Categories
Blog

Frankenstein and Compliance: Part 5 – Frankenstein Meets the Wolf Man: When Monsters Collide

Ed. Note: This month, on his podcast series Popcorn and Compliance, Tom Fox dives deep into the first five Frankenstein movies. Over October, Tom Fox will consider Frankenstein, The Bride of Frankenstein, The Son of Frankenstein, The Ghost of Frankenstein, and Frankenstein Meets the Wolf Man. This blog post accompanies the podcast series.

The first four Frankenstein films provide a useful progression for corporate compliance. Frankenstein examined innovation without adequate governance. Bride of Frankenstein shows leadership that understands risk but lets pressure and rationalization override judgment. Son of Frankenstein moved to inherited risk and the obligations that arise when new leadership discovers legacy problems. The Ghost of Frankenstein asks whether remediation actually works. 

Frankenstein Meets the Wolf Man (1943) changes the risk equation. There are now two monsters. Larry Talbot, played by Lon Chaney Jr., returns from The Wolf Man seeking a way to end the curse that transforms him into a werewolf. His search eventually brings him to the ruins of Frankenstein’s castle, where he discovers the Monster, played in this film by Bela Lugosi. Talbot revives him, Dr. Mannering becomes involved, and the film eventually delivers what its title promises: Frankenstein’s Monster and the Wolf Man collide.

For corporate compliance professionals, the movie provides a useful way to think about enterprise risk. Organizations necessarily divide risk into categories and assign responsibilities to different functions. Compliance may oversee anti-corruption, sanctions, third-party, antitrust, and other regulatory risks. Information Security manages cyber risk. Privacy oversees data protection. HR manages employment-related risks. Finance owns financial controls. Internal Audit provides assurance. Enterprise Risk Management looks across the organization. 

That structure is necessary. It can also create silos. The most significant corporate risks do not always remain within the categories management assigns to them. They interact. When they do, the resulting exposure may be greater than the organization sees when each risk is assessed independently. The compliance challenge is not simply identifying each monster. It is understanding what happens when they meet.

Risk Does Not Respect the Organizational Chart

Companies assign risk ownership because someone must be accountable. That is good governance. The problem begins when risk ownership becomes information ownership. Consider a third-party distributor operating in a high-risk market. Compliance may identify concerns about the distributor’s beneficial ownership. Finance may identify unusual payment requests. Information Security may detect suspicious access involving the distributor’s credentials. Internal Audit may identify invoice exceptions. Legal may become aware of litigation or regulatory concerns involving related entities. Each function may respond appropriately to the information it possesses.

Yet the organization may still fail if nobody connects those facts. The compliance issue is therefore not simply whether individual control functions are doing their jobs. It is whether the organization’s governance structure allows information to move across functional boundaries. This distinction matters more as corporate risks become more interconnected.

A cybersecurity event can become a privacy incident. A privacy incident can become a regulatory investigation. A regulatory investigation can create disclosure obligations. A third-party issue can become an anti-corruption problem, which can become a books-and-records problem, which can become a securities issue. Risk categories are useful for management. They are not boundaries that real-world events respect. 

The Wolf Man and Frankenstein’s Monster Are Different Risks

One useful aspect of Frankenstein Meets the Wolf Man is that its two principal characters represent different kinds of risk. Larry Talbot understands his condition. He knows that particular circumstances trigger his transformation and that the consequences can be severe. His risk is recurring and linked to identifiable conditions. Frankenstein’s Monster represents something different. He is a legacy risk repeatedly inherited, revived, and unsuccessfully controlled by others.

Put them together and the problem changes. Companies experience similar combinations. A business may have a known third-party risk that becomes significantly more serious when combined with expansion into a high-risk jurisdiction. A weak control environment may become more consequential when management introduces aggressive sales incentives. A cybersecurity vulnerability may become more significant when the company deploys an AI system with access to sensitive information. The risks do not merely accumulate. They can amplify one another. That is why risk assessment should consider interdependencies. 

Risk Aggregation Should Be Part of the Compliance Conversation

Traditional compliance risk assessments often organize risks by subject matter.

  • Anti-corruption risk.
  • Sanctions risk.
  • Antitrust risk.
  • Third-party risk.
  • Privacy risk.
  • Conflicts of interest.
  • Books and records.

That approach is useful because it creates structure and allows organizations to identify controls and owners. It can also obscure combinations of risk. Consider a company acquiring a business in a high-risk jurisdiction. The acquisition may involve weak financial controls, substantial government interaction, a distributor-based sales model, aggressive growth assumptions, and a local culture unfamiliar with the acquiring company’s compliance expectations. Each issue may appear manageable when assessed separately. Together, they may produce a materially different risk profile. 

