Tag: Board of Directors

Categories
Great Women in Compliance

Great Women in Compliance: Bets Lillo on Compliance and Boards of Directors

Welcome to the Great Women in Compliance Podcast. In this episode, Lisa Fine visits with Bets Lillo about her experience on a corporate Board of Directors and how to utilize an ethics and compliance background to maximize your opportunities to serve on a Board of Directors.

Bets is an engineer and corporate executive with a rich background in sales, technology, finance, operations, and M&A. She is a recognized expert in risk management. She brings a unique perspective on the role and value of compliance professionals in enterprise transformation, believing that they can bring extraordinary value to boards due to their broad understanding of business operations. She emphasizes the importance of compliance professionals being effective because of their experience in an influence and collaboration context, as they focus on being creative, recognizing ethical decision-making, and reducing risk. She also encourages compliance professionals to enhance their qualifications by obtaining a board certification from a credible organization. Join Lisa Fine and Bets Lillo on this episode of the Great Women in Compliance podcast for her insights into how to become a viable candidate for board service and how to succeed in that role.

Key Highlights:

  • Maintaining Operations and Compliance During Transformation
  • The Strategic Value of Compliance Professionals
  • Elevating Compliance Professionals on Board: Expert Listeners and Observers
  • Building Relationships for Board Opportunities
  • Transitioning to Corporate Boards through Nonprofit Experience

Resources:

Join the Great Women in Compliance community on LinkedIn here.

Categories
Everything Compliance

Everything Compliance – Episode 127, The Awesome Edition

Welcome to the only roundtable podcast in compliance as we celebrate our second century of shows. In this episode, we have the quartet of Jonathan Armstrong, Matt Kelly, and Jay Rosen, all hosted by Tom Fox, joining us on this episode to discuss some of the topics they are watching in 2024.

  1. Matt Kelly looks at the recently enacted Foreign Extortion Prevention Act (FEPA). He rants about the SEC getting hacked around the Bitcoin ETF announcement and reminds everyone to use two-factor authentication.
  2. Tom Fox shouts out to the University of Michigan for winning the College Football National Championship.
  1. Jonathan Armstrong looks at the intersection of AI and Operational Resilience and ties it to the need for greater Board skills in these areas. He shouts out to Jay Rosen, who is in transition and would be a great addition to any compliance product or service BD team.
  1. Jay Rosen opines on the DOJ’s Expectations for Data Driven Analytics in 2024. He shouts out to Robert Kraft and the New England Patriots for paying departing coach Bill Belichick his full 2024 salary.
  1. Jonathan Marks asks, What does it mean to be on a Board in 2024? He rants about the Philadelphia Eagles.

The members of the Everything Compliance are:

  • Jay Rosen – Jay is Vice President, Business Development, Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Karen Woody – One of the top academic experts on the SEC. Woody can be reached at kwoody@wlu.edu
  • Matt Kelly – Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong – is our UK colleague, who is an experienced data privacy/data protection lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com
  • Jonathan Marks can be reached at jtmarks@gmail.com.

The host, producer, ranter (and sometimes panelist) of Everything Compliance is Tom Fox, the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.

For more information on Ethico and a free White Paper on top compliance issues in 2024, click here.

Categories
2 Gurus Talk Compliance

2 Gurus Talk Compliance – Welcome to 2024 Edition

What happens when two top compliance commentators get together? They talk about compliance, of course. Join Tom Fox and Kristy Grant-Hart in 2 Gurus Talk Compliance as they discuss the latest compliance issues in this week’s episode! In this episode, Tom and Kristy take on a wide variety of topics, including the self-improvement of the Florida Man gone astray.

In the ever-evolving world of regulatory compliance and risk management, challenges are constant, and strategies must be dynamic. Tom highlights the SFO, culture assessments, Key Board issues for 2024 and the McDonald’s Doctrine. Kristy highlights the new law, FEPA, Supply Chains, AI, and checks in on Florida Man. Join Tom Fox and Kristy Grant-Hart as they delve deeper into these issues in this episode of the 2 Gurus Talk Compliance podcast.

