Author: Admin

In this five-part series, I have walked through the core compliance risks US energy companies will face as they consider a return to Venezuela. We began with bribery and corruption and the long shadow of PDVSA (Parts 1 & 2), then moved to export controls (Part 3).

Today, we consider the security risks and the broader operational and strategic challenges of working in one of the most complex risk environments in the world. For many compliance professionals, “security” still conjures images of guards, gates, and cameras. It is treated as an operational afterthought or a line item buried somewhere between facilities and travel. The conversation I recently had with Marc Duncan, COO at Salus Solutions, should permanently disabuse compliance officers, boards, and senior executives of that narrow view. As Duncan describes it, security is not a physical function. It is an enterprise risk discipline. It is continuous monitoring at its purest. And it is inseparable from culture, governance, and decision-making authority.

For compliance professionals, especially those operating globally or in volatile environments, this conversation offers a masterclass in how risk really works when theory collides with reality.

The First Compliance Failure: Thinking You Already Know the Risk

One of the most striking observations Duncan makes is also one compliance professionals hear far too often after a failure: “We did not see that coming.” As Duncan notes, that usually means the organization was not looking. They had a preconceived notion of their threats, locked onto a narrow risk model, and failed to challenge their assumptions. This is a classic compliance failure. Risk assessments that confirm management’s beliefs instead of testing them are not risk assessments. They are comfort exercises.

True threat assessment, whether physical, cyber, financial, or reputational, begins with abstraction. You step back, examine the environment holistically, and then break it down across functions. Duncan’s approach mirrors what the DOJ expects from a mature compliance program: financial risk, personnel risk, operational risk, cyber risk, structural risk, and external conditions assessed together, not in silos. Compliance professionals should take note. If your risk assessment is static, annual, and checklist-driven, you are already behind.

An additional framework compliance professionals should consider integrating into this approach is Threat and Hazard Identification and Risk Assessment (THIRA). While THIRA originated in the public sector and homeland security context, its core discipline translates directly to corporate compliance and enterprise risk management. THIRA forces organizations to first identify credible threats and hazards, assess their likelihood and impact, and only then evaluate existing capabilities and gaps. The discipline prevents the most common compliance failure: designing controls around assumed risks rather than actual ones.

A THIRA has three key steps:

• Identify Threats and Hazards: Identify the threats and hazards that could impact them. These can include natural disasters such as hurricanes and earthquakes, technological hazards such as power outages, and human-caused events such as terrorism.
• Assess Impacts: Once threats and hazards are identified, assess the potential impacts of these events. This involves understanding how these threats could affect people, property, and the environment.
• Determine Capabilities: Based on the assessed impacts, determine the capabilities they need to address these threats and hazards. This includes identifying gaps in current capabilities and planning for resource allocation and training.

Used properly, THIRA complements a compliance risk assessment by grounding it in real-world scenarios, stress-testing assumptions, and aligning resources to consequence rather than convenience. In practice, compliance teams can use THIRA-style analysis to model disruptive events, validate whether policies and response plans would function under pressure, and ensure that authority, communications, and escalation protocols actually work in dynamic conditions. Like Duncan’s threat hub, THIRA is most effective when it is iterative, cross-functional, and embedded into daily decision-making rather than treated as a one-time exercise.

Continuous Monitoring Is Not a Buzzword in a Crisis Zone

In compliance circles, we often talk about continuous monitoring and continuous improvement. In high-risk environments, Duncan explains, these are not aspirational concepts. They are daily survival requirements. Threats change by the hour. Routes become unsafe. Infrastructure fails. Information degrades. Misinformation spreads intentionally. As Duncan makes clear, relying on sanitized reports or publicly available data alone is insufficient, particularly in places like Venezuela, where reliable information can be scarce and manipulated.

For compliance professionals, the parallel is obvious. If your organization relies solely on lagging indicators, static dashboards, or once-a-year training, you are operating on yesterday’s intelligence. A mature compliance program must be dynamic, responsive, and empowered to change course quickly.

Authority Matters More Than Policy

One of the most underappreciated insights in the discussion is the emphasis on delegated authority. Duncan is blunt: security teams must be empowered to make changes on the fly. Operations teams often resist this because they have a plan for the day. But rigid plans fail in dynamic environments. Compliance professionals should see themselves clearly in this description. How often does compliance identify a risk, only to be overruled by operational convenience? How often does policy exist without authority to enforce or adapt it?

