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Daily Compliance News

October 22, 2019- the What Else Haven’t You Told Us edition

In today’s edition of Daily Compliance News:

  • Lebanese President bows to anti-corruption fervor. (NBC)
  • Softbank rescues WeWork. (WSJ)
  • What else haven’t they told us? More trouble for Boeing. (NYT)
  • Why we need more storytellers (and less economists)? (Washington Post)
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Why a Duck

Coconuts and the OFAC Compliance Framework

From Vaudeville to the Silver Screen to the Small Screen, the Marx Brothers made an impact wherever people found them. Now Tom Fox and Mike Volkov have wedded their love of the Marx Brothers with their passion for compliance and bring them into the boardroom to help explain and explore the sometimes-chaotic world of governance, risk-management, ethics and compliance. In this episode they discuss the movie Coconuts and how it informs the OFAC Compliance Framework.  Highlights from the podcast include:

  1. Why has Mike Volkov called the OFAC Compliance Framework a ‘game-changer’?
  2. How does the OFAC Framework illustrate regulatory convergence?
  3. What are some of the highlights of the OFAC Framework?
  4. What are some of the key lessons learned for the ABC compliance professional?
  5. How does data analytics as mandated in the OFAC Framework inform ABC compliance programs going forward?
  6. What are the mandates built into the OFAC Framework?
  7. How can an ABC compliance practitioner use the OFAC Framework if their company is under FCPA scrutiny?

Resources

  1. From Tom Fox-see articles on the OFAC Compliance Framework.
  2. Introduction
  3. Management Commitment
  4. Risk Assessment
  5. Internal Controls
  6. Testing, Training and Auditing
  7. From Mike Volkov-See article on the OFAC Compliance Framework.
  8. Introduction
  9. Risk Assessments and Internal Controls
  10. Testing and Auditing and Training
  11. Review of Lessons Learned
  12. Download a copy of the OFAC Compliance Framework, here.

Marx Brothers
Coconuts-the full movie on YouTube.

Categories
FCPA Compliance Report

Francine McKenna with an update on the KPMG-PCAOB Scandal

In this episode I visit with one of my favorite people, Francine McKenna, a reporter at MarketWatch. We check in on the current developments in the KPMG-PCAOB scandal including recent guilty pleas, sentencing and where the matter might finally be headed. Some of the highlights include:
·       A review of the Indictment and underlying facts.
·       A review of the horrendous facts about KPMG that came out during the March trial.
·       What does it say about the PCAOB that two of its former Board members were witnesses for the defense in the trial?
·       What did all this mean for KPMG head Lynne Doughtie? What does all this mean for audit independence, particularly in the Jay Clayton era at the SEC?

·       Where can listeners go for more information?

Resources

Francine McKenna on MarketWatch

MarketWatch website

Re: The Auditors blogsite

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Daily Compliance News

October 21, 2019- the Hanky Panky edition

In today’s edition of Daily Compliance News:

  • Will the first opioid case go to trial on Monday or settle? (NYT)
  • More bad news for Boeing. (WSJ)
  • What happens when an investigation gets too close to the BOE? (BBC)
  • Is there ‘Hanky Panky’ going on regarding insider trading and the Trump Administration? (Vanity Fair)
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Daily Compliance News

October 20, 2019 Sunday Book Review -the Chicago Press edition

In today’s edition Sunday Book Review edition of Daily Compliance News:

Categories
Popcorn and Compliance

Star Trek-The Motion Picture

In this podcast series, recovering screenwriter (and Mr. Monitor) Jay Rosen and Tom (the Compliance Evangelist) indulge in passion for the movies by looking at them through the lens of compliance. Jay is a contemporary movie fan and I am more of a classic movie maven so we present a well-rounded view of the movie fandom. If you want to indulge in your love for the movies with two guys who are passionate about Hollywood and get some ideas for your compliance program, this is the podcast series for you. For this  offering, we consider the Star Trek-The Motion Picture.
Some of the highlights include:

  • Why was the plot so special effects driven?
  • Why did the movie take so long to make?
  • Did it make money (or not)?
  • What are some of the leadership lessons?
  • What are some of the compliance lessons?
  • Tom gives the Inside Hollywood story of the production.
  • Tom gives the movie a full bucket of Popcorn. Jay tepidly gives the movie 1/2 bucket of stale popcorn.

Join us again where in our next episode of Popcorn and Compliance, we consider Star Trek II-The Wrath of Khan.

