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Compliance Tip of the Day

Compliance Tip of the Day: Skills for Compliance Professionals into 2030 and Beyond

Welcome to “Compliance Tip of the Day,” the podcast where we bring you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements. Whether you’re a seasoned compliance professional or just starting your journey, our aim is to provide you with bite-sized, actionable tips to help you stay on top of your compliance game.

Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law. Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.

In this episode, we consider the five skills every compliance professional should develop to take the next step into 2025, 2030, and beyond in the compliance field. They are: (1) Adapt to thrive; (2) Be creative; (3) Develop emotional intelligence; (4) Become tech-savvy; and (5) Build your personal brand.

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

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Blog

Alexander Cotoia on Continuous Growth and Development: The Key to Success in Compliance

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 was able to chat with Nicolas Latham, Renee Murphy, Jessica Czeczuga, Yee Chow, and Alexander Cotoia. Over this series, we discussed 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 this concluding Post 5, we discuss professional development and mentorship for compliance professionals with Alexander Cotoia.

Continuous professional development is crucial for compliance professionals, especially those in leadership positions. In a dynamic regulatory environment with expanding responsibilities, staying up to date is essential. Compliance professionals must not only understand domestic laws but also international regulations, such as the EU’s Corporate Sustainability Directive (CS 3D). This extraterritorial impact of legislation emphasizes the need for continuous education to address these developments.

Mentorship plays a vital role in the professional growth of compliance professionals. Often, the focus is on the development of hard skills, but soft skills like communication, collaboration, and relationship-building are equally important. Compliance professionals need to be able to speak the language of different stakeholders within the corporate world, such as CFOs or CISOs. Obtaining a working vocabulary in a corporate context is crucial for effective collaboration and building positive rapport with operational functions.

Fortunately, there are numerous resources available for continuous professional development. Platforms like LinkedIn, Coursera, and Harvard Business School online offer courses that focus on soft skills, negotiation, building relationships, and strategic planning. These courses provide compliance professionals with the necessary tools to excel in their roles. Taking courses outside the realm of compliance, such as business fundamentals, can also enhance their understanding of critical business concepts.

Thought leadership is another valuable tool for continuous learning and professional growth. Writing blogs and articles not only showcases expertise but also forces compliance professionals to learn and digest new information. Engaging in thought leadership allows compliance professionals to stay informed, expand their knowledge, and contribute to the compliance community. It also opens doors for networking and potential collaboration opportunities.

The compliance profession offers a challenging yet rewarding career path. It provides opportunities for professional and financial growth. For students considering a career in compliance, mentorship and continuous learning are emphasized as essential elements. Starting in compliance can lay a solid foundation for future success.

Balancing the tradeoffs involved in continuous professional development for compliance professionals can be challenging. It requires finding the right mix of hard and soft skills, staying updated on regulatory changes, and actively engaging in thought leadership. Compliance professionals must consider the impact of their decisions on their own professional growth and the organizations they serve.

In conclusion, continuous professional development is crucial for compliance professionals, particularly those in leadership roles. The dynamic regulatory environment and expanding responsibilities necessitate staying updated on both domestic and international laws. Developing soft skills, obtaining a working vocabulary in a corporate context, and engaging in thought leadership are essential for success in the compliance profession. Mentorship and continuous learning are emphasized as critical elements for professional growth. Compliance professionals must strive to find the right balance and make informed decisions that benefit their careers and the organizations they serve.

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

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31 Days to More Effective Compliance Programs

One Month to Better Reporting and Investigations – Preparing for the Investigation

Under Part 1, Section D. Confidential Reporting Structure and Investigation Process stated in part, Properly Scoped Investigation by Qualified Personnel –What steps does the company take to ensure investigations are independent, objective, appropriately conducted, and properly documented? How does the company determine who should conduct research, and who makes that determination? These questions were presaged by the DOJ’s 2015 Yates Memo and the 2016 FCPA Pilot Program. The pressure on every CCO and company to get an investigation done quickly, efficiently and, most importantly, right is even greater now.
Jonathan Marks began by cautioning that when considering any well-run internal investigation, a CCO must be cognizant of the strictures laid out in the Evaluation. It all begins with who in-house is looking at the complaint and does the CCO, compliance practitioner, or legal team have the skills and capabilities to handle the matter which has arisen. Obviously, if there are esoteric accounting issues or significant internal control workarounds and overrides, a CCO may not have the skills to really understand all the issues. Similarly, if the matter is a global FCPA or equivalent bribery and corruption matter, Marks related, these “come in different flavors, and because they come in different flavors you may not have the skills or capabilities to do an investigation that would take place in say Brazil or Russia or China or India.”