The CCO should therefore consider adding risk aggregation to the compliance risk assessment process. Where do significant risks intersect? Which business units face several elevated risks simultaneously? Which third parties create exposure across multiple compliance areas? Which strategic initiatives combine new technology, new markets, new partners, and aggressive financial expectations? A heat map that displays risks individually may not reveal these relationships. Compliance should be able to explain not only where the red boxes are but also what happens when several red boxes occupy the same part of the business.

AI Is an Enterprise Risk Multiplier 

Artificial intelligence provides one of the clearest modern examples of the problem. Companies sometimes discuss “AI risk” as though it were one category. Unfortunately, it is not. An AI deployment can simultaneously raise privacy, cybersecurity, intellectual property, employment, discrimination, consumer protection, regulatory, third-party, recordkeeping, and reputational issues.

What about an AI tool used to assist hiring decisions? HR may view it as a talent-management system. Information Security may assess the technology vendor. Privacy may examine candidate data. Legal may consider employment requirements. Compliance may evaluate governance and ethical concerns. Procurement may negotiate the contract. Every function may perform its assigned task. The organization still needs someone to evaluate the complete risk picture.

The same issue arises when AI is used for internal investigations, compliance monitoring, customer interactions, sales recommendations, financial decisions, or employee evaluation. This is why AI governance requires cross-functional management.

Frameworks such as the NIST AI Risk Management Framework and ISO/IEC 42001 are useful because they encourage organizations to think about governance, accountability, risk identification, measurement, monitoring, and continual improvement rather than treating AI exclusively as an IT issue. The central business question is not which department owns AI. It is whether the governance structure addresses the risks created by the particular use case.

The CCO Should Be a Connector, Not the Owner of Everything

The increasing interconnectedness of risk raises an important question about the CCO’s role. The answer should not be that Compliance owns every risk involving law, ethics, or reputation. That approach creates its own governance problem.

Business management owns business risk. Information Security should remain accountable for cybersecurity. HR should remain accountable for employment processes. Finance should own financial controls. Legal should provide legal advice. Internal Audit should preserve its independent assurance role. The CCO can nevertheless play an important role as a connector.

Compliance often receives information from multiple parts of the organization. Hotline reports, investigations, third-party due diligence, monitoring results, policy exceptions, training data, regulatory developments, culture assessments, and risk assessments all provide different views of organizational behavior. That perspective can allow Compliance to identify patterns that may not be visible within a single business function. The CCO should therefore ask where information needs to be shared, where cross-functional escalation is necessary, and where significant risks require joint governance. The goal is coordination without diluting accountability.

Mission-Critical Risk and Board Oversight

This also connects to the broader Marchand discussion about board oversight of significant and mission-critical risks. Directors do not need to become operational risk managers. They do need reasonable assurance that management has systems to identify significant risks and escalate material information.

For interconnected risks, that means understanding how management aggregates information. 

  • Which risks are sufficiently significant to require cross-functional oversight?
  • How does management identify emerging combinations of risk?
  • Who resolves disagreements between control functions?
  • What information reaches the board?
  • How are significant risks assigned when they do not fit within one organizational function?

These questions matter most when a risk is central to the company’s business model. The board does not need to manage the monsters. It needs to understand whether management can see when they are moving toward one another. 

Practical Actions for the CCO 

Frankenstein Meets the Wolf Man suggests several practical actions for compliance leadership. The compliance risk assessment should identify not only individual risks but also significant risk intersections. CCOs should look for business units, markets, third parties, products, and strategic initiatives where multiple elevated risks converge. Compliance should establish relationships and information-sharing mechanisms with Internal Audit, Legal, Finance, HR, Information Security, Privacy, Procurement, and Enterprise Risk Management. Significant cross-functional risks should have clear owners, escalation criteria, and decision rights.

CCOs should also consider whether existing compliance dashboards show relationships among risks or simply report individual metrics. Data from investigations, hotline reports, third-party monitoring, policy exceptions, audit findings, and other sources can become substantially more valuable when analyzed together. For emerging technologies such as AI, Compliance should participate in cross-functional governance while avoiding the temptation to own every associated risk. The objective is not centralized ownership. It is connected governance.

The Compliance Lesson

Frankenstein Meets the Wolf Man completes the compliance progression of the Universal Frankenstein films. Organizations create risks. Leadership can compromise in responding to them. New management can inherit them. Remediation can fail to eliminate them. Then those unresolved risks can interact with other risks.