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Daily Compliance News

October 19, 2019- the Mother Said ‘Don’t Tell Lies’ edition

In today’s edition of Daily Compliance News:

  • There’s a reason Mother said don’t tell lies. (Business Insider)
  • You shouldn’t even lie unintentionally. (WSJ)
  • Pharma CEOs going to the woodshed? (NYT)
  • Will SEC move towards more direct listings? (FT)
Categories
This Week in FCPA

Episode 176– the Lets to To Doral edition

As Tom revels in the Astros inexorable march towards the World Series, he and Jay reflect on Doobie Brothers nomination to the Rock N Roll Hall of Fame and also discuss some of this week’s top compliance and ethics stories which caught their collective eyes.
1.     Is disclosure of a COI enough or should companies go further? Jeff Kaplan.
2.     What is the ‘last mile of finance’ and how is it achieved?  French Caldwell explains.
3.     Ex Credit Suisse bankers to testify in Mozambique corruption case. Patricia Hurtado reports.
4.     French anti-corruption agency issues guideline for T&E, in a White & Case client alert.
5.     When COIs get people killed. Matthew Stephenson on Trump and his business interests in Turkey.
6.     Were Wells Fargo fraudulent accounts tactics used by AT&T? Jaclyn Jaeger explores.
7.     Richard Bistrong explains what channel stuffing is, how he used it to make his numbers and why it’s accounting fraud.
8.     Is it time for Boards to revisit their compliance obligations? Posted by Robert Biskup, Krista Parsons, and Robert Lamm, opine.
9.     Doobie Brothers head (Tom’s) nominations for the 2020 inductees into the Rock N Roll Hall of Fame. Andy Greene reports.
10.  This week Jay joins Tom in a five-part podcast series exploring ethical culture in a corporation, sponsored by AMI. Check out the following lineup: Monday-What is Ethical Culture;  Tuesday-Factors Influencing Ethical Culture; Wednesday-The Role of the CCO; Thursday – Assessing Ethical Culture; Friday– the Role of Ethical Culture in an Overall E&C Program. The podcast will be available on multiple sites: the FCPA Compliance Report, iTunes, JDSupra, Megaphone, YouTube,  Spotify and theCompliance Podcast Network.
11.  Popcorn and Compliance is back as Tom and Jay return to take a look at Star Trek-The Motion Picture. Its posts Saturday, October 19 at 7 AM.
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.
For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

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FCPA Compliance Report

Why Culture Matters-Episode 5, How is ethical culture a part of an overall ethics and compliance assessment?

Welcome to this special five-part podcast series with Jay Rosen, VP of Business Development for Affiliated Monitors, Inc. (AMI), who is the sponsor of this podcast series. Corporate culture exists in the space between what an organization professes and what it does. In this series Jay and I will be exploring key aspects of corporate culture, including why it matters, what influences culture, the CCOs role in culture, assessing corporate culture and how to use that information to improve culture. In this concluding Part V, we consider how an ethical culture is a part of an overall ethics and compliance assessment. 
Highlights include:

  • Begin with framework for such an assessment, usually the compliance program itself.
  • Is your training both focused and effective?
  • Is there institutional fairness in your promotion and compensation programs?
  • Is there institutional justice around reporting, discipline and investigations?
  • Is your compliance program a paper program or is it fully operationalized?
  • Is there accountability in your organization?

For more information see Jay’s blog post How is ethical culture a part of an overall ethics and compliance assessment? on Corporate Compliance Insights.
For more information on Affiliated Monitors, Inc. check out their website here.

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Excellence in Training

Measuring Training Effectiveness

In this episode of Excellence in Training, Shawn Rogers provides some of this thoughts on measuring training effectiveness.
To measure the effectiveness of a compliance training program, you can’t come up with a metric that measures how many violations it prevented. Everybody knows intuitively that training helps prevent compliance violations. Again, that measurement is too far removed from the purpose of the compliance training program. However, it would be a good metric for the overall training program if you could figure out how to do it.
But how often do you see companies reporting the number of classes that were delivered? Or how many hours of compliance training were completed? It happens all the time. It could be a completely accurate statistic. It could be a measure of compliance program efficiency. It could be an indicator of an active compliance training program. But it in no way shows if the compliance training is effective.
But there are ways to measure training effectiveness. You can show that the training was aligned to the company’s risk profile. With user surveys and focus groups you can measure whether the learners feel that the training is applicable to their role and you can measure user satisfaction. You can ask learners to give examples of how they have changed the way they do their jobs.
Why don’t companies do a better job in measuring the effectiveness of compliance training? Because it’s very challenging to do. But there are ways to do it. Shawn conclude with one of his current ‘most favorites’ implemented at GM this year.
At GM there is a cybersecurity course that explains how to avoid phishing email scams. It is required of all employees that have a GM email account. To measure how effective the training was, the IT function came up with a method of sending out emails to random batches of employees that should have been recognized as phishing emails if they had paid attention to the training. If the employee recognized that the email was suspicious and clicked on the “Report Phishing” button, they were congratulated on reporting the email as suspicious. However, if they clicked on the link in the email, the IT team knew that the training had not met its objective. And, those employees that clicked on the link were kindly informed that they had failed the competency test and were provided with immediate feedback on how to avoid phishing scams.
Disclaimer-As a company, GM uses many training vendors. GM’s compliance function primarily uses two vendors. Rogers has worked with other good vendors that currently do not work with GM. Rogers is not promoting any specific vendors, nor is he disparaging any specific vendors in this podcast. And, of course, these opinions are Roger’s alone and opinions that  developed over almost 15 years. He is not speaking on behalf of GM in any way.