Three key takeaways:

  1. Always remember your ultimate audience may be the government.
  2. You must understand both the business environment and extended business enterprise.
  3. Communication and collaboration in any investigation are critical so you should begin early and continue to do so throughout the investigation.
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Blog

Tribute to Cormac McCarthy-Lessons for the Compliance Professional

Cormac McCarthy died last week. According to his New York Times (NYT) obituary, he was “the formidable and reclusive writer of Appalachia and the American Southwest, whose raggedly ornate early novels about misfits and grotesques gave way to the lush taciturnity of “All the Pretty Horses” and the apocalyptic minimalism of “The Road,” died on Tuesday at his home in Santa Fe, N.M. He was 89.” I came to McCarthy through his work All The Pretty Horses and it was one of the seminal books I have ever read. The only book I can compare it to is Now Let’s Us Praise Famous Men by James Agee and photographer Walker Evans. (Evan’s photos are as spectacular and as equally famous as Agee’s prose.) So today, as my tribute to McCarty, I wanted to take a deep dive into All The Pretty Horses and mine it for leadership lessons for the compliance professional. 

Story Synopsis

All the Pretty Horses was published in 1992. It’s the first book in McCarthy’s Border Trilogy. The story begins in 1949 and is centered around the life of John Grady Cole, a 16-year-old who grew up on his grandfather’s ranch in San Angelo, Texas. After his grandfather’s death, his mother decides to sell the ranch, leaving John Grady, a born and bred cowboy, deeply affected.

Instead of giving in to the changing times, John Grady and his best friend, Lacey Rawlins, decide to head south to Mexico, looking for work as ranch hands. On their way, they encounter a volatile and troubled teenager, Jimmy Blevins, who despite their reservations, joins them. In Mexico, they find work on a vast ranch owned by Don Héctor Rocha y Villareal. John Grady becomes an accomplished horse breaker and falls in love with Don Hector’s daughter, Alejandra, which is forbidden given their different social classes.

However, their peaceful existence is disrupted when Blevins’ past catches up with them. Blevins is accused of horse theft and murder, and John Grady and Rawlins are arrested as his accomplices. Blevins is executed without a trial, while John Grady and Rawlins spend time in a harsh Mexican prison. After enduring the brutal prison conditions, they are released due to the efforts of Alejandra’s great aunt. However, Alejandra, under pressure from her family, ends her relationship with John Grady, which leaves him heartbroken.

John Grady returns to Texas and finds that the world he once knew has changed irreversibly. The novel ends with him setting off into the sunset, uncertain about his future, but with an unbroken spirit and love for the cowboy way of life.

The novel is a coming-of-age story that explores themes of loss, love, and the tension between the old world and the new. McCarthy’s unique narrative style, characterized by minimal punctuation and lyrical prose, underscores the raw beauty and harsh realities of life in the American Southwest and northern Mexico.

Leadership Lessons

All the Pretty Horses presents leadership lessons for the compliance professional through its protagonist John Grady Cole and his experiences. Here are some key leadership lessons we can glean for the compliance professional include:

Decision-Making: John Grady often must make tough decisions, like when he decides to leave his hometown to find a life that suits him better. His choice to help Blevins, despite the risk, also shows a lot about his character. Compliance leadership lesson– compliance professionals must understand that leadership often involves making difficult decisions, with both immediate and long-term consequences.

Responsibility: John Grady takes responsibility for his actions and their consequences. He faces up to his punishments and doesn’t shy away from difficult tasks. Compliance leadership lesson-every compliance professional must accept responsibility for their decisions, good or bad.

Courage: Throughout his journey, John Grady consistently shows courage, whether it’s dealing with the harsh conditions in the Mexican prison or standing up for his values. Compliance leadership lesson– every compliance professional needs to have courage to face adversity, take risks, and stand up for what they believe in. Sometimes you must speak truth to power and be willing to accept the consequences.