That final stage matters because modern corporate risk is increasingly interconnected. AI touches privacy, cyber, employment, intellectual property, and regulatory compliance. Third-party risk can implicate corruption, sanctions, human rights, cybersecurity, and financial controls. Compensation can affect culture, sales practices, fraud risk, and books and records. No single function can manage these issues effectively on its own.

The solution is not to eliminate functional ownership. Clear accountability remains essential. The solution is to build governance mechanisms that allow information to move, risks to be considered together, and significant issues to be escalated across organizational boundaries. For the CCO, that means becoming an effective connector while preserving the accountability of the business and other control functions.

For management, it means looking beyond individual risk categories. For the board, it means ensuring that committee structures and reporting processes provide an enterprise view rather than a collection of disconnected risk reports. The ultimate lesson from Frankenstein Meets the Wolf Man is therefore not really about either monster individually. It is about interaction. 

A company may understand its corruption risk. It may understand its third-party risk. It may understand its cybersecurity risk. It may understand its AI risk. It may have capable people managing each one. The question is whether anyone understands what happens when those risks meet. That is where compliance moves beyond individual rules and controls and becomes part of enterprise governance. 

After five films, the Frankenstein story leaves us with a useful framework for the modern compliance program: govern what you create, learn from what goes wrong, take responsibility for what you inherit, test whether remediation works, and understand where risks intersect. Because in business, as in the movies, managing one monster is difficult enough. The real governance challenge begins when monsters collide.

Check out the podcast version and analysis of this episode of Popcorn and Compliance with Timothy and Fiona.

Categories
Innovation in Compliance

Innovation in Compliance: The Salus Blueprint: Episode 2 – The Signal Lost Between Departments, Things Go Wrong?

What questions might a leader face on a difficult morning? In this special podcast series, Marc Duncan, Bridget Lee-Young, and Scott Pickett of Salus Solutions share one useful idea for corporate professionals, including risk and compliance leaders and anti-bribery and corruption professionals, and show how it changes decision-making. This podcast is also for police and fire chiefs, emergency managers, finance and operations executives, CEOs, boards, and leaders of commercial, public, and private organizations. Over the next 4 weeks, we’ll run this special series.

In Episode 2, we explore how to break silos with tripwires and dashboards and how organizations should evaluate and act on third-party and operational warnings, using repeated contractor communication failures as a potential red flag. We emphasize forensic assessment to determine whether issues are human, process, or technical, and the importance of timely, credible information and formalizing informal communication channels. This podcast highlights that third parties are often the highest risk and that companies must perform and test vendor due diligence beyond tabletop exercises, distinguishing mistakes from potentially criminal conduct through evidence, paper trails, and investigative techniques. Salus describes a multidisciplinary approach that integrates operational, financial, legal, and supply-chain risks; documents findings for defensibility; and helps leaders interpret data through predefined triggers/tripwires and business rules. They also address board oversight needs through dashboards, common operating pictures, and framing updates as confirmed, validating, and unknown, previewing the next episode on separating credible warnings from rumors.

Key highlights:

1. “A staff member says the contractor’s communications system has failed twice. What makes that report useful rather than a vague complaint? ”

2. “What minimum context do you seek: time, place, affected service, source, what was observed, what was inferred, and who already knows? ”

3. “What is the difference between a report of an irregular vendor request and an allegation of bribery? How do we avoid prejudging it? ”

4. “What happens when operations knows of an interruption, compliance knows of a vendor concern, and emergency management knows a storm is coming, but no one sees all three?”

5. “Who should see what information, and how does an organization protect confidentiality while connecting the right people? ”

6. “What does SalCAPA do to help people exchange observations, requests, records, and status? What must a human still decide? ”

7. “What should a leader do when a report is incomplete but potentially consequential? ”

Questions for Our Listeners: Write down one current concern, capture who reported what, when, the potential effect, and the next person responsible for checking it. Could your organization tell the difference between a credible warning and a convincing rumor before making a costly or dangerous decision? Next time, we show how information becomes qualified intelligence.

About Salus Solutions: “Salus helps organizations understand what matters, make informed protective decisions, and carry them into action. SalCAPA is the method and coordination environment that connects those steps.”

Categories
AI Today in 5

AI Today in 5: October 29, 2026, The Explainable AI Edition

Welcome to AI Today in 5, the newest addition to the Compliance Podcast Network. Each day, Tom Fox will bring you 5 AI stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to AI Today in 5. All from the Compliance Podcast Network. Each day, we consider five stories from the business world on compliance, ethics, risk management, leadership, or general interest in AI.

