether to disclose and may hesitate because of their criminal histories, the answer now is fairly clear that it is a better idea in many cases to voluntarily disclose, remediate and cooperate.” – Michael Volkov.

 

Resources

ABB Agrees to Pay Over $315 Million to Resolve Coordinated Global Foreign Bribery Case | OPA | Department of Justice

ABB Settles SEC Charges That It Engaged in Bribery Scheme in South Africa 

Email Michael: mvolkov@volkovlaw.com

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All Things Investigations

All Things Investigations: Episode 19 – Chief Compliance Officer Certification Requirement with Kevin Abikoff

Welcome to the Hughes Hubbard Anti-Corruption and Internal Investigations Practice Group’s Podcast, All Things Investigations. In this podcast, host Tom Fox and returning guest Kevin Abikoff of the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group, highlight some of the key legal issues in white collar investigations, locally and internationally.

Kevin Abikoff is partner and Deputy Chair at Hughes Hubbard, and Chairman of the firm’s Anti-Corruption & Internal Investigations Practice Group. He specializes in securities and white-collar criminal litigation, enforcement, regulation and counseling with an emphasis on the representation of entities in anti-corruption (including FCPA) matters.

Key ideas we discuss in this podcast:

  • The DOJ has instituted a new requirement for CCOs to certify that their programs are “reasonably designed” to detect and prevent violations of the law.
  • The potential for liability as a CCO.
  • How this new requirement may pressure CCOs to go beyond their usual duties in order to make the certification.
  • Corporate governance as a remediation of the CCO certification requirement.
  • The board of directors should be responsible for overseeing corporate compliance programs, rather than just nominally doing so.
  • The DOJ listens to commentators and evolves in their own thinking.

KEY QUOTE
“Part of the narrative [for CCO certification] is that it gives CCOs a seat at the table. If you don’t have a seat at the table after you’ve gone through a FCPA enforcement action, I think there are bigger problems.” – Kevin Abikoff

Resources

Hughes Hubbard & Reed website 

Kevin Abikoff on LinkedIn