In today’s edition of Daily Compliance News:
- Zuma trial to start in April.(AfricaNews)
- Tesla joins trillion-dollar club. (NYT)
- FARA-the basics. (Grand Jury Target)
- China Telecom license to do business in US revoked. (BBC)
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Bid Rigging on DoD Contracts
The DOJ obtains guilty pleas from two former security services executives for bid rigging of DoD security contracts. Stop by to get the scoop.
There’s a certain etiquette involved in why we don’t see people eating in subways. So when a case of really stinky food breaks out, and you get ‘olfactorily pissed’, you just have to find who the suspect is!
Share the laughter and exasperation in this new episode of F*CKING ARGENTINA with Tom Fox and Gregg Greenberg. ▶️
#MalodorOnTheNumberFiveExpress
ABOUT THE BOOK
F*cking Argentina and 10 More Tales of Exasperation by Gregg Greenberg is a compilation of short stories that dive into the American phenomenon of being in a near-perpetual state of aggravation. Greenberg’s anthology brings together eleven original pieces of work, each with their own slice of independent and distinct plot lines but all converging on the universal theme of exasperation. They run the whole gamut of scenarios, from the titular story “F*cking Argentina” wherein the country is once again in bankruptcy and a polite game of tug o’ war at a couples dinner to a malodorous snack on the subway. Stories end with the superlative f-word, which showcases at some point in other stories, and a guaranteed chuckle from their readers. Buy the book here: http://fckingargentina.com/.
Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.
Welcome to the Everything Compliance fan favorite edition of Shouts Outs and Rants. Jonathan Armstrong shouts out to the Class of 2021 who lost a year of in-person learning but finally are able to receive their diplomas in person. Matt Kelly goes on an extended rant about the debt crisis and the moral bankruptcy of the GOP. Tom Fox shouts out to the Houston Astros form making their third trip to the World Series in 5 years and predicts a Houston victory over Atlanta. Jay Rosen has a melancholy rant about shooting victims on movie sets. Karen Woody rants about WeWork going public via a SPAC. Jonathan Marks rants about hotel which are charging pre-pandemic prices while delivering post-pandemic (lack of) services.
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 John Melican, former CCO at AMEX Travel and now Managing Director at Exiger.
Melican discussed his decision to join Exiger. He talked about how his time as a CCO and his roles in AML compliance help him as a consultant. He talked about the changing role of the CCO and the compliance function and the increased use of data and tech solutions. We ended by looking down the road to where a CCO position will be in 2025 and beyond.
Resources
John Melican LinkedIn Profile
Exiger
Dan Sholler is Tom Fox’s guest on this week’s episode of the Innovation in Compliance Podcast. He is the Software Product Marketing Leader at Exterro, an organization that creates software that helps clients address regulatory, compliance, and litigation risks at affordable costs. Dan joins Tom to talk about the work Exterro is doing in the realms of compliance risk governance.
The Evolution of Exterro
Exterro has adapted its ability to measure its results more easily, as well as test alternative approaches. Dan explains to Tom that they can test alternative messages, as well as alternative means of delivering those messages. Technology can be used to drive some of the communication to make that initiative work.
The Importance of Plan Sponsor Audits
Plan sponsor audits are significant because it’s a universal change in regulatory posture. This affects how compliance professionals need to think about their responsibilities. In the past, regulatory agencies would use a checklist for compliance personnel on compliance activities. They were more concerned with the end report. These audits shift the focus from the report ability of the compliance professional to the details of implementation that the compliance professional uses. These audits want detailed proof.
In Lieu of Cyber Incident
“When people think about cybersecurity, the first thought that comes to mind obviously is prevention,” Dan remarks. The last few years have seen the escalation in cyber and ransomware attacks. It has also demonstrated that no amount of prevention is going to be good enough to limit the impact of those incidents. It’s not a matter of if, but when. The way compliance professionals limit that impact is a big part of what needs to be done from the cyber security perspective. “No one needs to respond to a [cybersecurity] incident in a technical sense,” Dan says. What needs to be done instead, is to isolate whatever has happened within that environment and gather the relevant evidence in order to potentially catch the perpetrators. Business continuity also needs to be established, and the systems need to be brought back up as quickly as possible. Regulators will be looking at how tightly coordinated an organization’s incident response plans are.