Highlights Include:

  1. U.S. Prosecutors Can Charge Foreign Officials With Bribery Under New Provision (WSJ)
  2. New Actions from the White House Highlight the Difficulty of Tracing Forced Labor in Supply Chains (Supply Chain Brain Blog)
  3. Maryland looks to harness AI for government use with executive order (Washington Post)
  4. WorkLife’s definitive guide to what’s in and out for 2024 (WorkLife)
  5. Analysis of failure to exercise duty of oversight by a corporate officer. (D&O Diary)
  6. Key Board issues for 2024. (Compliance and Enforcement)
  7. Are emojis evil? (FCPA Blog)
  8. SFO hammered in the ENRC report. (WSJ)
  9. Why do you need to do a culture assessment? (CCI)
  10. Florida woman sues Hershey for $5 million over ‘deceptive’ Reese’s packaging (ABC News)

 Resources:

Kristy Grant-Hart on LinkedIn

Spark Consulting

Tom

Instagram

Facebook

YouTube

Twitter

LinkedIn

For more information on Ethico and a free White Paper on top compliance issues in 2024, click here.

Categories
Innovation in Compliance

Compliance Professionals Adapting to Change: Industries, Regulations, and Beyond: Part 3 – Jessica Czeczuga on the Role of a Board of Directors in Training and Communications

Welcome to a special series sponsored by Diligent, where we look down the road at key issues in 2024 and beyond. In this series, I will visit with Nicholas Latham, Renee Murphy, Jessica Czeczuga, Yee Chow, and Alexander Cotoia. Over this series, we will consider compliant communications in regulated industries, managing conflicts of interest at the Board level, the Board’s role in compliance training and communications, navigating the current ESG landscape, and professional growth and mentorship in compliance. In Part 3, we review the role of a Board of Directors in compliance training and communications with Jessica Czeczuga.

Jessica Czeczuga is a seasoned corporate training and compliance professional, currently serving as the Principal Instructional Designer at Diligent. Jessica’s perspective on the importance of Board oversight in corporate training and compliance is shaped by her extensive experience and deep understanding of compliance programs. She emphasizes the crucial role of the Board in setting the tone for the organization’s culture, advocating for active communication from the Board about the importance of training to all employees. Jessica also suggests that the Board should be more significant in discussions about your organization’s compliance efforts, ensuring it meets its stated commitments. She views the Board as another group within the organization that requires tailored training and active involvement in promoting a culture of compliance. Join Tom Fox and Jessica Czeczuga as they delve deeper into this topic.

Key Highlights:

  • Driving Compliance and Training Messaging
  • Fostering Alignment Through Board Involvement
  • Assessing the Impact of Multinational Training

Ready for Purpose-Driven Compliance? Diligent equips leaders with the tools to build, monitor, and maintain an open, transparent ethics and compliance culture. For more information and to book a demo, visit Diligent.com

Join us tomorrow as we consider navigating the current ESG landscape.

Categories
Innovation in Compliance

Compliance Professionals Adapting to Change: Industries, Regulations, and Beyond: Part 2 – Renee Murphy on Managing Conflicts at the Board

Welcome to a special series sponsored by Diligent, where we look down the road at key issues in 2024 and beyond. In this series, I will visit with Nicholas Latham, Renee Murphy, Jessica Czeczuga, Yee Chow, and Alexander Cotoia. Over this series, we will consider compliant communications in regulated industries, managing conflicts of interest at the Board level, the Board’s role in compliance training and communications, navigating the current ESG landscape, and professional growth and mentorship in compliance. Part 2 considers how an organization can manage conflicts of interest with Renee Murphy on the Board of Directors.

Renee Murphy has a rich compliance, governance, and risk management background. Having served as both an internal and external auditor and currently the Chief Evangelist of Diligent, she brings a unique perspective to managing board-level conflicts of interest and implementing ESG practices. Renee believes that conflicts of interest at the board level can have serious implications and emphasizes the importance of identifying and addressing these conflicts to prevent financial misconduct. She also advocates that boards prioritize disclosing their ESG practices and carbon emissions, as stakeholders will increasingly demand this. Her expertise and insights are shaped by her diverse experiences, including her role as a lead analyst at Forrester Research and her work with Fortune 500 companies. Join Tom Fox and Renee Murphy as they delve deeper into these topics on the next episode of the Diligent Podcast.

