In today’s edition of Sunday Book Review:
- Mengele by David Marwell
- The Enlightenment That Failed by David Israel
- Machiavelli By Patrick Boucheron
- The Impossible First by Colin O’Brady
The role of the compliance professional and the compliance function in a corporation has steadily grown in stature and prestige over the years. When it came to the corporate compliance function, 2012 FCPA Guidance, under Hallmark Three of the Ten Hallmarks of an Effective Compliance Program, simply noted the government would “consider whether the company devoted adequate staffing and resources to the compliance program given the size, structure, and risk profile of the business.”
This Hallmark was significantly expanded in both the 2019 Guidance and the FCPA Corporate Enforcement Policy. And in so doing, the DOJ has increased the prestige, authority and role of both the corporate compliance function. The 2019 Guidance has four general areas of inquiry around the corporate compliance function. (1) What is the seniority and stature of the compliance function within an organization? (2) What are the experience and stature of the compliance personnel with an organization? (3) What is the funding and resources made available to the compliance function? (4) How much autonomy does the compliance function have to report to the Board of Directors?
Three key takeaways:
- How is compliance treated in the budget process?
- Has your compliance function had any decisions over-ridden by senior management?
- Beware outsourcing of compliance as any such contractor must have access to company documents and personnel.
In today’s edition of the Daily Compliance News:
- Goldman Sachs demands more diverse BODs. (NYT)
- Yet another guilty plea in PetroEcuador FCPA case. (DOJ Press Release)
- US starts secondary boycott of Iran. (WSJ)
- Former Wells Fargo CEO and other top execs banned for life. (Washington Post)
The role of the CCO has steadily grown in stature and prestige over the years. In the 2012 FCPA Guidance, under Hallmark Three of the Ten Hallmarks of an Effective Compliance Program, it focused on the whether the CCO held senior management status and had a direct reporting line to the Board; stating:
In appraising a compliance program, DOJ and SEC also consider whether a company has assigned responsibility for the oversight and implementation of a company’s compliance program to one or more specific senior executives within an organization. Those individuals must have appropriate authority within the organization, adequate autonomy from management, and sufficient resources to ensure that the company’s compliance program is implemented effectively. Adequate autonomy generally includes direct access to an organization’s governing authority, such as the board of directors and committees of the board of directors.
This Hallmark was significantly expanded in both the 2019 Guidance and the FCPA Corporate Enforcement Policy. And in so doing, the DOJ has increased the prestige, authority and role of both the CCO and corporate compliance function. The 2019 Guidance has four general areas of inquiry around the CCO and corporate compliance function. (1) How does the CCO salary and stature within the organization compare to other senior executives within the company. (2) What are the experience and stature of the CCO with an organization? Does the CCO have appropriate training for the role? (3) How much autonomy does the CCO have to report to the Board of Directors? How often do the CCO meet with directors? Are members of the senior management present for these meetings with the Board of Directors or of the Audit Committee? (4) Is the compliance function run by a designated chief compliance officer, or another executive within the company, and does that person have other roles within the company?
Three key takeaways:
- How can you show the CCO really has a seat at the senior executive table?
- What are the professional qualifications of your CCO?
- Does your CCO have true independence to report directly to the Board of Directors?
We have been getting accountability all wrong in the compliance profession. It’s not a set of tasks – it’s a way of thinking and it has to come from the heart as well as the head. On Accountability: The Heart of Compliance Tom Fox and Sam Silverstein dig into what accountability means to the corporate compliance function and business organizations and most significantly, how to make it an integral part of your culture. In this episode Sam and I begin a three-part series to consider the current disaster Boeing finds itself in from the accountability perspective and what it might do to crawl out of the deep hole it finds itself in. In this Part 1, we consider accountability from employees to their fellow employees and up towards management. Some of the highlights include:
· What is an employee’s commitment to values in an organization? What are your Foundational Values? Your Relational Values? Your Professional Values? Your Community Values?
· How employees commit to ‘it’s all of us’ so that all employees rise or fall together?
· Is bringing in a new CEO enough or must an organization do more?
· What is an employee’s commitment to a good reputation? How do you get alignment in word and deed to commit to accountability?
For more information on Sam Silverstein and his work on accountability, click here.
Will another Kleptocrat lose ill-gotten gains? Jay and I are back to consider some of the top compliance articles and stories which caught our eye this week. We give some final thoughts on the Astros sign stealing scandal, at least until the MLB Report on the Red Sox comes out.