This is not merely an execution issue. It is a governance failure. If compliance, security, or risk professionals lack real authority, then the program exists in name only.

Boards Are Often the Weakest Link

Perhaps the most candid portion of the conversation is Duncan’s discussion of boards of directors. Boards understand that risk exists, but they often do not understand their lane. Worse, they sometimes overstep based on assumptions rather than expertise, thereby influencing the organization’s security and risk culture to its detriment. This should resonate deeply with compliance professionals. Many compliance failures originate at the policy level. Boards check in periodically, hear a summary, and move on. They rarely engage with the complexity of the operating environment or the second- and third-order consequences of their decisions.

Duncan advocates for an ongoing relationship with boards or policy groups, not episodic briefings. Education is continuous. Risk is dynamic. Governance must keep pace. For compliance officers, this reinforces a critical point: board engagement is not about presentations. It is about sustained dialogue, shared understanding, and clearly articulated risk tolerance.

Culture Is Defined by Accepted Loss

One of the most insightful compliance lessons emerges from Duncan’s discussion of risk acceptance, particularly in the energy sector. Every organization accepts some level of loss. The problem arises when that acceptance is implicit, unexamined, or outdated. Compliance professionals should recognize this immediately. Risk tolerance that is not written down, debated, and revisited becomes invisible policy. It shapes behavior without accountability.

Duncan’s approach is instructive. He pushes organizations to explicitly articulate acceptable loss, document it, and use it as a guideline. When conditions change, that tolerance must be reassessed at the policy level. This is exactly how compliance culture should function. Silence is not neutrality. It is permission.

Security Is Not Just Physical: Insider Threats and Human Risk

If compliance professionals think security stops at the perimeter, Duncan quickly disabuses them of that notion. Insider threats loom large. Alcoholism, substance abuse, personal stressors, and poor life choices can all create vulnerabilities. So can espionage, coercion, and cultural dysfunction.

This is compliance territory. Training that treats employees like mushrooms kept in the dark will fail. Effective programs connect behavior to consequences: personal, professional, financial, and reputational. Duncan’s emphasis on “wholesome” training aligns with modern compliance expectations. Employees must understand not just what is prohibited, but why it matters, how it affects the organization, and how it exposes them personally.

Partnering with Locals: A Lesson in Third-Party Risk

One of the most counterintuitive lessons for many executives is the need to partner with local communities, vendors, and even security forces. Cutting locals out of economic participation breeds sabotage and resentment. Compliance professionals should immediately recognize the parallel to third-party risk management. Isolation does not reduce risk. Engagement does. Oversight, contracts, inspections, and partnerships create shared incentives and stability.

Whether it is food supply, logistics, or perimeter security, Duncan emphasizes layered controls and local investment. This is not unlike building a resilient third-party ecosystem rather than relying on transactional relationships.

The Threat Hub: A Compliance Blueprint

Perhaps the most transferable concept for compliance professionals is the “threat hub.” Duncan describes a cross-functional, daily forum where representatives from legal, finance, operations, security, and other functions review threats, vulnerabilities, and operational changes. This is what an effective compliance program should look like. Not a standalone department issuing policies, but an integrated function embedded across the organization, sharing intelligence, and adapting in real time.

Finally, Duncan issues a challenge that every compliance officer should take seriously: crisis exercises will break you. They expose gaps in policy, logistics, communications, authority, and preparedness that no binder ever reveals. Compliance professionals often assume crisis plans are adequate because they exist. Duncan’s experience says otherwise. Without realistic testing, organizations are unprepared when it matters most.

Final Thoughts

This conversation makes clear that security, compliance, and risk are not separate disciplines. They are different lenses on the same problem: how organizations survive and succeed in uncertain environments.

For compliance professionals, the takeaway is simple but uncomfortable. Static programs fail. Assumptions kill preparedness—authority matters. Culture is shaped by what leaders tolerate. And boards must be educated partners, not distant overseers. In high-threat environments, failure is immediate and unforgiving. In corporate compliance, it is slower, but no less certain.

The choice, as always, is whether to learn before the crisis or after it.

Join us tomorrow for Part 5 as we conclude our series by looking at AML risks associated with returning to Venezuela.