Top AI stories include:

  1. Explainable AI for AML. (FinTechGlobal)
  2. What are Anthropic’s existential risks? (WSJ)
  3. AI agents need middle managers. (FT)
  4. Who’s in charge of AI? (Bloomberg)
  5. AI rogue behavior starts with its training. (NYT)

My first work of general non-fiction is now out: Deluge Before Dawn, the story of the 2025 flood in Kerr County, Texas, which killed 119 people and devastated a county. It is a story of tragedy, heartbreak, survival, and resilience.

It is available on the following sites:

Amazon.com

Stoney Creek Publishing

Barnes and Noble

Texas A&M University Press

Bookshop.org

Google.Books

Walmart

Categories
Daily Compliance News Uncategorized

Daily Compliance News: October 29, 2026, The Calling It Quits 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 in to the Daily Compliance News. All from the Compliance Podcast Network. Each day, we cover four stories from the business world, compliance, ethics, risk management, leadership, or general interest for compliance professionals.

Top stories include:

  • Xi’s corruption purge is wiping out potential leaders. (Bloomberg)
  • Weil Gotshal is dissolving. (WSJ)
  • UBS not married to Switzerland. (WSJ)
  • Bolsonaro flees to the US to avoid corruption charges. (DW)

My first work of general non-fiction is now out: Deluge Before Dawn, the story of the 2025 flood in Kerr County, Texas, which killed 119 people and devastated a county. It is a story of tragedy, heartbreak, survival, and resilience.

It is available on the following sites:

Amazon.com

Stoney Creek Publishing

Barnes and Noble

Texas A&M University Press

Bookshop.org

Google.Books

Walmart

Categories
Blog

AI in the Audit Room: Why a Signature Is Not Evidence of Effective Oversight

Imagine a company with an AI policy—employees complete training. Important outputs supposedly receive human review. The board sees an approval dashboard and assumes it’s managing the risk. Now ask a different question: What evidence shows that the review changed anything?

That is the central compliance challenge in ECI Compliance Week’s AI in the Audit Room. The report was prepared in conjunction with Workiva. The collection translates its AI Governance Framework into an audit program, connecting 14 controls across three tiers to specific tests and supporting evidence. AI-in-the-Audit-Room For Chief Compliance Officers (CCOs), the lesson is straightforward: AI governance must demonstrate how decisions are controlled, challenged, and improved. A policy describes expectations. An approval records an action. Neither, on its own, proves that a control works.

The Oversight Gap Is an Operational Problem

45.2 percent of the respondents reported training or awareness programs, while 33.8 percent reported usage monitoring or logging by IT or security. Separately, the collection reports that approximately one in four executives in Workiva’s 2026 Midyear Executive Benchmark Survey said internal audits had discovered AI errors after outputs reached external stakeholders or board members. Only 11 percent believed their data quality was sufficient for AI use.

These findings should prompt a practical examination of where assurance occurs. Finding an error after distribution is not the same as preventing unsupported information from reaching a decision-maker. Workiva’s separately labeled partner contribution proposes an “assurance architecture” built around governance, traceability, and defensibility. The useful compliance question is whether management can explain what data informed an output, which model produced it, and what an employee authorized.

For an AI-assisted disclosure, that means following the information back to its source rather than accepting a plausible explanation. Ask whether reviewers can retrieve the supporting material and distinguish verified inputs from unsupported assertions. Traceability should make challenges possible before release, not merely explain a failure afterward.

Tier One: Establish Foundations That Can Be Tested

The framework’s first tier contains five controls: an accountable executive, an AI policy, an AI use inventory, employee AI training, and an annual program review. The accompanying audit tests make those familiar concepts concrete. The accountable executive needs authority and budget. The inventory must cover licensed products, AI embedded in existing software, and tools employees adopted independently. Training must reach actual users and match the policy in force. The annual review must produce findings that lead to action.

For the CCO, start with the inventory. Reconcile it against procurement, identity, and expense records, as the framework recommends. Then examine whether each material use has an owner and an appropriate data classification. Do not stop at asking whether training occurred. Ask which users received it and whether the content addressed their activities.

The same discipline applies to program review. A dated report is not the endpoint. Look for assigned remediation, closure dates, and evidence that the organization changed something because of what it learned.

