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 Katie Smith who is the Vice President for Ethics at Assurance. She previously served as Assistant Vice President and Chief Ethics Officer for USAA and Executive Vice President and Chief Compliance and Ethics Officer at Convercent.
Katie is passionate about compliance, having worked in the field for 20 years, building high-performing teams and increasing employee engagement by up to 300%. She has proven expertise in building and promoting talent, creating a trust-based culture, anti-corruption, code of conduct, conflict of interest, marketing internal programs, training and awareness, investigation excellence, data privacy and process efficiency. She is a much sought after public speaker and contributor featured in Wall Street Journal, Time, Fortune, NBC and Compliance Week. Katie’s commitment to the compliance profession is well as she currently sits on the Board of Directors of the Ethics and Compliance Initiative (ECI).
In this second episode, we take up the some of the skills, tasks and roles that Katie used in her CCO/CECO roles. She discusses how the compliance profession and compliance professionals have evolved over the past two decades. We move into some of the challenges Ethics and Compliance functions face in the Covid-19 world. We conclude with some of Katie’s thoughts on how persons just getting into the compliance field can garner mentors.
Tom Fox welcomes Simon Moss to this week’s show. Simon – who describes his background as “eclectic”, having worked in and led many companies over his career, including IBM – is now the CEO of Ayasdi, one of the most innovative companies in the artificial intelligence space. Simon and Tom discuss the important work Ayasdi is doing for its clients.
The Data Problem
Tom asks why AI can’t seem to keep up with the volume of data that needs to be reviewed for AML, ABC and trade sanctions. Simon disagrees that it’s an issue of volume. The problem is diversity and distribution. He says, “The problem with data now is that it is so diverse, so distributed, and we’re still trying to deploy products of extraordinary innovation – including AI products – in the same ways as we did in the 1970s.” He laments that we try to homogenize data into a construct, which uses 80% of our data management resources. “We have institutionalized redundancy in data management, and it is getting worse because of the proliferation of data sources.” While this structure works for data at rest, it is unsuitable for unstructured data and data in use.
A Unique Approach
“We don’t use the data model approach,” Simon remarks. Ayasdi believes that a company is represented in its data, so they create a model that is unique to each client. “…it knocks 40 to 50% off the time to actually deploy innovation,” he says. He explains why machine learning cannot effectively predict or discover crime or compliance issues. “Hypothesis-based machine learning is brilliant for finding a needle in a haystack… The problem with compliance is you’re looking for a needle in a stack of needles.” Ayasdi’s approach, on the other hand, is to let the data tell the story. “The breakthrough that Ayasdi uses,” Simon says, “is what’s called unsupervised learning as part of a machine learning process. In other words, we are not going to give the software a hypothesis of what to look for. We simply say, ‘Go find interesting stuff.’ Let the data tell us the story.”
Innovating for the Future
Ayasdi is engineering the operational diligence and deployment needed for the future. It was technology that drove the blue collar transformation of the early 2000s, and it is technology that will drive the transformation of the white collar industry over the next decade. “We’re engineering our technology to make sure that we can service a customer expectation in the future,” Simon says. Tom comments, “It strikes me that the insights that could be generated [go] really far beyond the anti money laundering and fraud and corruption.” Simon agrees. He shares three examples of how Ayasdi has helped their clients gain valuable insights and profit from them. “What we’re doing is we’re creating true Alpha. We’re creating true opportunity and we’re creating true transparency. When those decisions are made, you know that the decision that has been created has all the explainability, all the referential insight that’s needed, all the appropriate data, so that when a regulator comes in and says, Why did you do this? It’s all completely supported.”
The true challenge of innovation, Simon argues, is that a solution works at scale. “The challenge is, How do you optimize the operating model of an institution? And you do that by looking at the institution as a whole.”
Resources
Ayasdi.com
Simon Moss on LinkedIn
Does the way you communicate affect whether others trust you?
Much, much more than you realize. In this #jammingwithjason episode I speak with Ann Butera about how to make changes in the way we communicate so we are exhibiting all three behaviors of trust.
You’ll be amazed at how some little things we do every day aren’t communicated to others the way we expected and are actually eroding trust, making it much more difficult for us in our work. No matter how good you think you communicate, we can all do better by incorporating Ann’s wisdom.
Imagine how much easier your life will be when you learn how to say anything to anybody.
#internalaudit #communication
Listen in at: http://www.jasonmefford.com/jammingwithjason/
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Episode 036–Charles Webb
On this episode of The Ethics Experts, Charles Webb joins Gio to discuss antitrust compliance and the Purple Promise at FedEx.
Check out more episodes, and don’t forget to subscribe on your favorite podcast platform!