- Africa’s richest woman, Isabel Dos Santos, accused of massive looting of Angola during her father’s reign. US companies under scrutiny for facilitating her looting, Michael Forsythe, Kyra Gurney, Scilla Alecci and Ben Hallman in the NYT. Her own bank fires her as a customer, Michael Forsythe in the NYT. PwC CEO warns ‘heads may roll’ over the firm’s work for Isabel Dos Santos, Larry Elliott and Graeme Wearden in Davos, and Juliette Garside in The Guardian.
- Tom wraps up his multipart series on the Astros sign stealing scandal; Part 4-The Truth of the Game, Part 5-the Whistleblower and Amensty and Part 6-the Scarlet C. Tom and Matt take a deep dive in this week’s Compliance into the Weeds.
- Mike Volkov takes a look at the year in OFAC enforcement. Part 1 and Part 2.
- How can you use the Benczkowski Memo internally? Jay explores in his CCI
- Latest Edleman Report shows trust going down. Matt Kelly explores in Radical Compliance.
- How does the DOJ draft new policies? Clara Hudson reports on Matthew Miner speech in GIR.
- Five men indicted in massive crypto-currency scheme. Jonathan Marks on the lessons learned in his Board and Fraud
- Lawyers from Skadden Arps compare and contrast UK and French guidance on cooperation. In NYU’s Compliance and Enforcement Blog.
- Was the SFO’s internal guidance a missed opportunity? Aziz Rahmen thinks so, in the FCPA Blog.
- On the Compliance Podcast Network, Tom continues his 31 Days to a More Effective Compliance Program series. 31 Days to a More Effective Compliance Program now has its own iTunes channel. If you want to binge out and listen to only these episodes, click here.
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.
In today’s edition of the Daily Compliance News:
- Angola: Where did all the money go? A 5-part series. (TheAfricaReport)
- The biggest tax scam ever? (NYT)
- How compliance can create better corporate culture. (WSJ)
- Harvard and Texas A&M in spat of article on health effects of eating red meat. (Houston Chronicle)
Cailyn and Amanda talk about the very basic tools for effective compliance management.
Listen to the episode:
Check out more episodes and full episode videos at ComplianceLine.com, and don’t forget to subscribe on your favorite podcast platform!
One of the critical elements found in the 2019 Guidance is the need to use the information you obtain, whether through risk assessment, root cause analysis, investigation, hotline report or any other manner to remediate the situation which allowed it to arise. It stated:
Evolving Updates – How often has the company updated its risk assessments and reviewed its compliance policies, procedures, and practices? Has the company undertaken a gap analysis to determine if particular areas of risk are not sufficiently addressed in its policies, controls, or training? What steps has the company taken to determine whether policies/procedures/practices make sense for particular business segments/subsidiaries?
Your company should establish a regular monitoring system to spot issues and address them. Effective monitoring means applying a consistent set of protocols, checks, and controls tailored to your company’s risks to detect and remediate compliance problems on an ongoing basis. To address this, your compliance team should be checking in routinely with local finance departments in your foreign offices to ask if they have noticed recent accounting irregularities. Regional directors should be required to keep tabs on potential improper activity in the countries in which they manage. These ongoing efforts demonstrate that your company is serious about compliance.
Three key takeaways:
- Innovation can come through a new way to think about and use data going forward.
- Have a plan in place to use the information garnered in your monitoring incorporated back into your compliance program.
- Always remember that Document Document Document is critical if the regulators come knocking.
Who needs more drama in their life? Anybody? Nobody! There is an upside to conflict, though. If you, or if people on your team, are dealing with conflict…it is possible to eliminate the conflict and come out with a stronger, better relationship – if you handle it correctly! As a leader, it is your responsibility to successfully navigate conflict and help your team to do the same.
In today’s episode we are digging into a how one top-recognized leader, Chris, uses an old school theory to help him and his team successfully navigate conflict. Chris and I are both millennials. But, no matter how young, how cool, how old, how smart you are…there are some things we will always be able to learn from the people who went before us.
We are discussing the Transactional Analysis theory developed in the mid 1900’s. This theory helps leaders understand why their people might think, act, and feel the way they do.
We’re going to walk you through how you can use this information to help in the trenches at work. Let’s dig in –it’s time to LEVEL UP!
———-
If you’re looking for tangible action steps and refreshing insights to help ignite the power of your own leadership journey, sign up for my weekly leadership blog HERE.
If your business would benefit from higher-performing leaders, check out more information about the comprehensive leadership development training I do HERE.
If you want to reach out to me directly, email alyson@vanhooser.com.
If you enjoyed this episode, will you please subscribe and leave a review? Your reviews help this show get discovered by more incredible leaders just like you. I’m obsessed with helping leaders ignite their performance results and I’d love to have you help me make an impact! Thank you so much!
P.S. Share and tag me on social — @AlysonVanHooser — and I’ll share your comments and big takeaways on my feed!