Key Highlights:

  • Board Members Sitting on Multiple Boards
  • Conflicts of Interest at the Board Level
  • ESG Reporting for Long-Term Risk Management
  • The Role of Compliance in Board Governance

Ready for Purpose-Driven Compliance? Diligent equips leaders with the tools to build, monitor, and maintain an open, transparent ethics and compliance culture. For more information and to book a demo, visit Diligent.com

Join us tomorrow as we consider the role of the Board of Directors in compliance training, messaging, and communications.

Categories
Blog

Renee Murphy on Risks and Consequences of Board Level Conflicts of Interest

I recently had the opportunity to visit with folks from Diligent. We look down the road at key issues in 2024 in a podcast series sponsored by Diligent entitled Compliance Professionals Adapting to Change: Industries, Regulations, and Beyond. I could chat with Nicholas Latham, Renee Murphy, Jessica Czeczuga, Yee Chow, and Alexander Cotoia. Over this series, we discussed compliance communications in regulated industries, managing conflicts of interest at the Board level, the Board’s role in compliance training and communications, navigating the current ESG landscape, and professional growth and mentorship in compliance. In this Post 2, we discuss the conflicts of interest at the Board of Directors and the Board’s role at the ESG level with Renee Murphy.

Conflicts of interest at the board level can have serious implications for companies, requiring careful management and proactive measures to ensure ethical functioning. Board-level conflicts of interest can arise when board members sit on multiple boards or engage in self-dealing. These conflicts can lead to questions of fairness and potential harm to the company. For example, a CEO whose time is divided among multiple companies may not be able to provide fair attention to each organization, creating a conflict of interest for shareholders. Additionally, self-dealing at the board level, such as funneling company funds to entities owned by board members, can harm the company’s financial health.

To mitigate these conflicts, board members should establish clear boundaries and implement board management software for transparency and accountability. This software enables effective communication and decision-making, allowing boards to address conflicts promptly and ensure ethical operations. Compliance and risk management officials play a vital role in board governance by providing the board with an understanding of legal and regulatory risks and preventing conflicts of interest. These officials enable efficient risk management and compliance processes by utilizing governance software.

The implementation of ESG practices is another crucial aspect of board governance. ESG considers environmental, social, and governance factors in business operations. Companies are advised to select a framework and start disclosing their ESG information. Failure to do so can hinder access to capital and affect long-term risk management. While ESG practices are not currently mandated by the SEC, they are increasingly demanded by banks, customers, and third parties. Therefore, companies have no choice but to disclose their ESG practices to meet stakeholder expectations.

Balancing board-level conflicts of interest and ESG practices involves tradeoffs and challenges. On one hand, addressing conflicts of interest requires strict oversight and accountability to ensure fair decision-making. On the other hand, implementing ESG practices requires companies to consider their environmental and social impact, which may involve additional costs and changes to existing operations. Finding the right balance between these factors is crucial for organizations to maintain ethical operations while meeting stakeholder expectations.

The importance of considering the impact on decision-making cannot be overstated. Conflicts of interest and the lack of ESG practices can lead to financial losses, reputational damage, and legal consequences. By proactively managing conflicts and implementing ESG practices, companies can enhance their long-term sustainability and mitigate risks. Compliance and risk management officials and board members play a pivotal role in ensuring that ethical considerations are prioritized in decision-making processes.

Managing board-level conflicts of interest and implementing ESG practices are critical aspects of board governance. Companies can enhance transparency, accountability, and ethical functioning by establishing clear boundaries, utilizing board management software, and disclosing ESG information. Balancing these factors involves tradeoffs and challenges, but the impact on decision-making and the long-term success of organizations cannot be ignored. With the guidance of compliance and risk management officials, boards can navigate these complexities and ensure ethical operations for the benefit of all stakeholders.