Perseverance: John Grady’s determination to survive and maintain his dignity, even in the harshest circumstances, reflects a crucial quality of a leader. Compliance leadership lesson-every compliance professional needs to show determination and the ability to bounce back from setbacks.

Respect and Empathy: John Grady respects the individuals he interacts with, from his fellow cowboys to the horses he works with. Compliance leadership lesson-every compliance professional must respect your colleagues and demonstrate empathy for their challenges in doing business going forward, which are qualities that are critical for a leader to have when dealing with their team.

Integrity: John Grady has a strong sense of moral integrity, sticking to his principles even when faced with challenging situations. Compliance leadership lesson-every compliance professional must always demonstrate integrity in all aspects of your professional life. This is a key trait for leaders, who must maintain integrity and honesty.

Adaptability: Even though John Grady faces a world that is changing around him, he learns to adapt while staying true to his values. Compliance leadership lesson-every compliance professional must adapt to new risks your business meets; whether through new business initiatives or a global pandemic. In short, compliance leaders must demonstrate the ability to adapt to changing circumstances while maintaining core values is crucial.

Failure: Through his relationship with Alejandra, John Grady learns about love, loss, and sacrifice. These experiences, though painful, help him grow and mature as a leader. Compliance leadership lesson-every compliance professional will have failures. How you learn from them will be a key to your development. Compliance professionals need to understand that personal growth often comes through fighting through difficulty.

If you have never done so, I would urge you to read All The Pretty Horses and I hope you find it as moving as I did.

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Sunday Book Review

January 22, 2023 – Top Ethics Books To Read in 2023 Edition

In the Sunday Book Review, I consider books that interest the compliance professional, the business executive, or anyone who might be curious. It could be books about business, compliance, history, leadership, current events, or anything else that might interest me. In today’s edition of the Sunday Book Review, we consider some of the top ethics books which every compliance professional should read in 2023:

·       Ethics for Behavior Analysts by Jon Bailey and Mary Burch

·        Stoic Philosophy and the Control Problem of AI Technology: Caught in the Web by Edward Spence

·       The Rise of Business Ethics by Bernard Mees

·        Business Ethics for Better Behavior by Jason Brennan, William English, John Hasnas, and Peter Jaworski

Resource

20 Best New Ethics Books To Read In 2023 by Annemarie Slaughter

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Sunday Book Review

January 15, 2023 – The Top Business Books to Read in 2023 Edition

In the Sunday Book Review, I consider books that interest the compliance professional, the business executive, or anyone curious. It could be books about business, compliance, history, leadership, current events, or anything else that might interest me. In today’s edition of the Sunday Book Review, we consider some of the top business books which every compliance professional should read in 2023:

·       How to Win Friends and Influence People by Dale Carnegie

·        Influence, New and Expanded: The Psychology of Persuasion by Robert Cialdini

·       The Compound Effect: Jumpstart Your Income, Your Life, Your Success by Darren Hardy

·        Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers by Tim Ferriss

Resource

The Best Business Books to Read in 2023 By Hal Kitzmiller

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Sunday Book Review

January 8, 2023 – The Top AI and Machine Learning Books for 2023 Edition

In the Sunday Book Review, I consider books that interest the compliance professional, the business executive, or anyone curious. It could be books about business, compliance, history, leadership, current events, or anything else that might interest me. In today’s edition of the Sunday Book Review, we consider some of the top AI and machine learning books that every compliance professional should read in 2023:

·       Future Ready: The Four Pathways to Capturing Digital Value by Stephanie L. Woerner, Peter Weill, and Ina M. Sebastian

·        Digitalization of Financial Services in the Age of Cloud by Jamil Mina, Armin Warda, Rafael Marins, and Russ Miles

·       Power and Prediction: The Disruptive Economics of Artificial Intelligence by Ajay Agrawal, Joshua Gans, and Avi Goldfarb

·        Practicing Trustworthy Machine Learning by Yada Pruksachatkun, Matthew Mcateer, and Subhabrata Majumdar

Resource

The Enterpriser’s Project- 10 must-read tech books for 2023

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Creativity and Compliance

Compliance Confessions – Debunking Employee Myths About Compliance

Where does creativity fit into compliance? In more places than you think. Problem-solving, accountability, communication, and connection – they all take creativity. Join Tom Fox and Ronnie Feldman on Creativity and Compliance, part of the award-winning Compliance Podcast Network. In this episode, Tom and Ronnie discuss a new video series launched by L&E; why they made them and how they help the compliance professional to debunk myths about the corporate compliance function. In a trailer for a series entitled ‘Compliance Confessions’, we discuss how sharing about how employees feel about compliance and then statements providing a rebuttal to the perception of compliance officer as Dr. No and the corporate compliance function existing as the Land of No,  populated by Dr. No. We also discuss how changing the reputation of E&C from Dr. No can be a valuable communications tool for your compliance function going forward.