Tier Two: Make Governance Part of Daily Operations

The second tier covers third-party AI due diligence, an AI speak-up channel, incident response, and employee AI use attestation. The third-party control is particularly important. The framework calls for reassessment when AI functionality arrives through a software update, not merely when the original contract is signed. It also calls for identifying the underlying model provider chain and determining whether customer data is used for training.

For compliance teams, that means connecting procurement and vendor oversight to technology change management. The original supplier approval should not be treated as the final assessment of every capability subsequently introduced. The speak-up and incident controls should work together. An employee who identifies troubling output needs a route to someone with AI governance expertise. Where appropriate, a substantive response should lead to investigation, containment, root-cause analysis, and control changes. Employee attestations should also update the inventory rather than disappear into a training database.

My practical recommendation is to test that entire process with a realistic scenario: an approved tool produces an unsupported claim intended for an external report. Determine who receives the concern, who can stop distribution, and what evidence documents the resolution.

Tier Three: Govern the Use Case and the Authority

The third tier addresses pre-deployment approval, human oversight and output monitoring, AI agent access and security, bias and fairness considerations, and external transparency. A critical distinction is that approving a tool is not the same as approving every use of that tool. The framework calls for separate use-case approval records, including cross-functional review for uses affecting financial reporting, customers, or employees.

For agents, the control table calls for unique identities, least-privilege access, defined limits on autonomous action, reconstructable action logs, and a tested way to stop the system. It also calls for testing decisions that affect people and can produce disparate outcomes and for substantiating public statements about AI. Translate these expectations into demonstrations. Ask the system owner to show an agent’s permissions, reconstruct an action, and produce the results of a shutdown test.

Monitoring should also look beyond internal error rates. The framework treats vendor model changes, public incidents, and regulatory shifts as external signals that require scheduled attention. Ask for the record of those signals and the actions taken, not simply the latest system performance report. For transparency, select a public claim and request its evidence file. The test is not whether the statement sounds reasonable. It is whether the organization can support it.

The Signature Problem: Test Judgment, Not Clicks

The collection’s most useful challenge concerns the human review step. Its “signature problem” describes a reviewer who sees a polished answer but lacks the underlying evidence, discarded alternatives, or meaningful ability to challenge the result. Approval becomes easy; disagreement becomes burdensome. The collection proposes three questions: Can the reviewer change the available options? Can the reviewer see enough evidence to disagree? Does disagreement produce a change? 

The report identifies four metrics: approval rate, edit distance on accepted output, time spent per review, and override consequence. Together, these examine whether reviews vary meaningfully, whether edits are captured and evaluated, whether reviewers have time to examine evidence, and whether overrides lead to action.

For CCOs, the fourth metric offers an immediate starting point. The collection recommends examining the last 20 overrides in an AI-assisted process affecting financial statements, customers, or regulators and asking what changed because of each. That exercise gets beyond a completion dashboard. It connects a reviewer’s judgment to remediation, revised instructions, or an adjusted control.

The collection also recognizes the limits of universal human review at scale. It describes moving human judgment into system boundaries, evaluation criteria, exception handling, sampling, and monitoring. It preserves individual review for specified consequential situations, including irreversible outcomes and cases outside anticipated policy boundaries. The practical lesson is not to remove people from oversight. Instead, place human judgment where it can actually influence outcomes, and give reviewers the evidence, authority, expertise, and time to exercise it.

Do Not Overlook the Inference Gap

Shruti Mukherjee’s contribution extends the discussion to AI’s environmental footprint. She distinguishes model training from inference, the recurring activity of running it, and frames the issue as a governance exposure involving ownership, measurement, third-party information, and substantiated claims. Her proposed audit questions are practical: Who owns the energy and water footprint of AI use? Can the organization measure ongoing consumption? What do supplier contracts disclose? Can the company support its environmental statements?

For the CCO, the broader application is to look beyond familiar risk categories. A benefit claimed in a presentation should not become an external assurance without supporting evidence. Where information is unavailable, document the limitation and identify who is responsible for addressing it.

Practical Takeaways: Bring Evidence to the Board

Start with one material AI-assisted process rather than rewriting an enterprise-wide policy. Trace it from the approved use case through source data, output review, escalation, and final distribution. Ask control owners to produce evidence at each stage.

Next, examine the review process itself. Use the collection’s four metrics to identify where approval activity may be substituting for judgment. Follow overrides through to their consequences and assign responsibility for unresolved weaknesses.

Finally, change the board conversation. Report not only how many tools are approved or how many employees are trained, but also what testing found, which controls failed, what management changed, and which risks remain unresolved.

The board should ask whether management knows where AI is used, whether reviewers can meaningfully challenge it, and whether the organization can reconstruct and support significant actions and public claims. This is where compliance connects governance directly to business execution.