Ready for Purpose-Driven Compliance? Diligent equips leaders with the tools to build, monitor, and maintain an open, transparent ethics and compliance culture. For more information and to book a demo, visit Diligent.com

Join us tomorrow as we consider the role of the Board of Directors in compliance training and communications.

Categories
31 Days to More Effective Compliance Programs Uncategorized

One Month to More Effective Reporting and Investigations – Board Investigations

In their article, “Successful Board Investigations”, David Bayless and Tammy Albarrán, offered seven considerations to facilitate a successful Board investigation.

  • Consider whether you need independent outside counsel.
  • Consider hiring an experienced investigator to lead the internal investigation.
  • Consider the need to retain outside experts.
  • Analyze potential conflicts of interest at the outset and during the investigation.
  • Carefully evaluate whistleblower allegations.
  • Request regular updates from outside counsel, without limiting the investigation.
  • Consider whether an oral report at the conclusion of the investigation is sufficient.

The authors conclude their piece by stating, “By keeping in mind the issues addressed above, the Board will be better prepared for the investigation and readily able to exercise good judgment throughout the review. A well-conducted investigation by the Board may spare the company further disruption and costs associated with follow-on investigations by the regulators, or at the very least minimize the company’s exposure.”

Three key takeaways:

  1. Retain the right counsel. Consider conflicts and appearance.
  2. Carefully evaluate all whistleblower allegations and reject retaliation.
  3. Consider receiving oral reports on an ongoing basis and one lengthy oral report at the end of the investigation.
Categories
31 Days to More Effective Compliance Programs

One Month to More Effective Reporting and Investigations – Board Investigation Protocols

Many companies have an investigation protocol in place when a potential compliance violation or other legal issue arises. However, many Boards of Directors do not have the same rigor when it comes to an investigation, which should be conducted or led by the Board itself. The consequences of this lack of foresight can be problematic, because if a Board does handle an investigation right, the consequences to the company, its reputation and value can be quite severe. The SEC considers a variety of factors around corporate investigations including: Did management, the board or committees consisting solely of outside directors oversee the review? Did company employees or outside persons perform the review? If outside persons, have they done other work for the company?

Dan Chapman has said this is the time for a very frank conversation with your Board about what such an investigation will entail. Costs must be adequately discussed to set proper expectations. These include both direct costs and, what Chapman believes may be even more important, a discussion of indirect costs to the company. He noted, “the biggest cost to a company during an investigation is the diversion of management resources” and, as he further explained, “everything stops to focus on the investigation.” This indirect cost comes through largely the time commitment of senior management. He further explained, “if senior management has to commit 20% of their time to the investigation, that’s 20% that’s not going towards revenue generating, shareholder value protecting activities.”

Finally, Jonathan Marks has noted after notification of serious allegations, Boards should take the following steps:

• Consider creating a Special Committee to conduct the investigation;

• Establish a committee charter;

• Preserve the electronic and hardcopy documentation environment;

• Communicate with external auditors; and

• Plan potential communication with the SEC, DOJ, and the relevant stock exchange.

Marks also notes that while a special committee might be necessary in certain rare circumstances, the Board should try to avoid forming a special investigative committee to oversee the investigation if the Audit Committee is composed of independent and disinterested directors that are suited for the task. A special committee must be disbanded at some point (usually once the investigation is completed and before the restatement process begins), and the disbanding could become a complicated news item. Conversely, if the Audit Committee oversees the investigation, then, once the investigation is complete, they can pivot back to their normal role, which would include overseeing the actual restatement process. Investigations overseen by the Audit Committee also benefit from the positive relationship that the committee chair usually has with the audit partner of the company’s external auditor.

 Three key takeaways:

1. The Board should have a written protocol for investigations prepared in advance.

2. Any Board led investigation must be both credible and objective.

3. The investigation must be thorough but the Board can be cost effective.

Categories
31 Days to More Effective Compliance Programs

One Month to a More Effective Board – 20 Questions Directors Should Ask about the Board Compliance Committee

In an area of inquiry entitled Oversight, the 2023 ECCP asks three basic questions which we have explored throughout this chapter:

1. What compliance expertise has been available on the Board of Directors?

2. Have the Board of Directors held executive or private sessions with the compliance function?

3. What types of information has the Board of Directors examined in their exercise of oversight in the area in which the misconduct occurred?