Resources:

Ronnie Feldman on LinkedIn

Learnings & Entertainments on LinkedIn

Ronnie Feldman on Twitter

Learnings & Entertainments 

 L&E Offerings

Compliance Confessions 

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Great Women in Compliance

Sue Scott-From Compliance to Coaching

Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley.

This week we feature another life after Compliance story with Sue Scott.  Sue, originally from South Africa and currently residing in the United Kingdom, is a Compliance veteran with 20 years of experience at HSBC. But this episode doesn’t focus on financial services Compliance, instead we hear Sue’s journey as she considered moving away from Compliance and trying something new.  Mary asks her about her thought process and considerations in making such a big life decision and Sue shares what some of the biggest challenges are for clients at the moment (we’re willing to bet the majority of the Great Women in Compliance audience will find something here relatable – mom/mum guilt anyone?) and Sue shares some coaching advice for how to address some of these issues.

 If you’ve been thinking about getting into coaching, moving into a new area or simply advance planning for your future, this episode will provide helpful considerations and inspiration for taking the big leap – or preparing to do so at least!

For those of you who find that mom/mum guilt is something that resonates deeply, keep an eye out for our upcoming episode with Karina Vollmer where we dive into that challenge in further detail with advice from Karina, a Chief Compliance Officer working mum, or mom as she would say.

The Great Women in Compliance Podcast is on the Compliance Podcast Network with a selection of other Compliance related offerings to listen in to.  If you are enjoying this episode, please rate it on your preferred podcast player to help other likeminded Ethics and Compliance professionals find it.  If you have a moment to leave a review at the same time, Mary and Lisa would be so grateful.  You can also find the GWIC podcast on Corporate Compliance Insights where Lisa and Mary have a landing page with additional information about them and the story of the podcast.  Corporate Compliance Insights is a much-appreciated sponsor and supporter of GWIC, including affiliate organization CCI Press publishing the related book; “Sending the Elevator Back Down, What We’ve Learned from Great Women in Compliance” (CCI Press, 2020).

If you enjoyed the book, the GWIC team would be very grateful if you would consider rating it on Goodreads and Amazon and leaving a short review.  Don’t forget to send the elevator back down by passing on your copy to someone who you think might enjoy reading it when you’re done, or if you can’t bear parting with your copy, consider it as a holiday or appreciation gift for someone in Compliance who deserves a treat.

You can subscribe to the Great Women in Compliance podcast on any podcast player by searching for it and we welcome new subscribers to our podcast.

Join the Great Women in Compliance community on LinkedIn here.

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Blog

Great Structures Week V – The Tacoma Narrows Bridge Failure and Preventing Failure in Your Compliance Program

I conclude my Great Structures Week with a focus on structural engineering failures: suspension bridges and the challenges of wind in their construction and maintenance. I am drawing these posts from The Great Courses offering, entitled “Understanding the World’s Greatest Structures: Science and Innovation from Antiquity to Modernity”, taught by Professor Stephen Ressler. In his chapter on suspension bridges he notes that the “Tacoma Narrows Bridge was the third longest span in the world when it opened to the world, this month of July in 1940.” Yet it collapsed only four months later, in one of the most famous visual images of a bridge’s collapsing. This is due to the “inherent flexibility of cable as a structural form”. A bridge can move in longitudinal vibration, that is up and down and in torsion, where it twists from side-to-side.

Most people recognize unstiffened suspension bridges as old as man and engineering itself. It was not until the 1820s that serious study was brought to bear on the issue of wind-related collapse of suspension bridges. The initial solution was to simply use more weight to reinforce the span. However, while that solution did bring some stability, it reinforced damage as the structure became a textbook example of Newton’s Second Law of Motion, which states that the acceleration of an object is dependent upon two variables – the net force acting upon the object and the mass of the object; meaning that once a heavy weight is in motion, it is more resistant to deceleration.