The CCO should ask an equally direct question: When someone identifies that the AI is wrong, does the organization merely record the concern, or does it learn and change? That is the difference between an AI governance program that documents approvals and one that demonstrates effective oversight.

Categories
AI Today in 5

AI Today in 5: October 28, 2026, The Anthropic Effect Edition

Welcome to AI Today in 5, the newest addition to the Compliance Podcast Network. Each day, Tom Fox will bring you 5 AI stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to AI Today in 5. All from the Compliance Podcast Network. Each day, we consider five stories from the business world on compliance, ethics, risk management, leadership, or general interest in AI.

Top AI stories include:

  1. AI and water risk management. (FinTech Global)
  2. AI for compliance automation. (Develop3D)
  3. AI helping people fix healthcare. (ChiefHealthCareExecutive)
  4. AI in healthcare needs a market. (MedCityNews)
  5. Positive vibes around Anthropic I.P.O. (NYT)

My first work of general non-fiction is now out: Deluge Before Dawn, the story of the 2025 flood in Kerr County, Texas, which killed 119 people and devastated a county. It is a story of tragedy, heartbreak, survival, and resilience.

It is available on the following sites:

Amazon.com

Stoney Creek Publishing

Barnes and Noble

Texas A&M University Press

Bookshop.org

Google.Books

Walmart

Categories
Daily Compliance News

Daily Compliance News: October 28, 2026, The Shoot the Messenger 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 in to the Daily Compliance News. All from the Compliance Podcast Network. Each day, we cover four stories from the business world, compliance, ethics, risk management, leadership, or general interest for compliance professionals.

Top stories include:

  • Florida sues climate risk modeler. (Bloomberg)
  • Head of Mexico election commission resigns over corruption allegations. (Reuters)
  • How DraftKings targets high-risk customers. (NYT)
  • Insurance analysts told to play down climate risks. (FT)

My first work of general non-fiction is now out: Deluge Before Dawn, the story of the 2025 flood in Kerr County, Texas, which killed 119 people and devastated a county. It is a story of tragedy, heartbreak, survival, and resilience.

It is available on the following sites:

Amazon.com

Stoney Creek Publishing

Barnes and Noble

Texas A&M University Press

Bookshop.org

Google.Books

Walmart

Categories
Compliance Into the Weeds

Compliance into the Weeds: Anthropic’s Board Structure – What Does it Mean for Compliance

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to explore it fully. Looking for hard-hitting compliance insights? Look no further than Compliance into the Weeds! In this episode of Compliance into the Weeds, Tom Fox and Matt Kelly discuss Anthropic’s S-1 registration statement for a forthcoming IPO, focusing on what it reveals about corporate governance and risk oversight rather than financials.

Kelly notes Anthropic has a seven-member board with three insiders (CEO Dario Amodei, Daniela Amodei, and CFO Christina Rao) and four outsiders, operating through four committees: audit, compensation, nominating/governance, and a safety and risk committee tasked with AI safety, security, and broader legal/regulatory/compliance risks. They question whether a two-member safety and risk committee, chaired by Novartis CEO Vas Narasimhan and joined by Christopher Liddell, has sufficient capacity, and note that the committee has an undisclosed written charter. They also flag uncertainties about Anthropic’s internal compliance/risk leadership and reporting filters, potential amended filings, and a five-member long-term benefit trust (one seat vacant) with influence over nominating outside directors.

Key highlights:

  • Anthropic IPO S-1 overview
  • Board size and committees
  • Risk committee staffing questions
  • CEOs talking about AI risks
  • More filings and disclosure gaps

Resources:

Matt in Radical Compliance

Tom

Instagram

Facebook

YouTube

Twitter

LinkedIn

A multi-award-winning podcast, Compliance into the Weeds, was recently named one of the Top 25 Regulatory Compliance Podcasts, Top 10 Business Law Podcasts, and Top 12 Risk Management Podcasts. Compliance into the Weeds has been awarded a Davey, Communicator, and W3 Award, all for podcast excellence.

Categories
Great Women in Compliance

Great Women in Compliance: Wired Differently: Valued Equally? Rethinking Ethics & Compliance Programs for Our Neurodivergent Workforce

Wired Differently, Valued Equally?

How inclusive are our Ethics & Compliance Programs really?

With an estimated 15 to 20% of the workforce neurodivergent, reaching these employees in ways that matter to them is key to an effective Ethics & Compliance Program.

