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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program Through Innovation: Day 1 – Originating a Compliance Ecosystem

The compliance profession is at an inflection point, moving away from the lawyer-driven written policies and procedures to a more operationalized regime where compliance is a part of the overall ecosystem embedded directly in the business process-focused discipline. Seen in this manner, compliance will be seen not as a cost center but as a value creation center, helping the company to make business processes more efficient and then more profitable. To be the orchestrator and prime mover of a compliance ecosystem, you need a superior compliance service that is hard to replicate. This means some combination of compliance, an extensive network of internal users, and strong branding.

Compliance is undergoing a paradigm shift as a result of technological and digital innovation. CCOs who cannot interpret the data from their systems will likely find themselves consigned to the dustbin of corporate luddites. Compliance will be moving into a new era of collaboration and connection to more fully operationalize compliance to make all business stakeholders more efficient and more profitable.

Three Key Takeaways:

  1. Compliance is undergoing a paradigm shift as a result of technological and digital innovation.
  2. To be the orchestrator and prime mover of a compliance ecosystem, you need a superior service that is hard to replicate.
  3. Compliance should help other corporate functions.

For more information, check out The Compliance Handbook, 4th edition, here.

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31 Days to More Effective Compliance Programs

One Month to Better Reporting and Investigations – Selection of Investigative Counsel

Dan Dunne, in a Compliance and Ethics Professional article, entitled “Foxes and henhouses: The importance of independent counsel”, discussed what he termed a “critical element” in any investigation, which he denominated as “fair and objective evaluation.” Dunne wrote that a key component of this fair and objective evaluation is the Who question: who should supervise the investigation and who should handle the study? Dunne’s clear conclusion is that independent counsel should handle any serious investigation.

There are three reasons for a company to retain independent counsel for internal investigations of severe whistleblower complaints. First, André Agassi was right, perception is reality. Secondly, if regular outside counsel investigates their own prior legal work or legal advice, a very large and potentially messy number of loyalty and privilege issues can arise in the internal investigation. The third reason is the relationship of the regular outside counsel or law firm with regulatory authorities. If a company’s regular outside counsel performs the internal investigation and the results turn out favorably for the company, the regulators may ask if the investigation was a whitewash or at the very least, less than robust. If the SEC or DOJ cannot rely on a company’s own internal investigation, it may perform the investigation all over again with its own personnel. Further, these regulators may believe that the company, and its law firm, have engaged in a cover-up. This is certainly not the way to buy credibility.
Three key takeaways:

  1. Serious allegations demand a serious response, with seriously good lawyers leading the investigation.
  2. Credibility is the biggest thing that any person or company brings to the table when sitting across from the DOJ or SEC.
  3. The use of regular corporate counsel can negatively impact your investigation because of the issues of loyalty and privilege.

For more information, check out The Compliance Handbook, 4th edition.