In the Episode, I visit with Mike DeBernardis, Counsel and Hughes Hubbard. We take a look back at the FCPA world in Q3. It started off with a bang and never slowed down. Some of the highlights include:
- The quarter started off with a bang-Novartis US and never slowed down.
- How and why did Novartis US, First Energy in Ohio and Commonwealth Ed in Illinois change the discussion around domestic corruption?
- What were some of the key lessons from the Herbalife FCPA enforcement action? Why is it so important to obtain experienced White-Collar Counsel in a serious FCPA matter?
- What were top 3 takeaways from the release of the FCPA Resource Guide 2nd edition?
- Sargeant Marine was a rare criminal FCPA plea. What is the significance of the case?
- The Alexion SEC enforcement action in July was relatively small but had some interesting lessons. What were key takeaways from the case?
- Do you see continue aggressive FCPA enforcement by the DOJ/SEC?
- What are you telling clients about their compliance programs going into the next 12 months?
Welcome to a special five-part podcast series, The Six Elements of an Effective Compliance Program. This podcast series is sponsored by StoneTurn. To celebrate Corporate Compliance and Ethics Week, we will consider each of the six elements required for an effective compliance program. They include: Risk Assessment, Governance and Structure, Policies Procedures and Controls, Training and Education, Oversight and Reporting, and Response and Enhancements. Over this five-part podcast series, I will be joined by Stephen Martin and Valerie Charles, Partners at StoneTurn and Toby Ralston and Jamen Tyler, Managing Directors at StoneTurn. In this fifth episode, I visit with Valerie Charles on the twin topics of Oversight and Reporting: The Board’s Role in Compliance and Having a Speak Up Culture and Response and Enhancements: Continually Improving Your Compliance Program. Highlights include:
Oversight and Reporting-the Board’s Role in Compliance and Having a Speak Up Culture
- What is the relationship between whistleblowers/hotlines/internal reporting/Speak Up culture and Internal Investigations?
- 3Rd Parties are still the highest FCPA risk. How and why has Due Diligence become even more important in the era of Covid-19.
- How should a CCO educate the Board on their role within the Compliance framework?
- How does a Board walk that fine line between management and oversight?
- What types of questions should a Board be asking a CCO?
Response and Enhancements- Continually Improving Your Compliance Program
- What are some of the key elements of Third-Party Risk Management?
- In the 2020 Update, the DOJ strongly emphasized not simply oversight but continuous monitoring and continuous improvement. How can a CCO think through continuous monitoring and then using that information to improve a compliance program?
- What are some strategies for Continuous Monitoring?
- The 2020 Update mandated greater use of data by a CCO. Yet even with data, why is the human element so critical in any data-based solution?
- Root cause analysis is now a separate Hallmark of an Effective Compliance Program. How should a CCO use root cause analysis in response and enhancements?
Resources
For more information on StoneTurn, click here.
In today’s episode, we discuss the inherent challenges of operating a company in compliance with U.S. and international sanctions when the lists of sanctioned parties are a moving target.
Join us each week as we take a deep dive into the various forms of fraud across the world and discuss crime families, penny stock boiler rooms, international money launderers, narco-traffickers, oligarchs, dictators, war lords, kleptocrats and more.
Scott Moritz is a leading authority on white-collar crime, anti-corruption, and in the evaluation, design, remediation, implementation, and administration of corporate compliance programs, codes of conduct. He is also considered an authority in the establishment, training, and oversight of the investigative protocols carried out by financial intelligence, corporate security, and internal audit units.
Welcome to a special five-part podcast series, The Six Elements of an Effective Compliance Program. This podcast series is sponsored by StoneTurn. To celebrate Corporate Compliance and Ethics Week, we will consider each of the six elements required for an effective compliance program. They include: Risk Assessment, Governance and Structure, Policies Procedures and Controls, Training and Education, Oversight and Reporting, and Response and Enhancements. Over this five-part podcast series, I will be joined by Stephen Martin and Valerie Charles, Partners at StoneTurn and Toby Ralston and Jamen Tyler, Managing Directors at StoneTurn. In this fourth episode, I visit with Jamen Tyler on effectively getting your compliance messaging out. Highlights include:
- In the Work From Home era how can you determine the effectiveness of your compliance training and communications?
- In the 2020 Update, the DOJ for the first time discussed short training and communications, focusing on one issue messaging. What are some of the trends you are seeing in such micro-learning? What about other types of training?
- In terms of compliance training frequency and cadence, what are you seeing as current best practices?
- What are the advantages of compliance ambassadors across a multi-national organization? Can they be outside the compliance dept?
Resources
For more information on StoneTurn, click here.