Hosts Lisa Fine and Ellen M. Hunt welcome Nicole Di Schino and Megan Zwiebel to a roundtable discussion on how we should think about Ethics & Compliance Programs for our neurodivergent workforce. They explored how organizations can make compliance training, speak-up channels, and investigations more accessible to neurodivergent employees.

They also talked about how these workers may be more vulnerable to being labeled a performance problem and subject to bullying when what might really be going on is that they just work differently than others.

Discover practical ways to reduce barriers, recognize subtle workplace bullying, improve investigative fairness, and build a more effective Ethics & Compliance Program that works for everyone—not just those who think, learn, and communicate the same way.

Categories
Blog

The Missing Link in Compliance: Building an Effective Advice Function

In a best-practices compliance program, a policy explains the rules. Training can introduce the risks. But when an employee faces an unfamiliar request, they still need to know what to do now, before making a commitment that changes everything. The question may arrive while a customer waits, a payment is pending, or a team prepares to launch a product. At that moment, “please consult the policy” may identify a resource without resolving the decision. Compliance should equip people before they improvise, not merely evaluate their improvisation afterward.

Your corporate compliance function should routinely advise employees on all compliance-related issues. But when did you last evaluate this ‘advice function’ as part of the compliance program? Training should help employees recognize when a question exists. Guidance should help resolve it in the actual circumstances.

A mature design therefore asks where important decisions occur, who needs help, and how quickly your compliance function can respond. A small company may use a straightforward contact arrangement with clear backups. A larger organization may need specialist routing across functions and time zones to ensure complete coverage. Neither should depend entirely on employees knowing the right person personally.

Make the route visible in the workflow where the question arises. An approval screen, travel process, vendor request, or data-sharing step can direct the user to the right assistance without requiring a search of the entire intranet.

The Corporate Translation: A Question Before the Commitment

Consider a hypothetical business development team preparing an important demonstration. An external platform could make the presentation more compelling. A team member suggests uploading records from an existing customer so the demonstration reflects real business conditions. The deadline is tomorrow. The platform has not been reviewed for that use.

One employee remembers the company’s data-handling training but is unsure whether a limited demonstration falls within the existing rules. The employee needs an answer before the upload, not a general reminder the following week. A useful response identifies the immediate boundary, the facts requiring review, and a workable alternative. For example, the adviser may explain that company policy requires pausing the proposed upload while the team uses approved synthetic demonstration data.

The commercial objective continues through an authorized route. The unresolved platform assessment remains a separate task with an owner. That is preventive compliance: reducing uncertainty while there is still an opportunity to choose a better course.

Distinguish Advice, Approval, and Reporting

Employees should not have to understand the company’s organizational structure before asking for help. But the company must distinguish what happens after the question arrives. Compliance advice and counseling explain expectations and possible courses of action. Approval authorizes a defined activity within delegated authority. Reporting communicates a concern that may require assessment or investigation. One conversation can involve all three. It should not silently substitute one for another.

In the demonstration example, explaining the synthetic-data option does not approve the external platform for unrestricted use. A security assessment may inform the decision without completing a contractual review. A disclosure that records have already been uploaded requires a different response than a prospective question. State the status clearly. Identify what is authorized, what is prohibited under the applicable requirements, what remains unresolved, and who owns the next decision. Do not describe every advice request as a suspected violation. At the same time, do not leave credible allegations in an informal advice queue because the original employee selected the wrong category.

Ask for the Facts That Change the Answer

A useful intake process gathers enough information to understand the decision without unnecessarily complicating the request. Ask what the employee proposes to do, which parties are involved, what has already happened, and when the next irreversible step occurs. Identify the relevant information, payment, benefit, representation, or commitment.

Then ask what could change the answer. In our hypothetical, that may include the type of records, existing permissions, platform terms, intended audience, and whether the information would remain stored afterward. Let the employee say a fact is unknown. An intake form should not force a confident answer where none exists.

A compliance professional should avoid collecting unrelated personal information or demanding a full investigation before providing preliminary guidance. Begin with a safe interim direction where appropriate, then assign the additional review. But a compliance professional should also test the claimed deadline. Some deadlines reflect genuine operational needs. Others reflect a late request or an assumption that nobody can change the schedule.

Make the Response Usable

Your employee needs a response they can act on, not one they can only admire for its precision. Explain the concern in business terms. Identify the action that may proceed and the action that must wait—state any conditions, the responsible decision-maker, and what new facts would require reconsideration. In our hypothetical, a practical response might confirm an approved demonstration method, identify the owner of the external-platform review, and explain that permission for the demonstration does not authorize later customer-data uploads.