To facilitate the answers to these questions, consider this list of 20 questions to reflect the oversight role of directors. These are questions the Board should ask of both senior management and the Board should ask itself. The questions are not intended to be an exact checklist, but rather a way to provide insight and stimulate discussion on the topic of compliance. The questions provide directors with a basis for critically assessing the answers they get and digging deeper as necessary. Although the questions apply to most medium to large organizations, the answers will vary according to the size, complexity and sophistication of each individual organization.

Part I: Understanding the Role and Value of the Compliance Committee

1. What are the Compliance Committee’s responsibilities and what value does it bring to the Board?

2. How can the Compliance Committee help the Board enhance its relationship with management?

3. What is the role of the Compliance Committee?

Part II: Building an Effective Compliance Committee

4. What skill sets does the Compliance Committee require?

5. Who should sit on the Compliance Committee?

6. Who should chair the Compliance Committee?

Part III: Directed to the Board

7. What is the Compliance Committee’s role in building an effective compliance program within the company? How can the Compliance Committee assess potential members and senior leaders of the company’s compliance program?

8. How long should directors serve on the Compliance Committee?

9. How can the Compliance Committee assist directors in retiring from the Board?

Part IV: Enhancing the Board’s Performance Effectiveness

10. How can the Compliance Committee assist in director development?

11. How can the Compliance Committee help the Board chair sharpen the Board’s overall performance focus?

12. What is the Compliance Committee’s role in Board evaluation and feedback?

13. What should the Compliance Committee do if a director is not performing or not interacting effectively with other directors?

14. Should the Compliance Committee have a role in chair succession?

15. How can the Compliance Committee help the Board keep its mandates, policies and practices up-to-date?

Part V: Merging Roles of the Compliance Committee

16. How can the Compliance Committee enhance the Board’s relationship with institutional shareholders and other stakeholders?

17. What is the Compliance Committee role in CCO succession?

18. How can the Compliance Committee foster great technical impact for compliance function?

19. What role can the Compliance Committee play in preparing for a crisis, such as the discovery of a sign of a significant compliance violation?

20. How can the Compliance Committee help the Board in deciding CCO pay, bonus and resources made available to the corporate compliance function?

 Three key takeaways:

1. The DOJ Evaluation requires active Board of Director engagement around compliance.

2. Board communication on compliance is a two-way street; both inbound and outbound.

3. Has the Board built an effective Compliance Committee for itself?

Categories
Compliance Into the Weeds

Compliance into the Weeds: What is Driving Compliance Engagement at the Board?

The award-winning, Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, going into the weeds to explore a subject more fully and looking for some hard-hitting insights on sanctions compliance. Look no further than Compliance into the Weeds!

In this episode, co-hosts Tom Fox and Matt Kelly dissect the Navex 2023 State of Risk and Compliance Report. Tom and Matt delve into Navex’s annual benchmarking report, which surveyed 1,300 compliance professionals. The report revealed that 53% of respondents described their compliance programs as mature. Matt and Tom question whether the board is driving the conversation or if compliance officers request updates due to potential liability. The report’s findings on cybersecurity and privacy concerns, survey results on where compliance should reside in a company, and the importance of having a mature anti-bribery anti-corruption compliance program are all discussed. Tune in to hear more about how compliance officers can address pressing concerns such as cybersecurity breaches and attacks.

Key Highlights:

  • Navex’s benchmark report on compliance programs
  • Board-Compliance Officer Relationship & Cybersecurity in Compliance
  • The necessity of Dedicated Compliance Committees
  • Survey Finds Diverse Views on Compliance Placement in Companies
  • The Importance of Anti-Bribery Compliance for Cybersecurity
  • Compliance Officer Reporting to CISO Dynamics

 Resources:

Matt 

LinkedIn

Blog Post in Radical Compliance

Tom 

Instagram

Facebook

YouTube

Twitter

LinkedIn