Legal GRC
Legal GRC is the governance risk and compliance activities that affect the legal and compliance organizations. Various operational activities have their own GRC and they are specific to those organizations, not a part of overall corporate governance. Dan tells Tom that Exterro is looking to bring together governance risk and compliance activities and its implementations into a single platform. This will make risk, controls, and implementation of those controls visible. This is important because there is a great deal of common processes that are cross-functional within legal and compliance.
What’s Next
Dan tells Tom that in the future it will be commonplace for GRC subsets that focus not only on GRC but also on the implementation of its controls. It’s not just going to be about compliance with regulation, but also compliance with the policy.
Resources
Dan Sholler | LinkedIn | Twitter
Exterro
A Texas grand jury indicts former Boeing 737 MAX Chief Technical Pilot. Listen in for more detail on this development.
Tom Fox evangelizes on why the compliance department is best suited to run the corporate ESG program on this week’s episode of the ESG Report.
The Materiality Assessment
Many regulatory frameworks view the risk assessment as the key foundational mechanism to identify risk for the corporate compliance program. In the ESG space, you need to understand material ESG matters, which transforms your standard risk assessment into a materiality assessment. It’s important for several reasons, Tom tells listeners, including:
- It’s the starting point from which you manage your non-financial risks and opportunities;
- It helps determine topics that should be considered in the business/sustainability strategic development;
- It is the starting point for an overall sustainability framework;
- It helps you gauge the impact of your business on society and the environment, as well as meet stakeholder expectations.
A Strategic Business Tool
KPMG sees the materiality assessment as a strategic business tool. “This is because it provides an opportunity to apply a sustainability lens to business risks, opportunity trendsetting and enterprise risk management processes,” Tom explains. It’s a formal exercise whose objective is to engage stakeholders to find out which ESG issues matter most to them. “Insights gained can be used to create strategy and communication and help you tell a more meaningful sustainability story,” he continues. He outlines the 7 steps in conducting a materiality assessment.
Policies & Procedures
Your ESG policies and procedures are your first line of defense when stakeholders come knocking, Tom argues. They should outline responsibilities for compliance within the organization, as well as detailed internal controls, auditing practices, and documentation policies. These policies should be regularly reviewed and updated. In addition, properly documented policies, that are signed by employees, serve as internal communication and control. “Together with a signed acknowledgement,” Tom remarks, “these documents can serve as evidentiary support if a future issue arises.” Regulators and investors want to see that you consider your impact on the environment, the community, and your employees.
Why Compliance Should Lead ESG
Materiality assessments and policies and procedures are “directly in the wheelhouse of the compliance professional,” Tom points out. While there are some technical aspects, particularly in the environmental sphere, that need subject matter experts, they can still be overseen by the compliance officer. He advises compliance professionals to familiarize themselves with materiality assessments and ESG policies and procedures since ESG is here to stay. “But remember, probably 80% of what you do as a compliance professional – if looked at in a different light – would fall under the S and the G of ESG.”
Resources
Tom Fox email
FCPA Compliance and Ethics blog
In this Episode of the FCPA Compliance Report, I begin a special two-part series with Matt Silverman on trade compliance. Matt leads the VIAVI Global Trade team and provides strategic guidance to management on international regulatory requirements – including customs, export controls, embargoes, sanctions and antiboycott laws – enabling compliant movement and market access for VIAVI’s products, software, technology and services. Highlights of this podcast include:
- What got Matt interested in trade compliance?
- What is trade compliance?
- Why has trade compliance become not only more challenging but more important in the corporate world?
- Under the prior administration, it seemed like new sanctions were announced almost daily. Has that pace of sanctions continued under the current Administration?
Join us next week for Part 2 where we dive into a best practices trade compliance program, trade compliance into 2025 and beyond and trade compliance and ESG.
Resources
Matt Silverman on LinkedIn
Articles by Matt Silverman
Build A Visitor Management Program That Ensures Export Compliance, International Trade Blog, July 7, 2021
Employee Behavior and Workplace Culture: Measuring Your Training’s Impact, Ethikos, July 2021
Export Compliance & Anti-Discrimination: Best Practices to Resolve Competing Interests,
PLI Chronicle: Insights and Perspectives for the Legal Community, June 2021
Considerations and Challenges in Developing Compliance Training, CEP Magazine, May 2021