Preserve the reasoning proportionately. A brief written answer may be enough for a straightforward question. A consequential decision may require a fuller record and formal approval. Do not use conditional language that nobody owns. “Proceed once all requirements are satisfied” is incomplete unless someone knows which requirements apply and who verifies completion. Yes, you knew I would slip in Document Document Document at some point.

Give Advisers Authority and Reliable Backup

A corporate compliance function needs authority, access, and resources to influence decisions before risk is accepted. Timely advice is one way to operationalize that independence. A compliance professional should know when it can answer directly and when another function must decide. Give advisers escalation routes for unresolved legal, technical, operational, and commercial questions.

Provide backup for absence and specialist coverage. A program that relies on one expert to answer every urgent message recreates key-person risk. Define what happens when business and compliance disagree. Preserve the competing assessments and route them to the authorized decision-maker. Do not allow repeated requests to different advisers to produce an undocumented approval search.

Maintain an appropriate record of previous advice so that the next adviser can see the relevant history. Restrict sensitive information and involve counsel when legal privilege or other protections may apply; do not promise protections the process cannot guarantee. Employees should be able to trust the service without being told that every conversation is secret or every answer is final.

Measure Helpfulness, Not Just Response Speed

A fast acknowledgment is useful. It is not the same as a resolved question. Measure time to an actionable response, time to final resolution, and reasons for delay. Separate time spent waiting for missing information from time lost because the request had no owner.

Review whether employees understood the answer and followed the approved path. Sample a small number of completed requests and compare the guidance with the subsequent transaction or activity. Also look for unnecessary complexity. If routine questions repeatedly require several functions to restate the same policy, clarify the process rather than celebrating the volume of collaboration.

The 2024 Evaluation of Corporate Compliance Programs asks whether employees know when to seek compliance advice, how to do so, and whether they are willing to do so. Availability alone does not answer either question. Use feedback carefully. Satisfaction is relevant, but a correct refusal may disappoint the requester. Conversely, a popular answer may be insufficiently supported. Assess the reasoning, the clarity of the next step, and the result. Speed belongs in that assessment but should not dominate it.

Managers Determine Whether Asking Feels Practical

Imagine an employee using the advice service correctly, only to hear from their manager that the question should never have been raised. The channel exists. The local message defeats it. A culture of speaking up exists only if it’s matched by a culture of listening up.

Managers should model asking early, providing necessary facts, and responding constructively when the answer changes the plan. Include those behaviors in manager training and leadership expectations, and evaluate them through real examples. Give teams protected time for review. A manager cannot repeatedly create last-minute commitments and then treat the resulting control discussion as evidence that compliance is slow.

Equally, compliance should examine its own delays. An inaccessible or inconsistent service should not place the burden of its design failures on the employee. Train managers to receive uncertainty without demanding an immediate conclusion. “Let us establish the facts before we commit” is a useful leadership response. Where concerns involve the manager, provide another route. Advice should not require the permission of the person whose instruction is being questioned.

Turn Repeated Questions into Better Design

An advice log can reveal where policies, training, and workflows leave employees uncertain. Repeated questions about one approval may indicate vague or imprecise instructions or even an unclear policy. Questions arriving after commitments may indicate that the control sits too late in the process. Different answers to the same facts may indicate that advisers need alignment. Treat those patterns as hypotheses to investigate, not conclusions to impose.

NIST SP 800-50 Revision 1 approaches cybersecurity and privacy learning through audience needs, behavior change, evaluation, and improvement. Applying that learning-cycle logic to compliance guidance can help connect recurring questions with targeted program changes. For the demonstration team, a useful improvement might be an approved dataset library and a clear route for reviewing external tools. That would address the underlying business need rather than simply repeat the prohibition. Test the revision with the people performing the work. Can they find the approved materials? Do the materials meet the legitimate purpose? Do they know when a different use needs review?

The Compliance Takeaway

The bottom line for a compliance professional is to recognize the situation, explain the issue, provide usable help, and do so before the critical encounter. For companies, that means making advice available where decisions happen. It means clear ownership, appropriate expertise, reliable escalation, and answers that distinguish permission from unresolved questions.

The business should not need a heroic employee to find the one person who understands the issue. Nor should compliance require a crisis before it becomes accessible.

Return to the demonstration. The employee asked before uploading the records. The adviser identified a responsible alternative. The team continued its work without treating the deadline as permission to ignore the concern. That is the result to design for.

The best time to explain the antidote is before someone needs to recover from the exposure.