Yet it was scientific methodology that led to the disaster with the Tacoma Narrows Bridge. An engineer named Leon Moisseiff had developed a theory that long spanned suspension bridges were heavy enough that they did not require stiffening trusses because “their mass stabilized them against wind-induced vibrations.” However, this theory failed to take into account how air flows around a bridge and the “dynamic response of the structural system.” Ressler concludes this section by stating, “this case has become a classic symbol of the dangers of arrogance born of overconfidence in science-based design methods, and belt-and-suspenders engineering has made a bit of a comeback.”

I thought about the catastrophic failure of the Tacoma Narrows Bridge in the context of one of the greatest risks in Foreign Corrupt Practices Act (FCPA) compliance; that being third parties. Many non-compliance corporate employees assume that if a third party passes due diligence muster; they are in the clear. After all, you cannot stop a third party from making a bribe or other corrupt payment. Fortunately, the Department of Justice (DOJ) does not take such a myopic view as many business types. Under the FCPA, a company is responsible for the actions of its third-party representatives.

The real work around your third-party compliance program begins after the contract is signed and it is in the management of the third-party relationship. While the FCPA Guidance itself only provides that “companies should undertake some form of ongoing monitoring of third-party relationships”. Diana Lutz, in “Global anti-corruption and anti-bribery program best practices”, said, “As an additional means of prevention and detection of wrongdoing, an experienced compliance and audit team must be actively engaged in home office and field activities to ensure that financial controls and policy provisions are routinely complied with and that remedial measures for violations or gaps are tracked, implemented and rechecked.”

Carol Switzer, writing in the Compliance Week magazine, set out a five-step process for managing corruption risks, which I have adapted for third parties.

  1. Screen – Monitor third party records against trusted data sources for red flags.
  2. Identify – Establish helplines and other open channels for reporting of issues and asking compliance related questions by third parties.
  3. Investigate – Use appropriately qualified investigative teams to obtain and assess information about suspected violations.
  4. Analyze – Evaluate data to determine “concerns and potential problems” by using data analytics, tools and reporting.
  5. Audit – Finally, your company should have regular internal audit reviews and inspections of the third party’s anti-corruption program; including testing and assessment of internal controls to determine if enhancement or modification is necessary.

Additionally, there several different functions in a company that play a role in the ongoing monitoring of the third party. While there is overlap, I believe that each role fulfills a critical function in any best practices compliance program.

Relationship Manager

There should be a Relationship Manager for every third party which your company does business. The Relationship Manager should be a business unit employee who is responsible for monitoring, maintaining and continuously evaluating the relationship between your company and the third party.

Compliance Professional

Just as a company needs a subject matter expert (SME) in anti-bribery compliance to be able to work with the business folks and answer the usual questions that come up in the day-to-day routine of doing business internationally, third parties also need such access. A third party may not be large enough to have its own compliance staff so I advocate a company providing such a dedicated resource to third parties. This role can also include anti-corruption training for the third party, either through onsite or remote mechanisms. The compliance practitioner should work closely with the relationship manager to provide advice, training and communications to the third party.

3rd Party Oversight Committee

A company can have a Third-Party Oversight Committee review documents relating to the full panoply of a third party’s relationship with the company. It can be a formal structure or some other type of group, but the key is to have the senior management put a ‘second set of eyes’ on any third parties who might represent a company in the sales side. In addition to the basic concept of process validation of your management of third parties, as third parties are recognized as the highest risk in FCPA or Bribery Act compliance, this is a manner to deliver additional management of that risk.

After the commercial relationship has begun the Third-Party Oversight Committee should monitor the third-party relationship on no less than an annual basis. This annual audit should include a review of remedial due diligence investigations and evaluation of any new or supplement risk associated with any negative information discovered from a review of financial audit reports on the third party. The Third-Party  Oversight Committee should review any reports of any material breach of contract including any breach of the requirements of the Company Code of Ethics and Compliance. In addition to the above remedial review, the Third-Party Oversight Committee should review all payments requested by the third party to assure such payment is within the company guidelines and is warranted by the contractual relationship with the third party. Lastly, the Third-Party Oversight Committee should review any request to provide the third party any type of non-monetary compensation and, as appropriate, approve such requests.

 Audit

A key tool in managing the relationship with a third-party post-contract is auditing the relationship. I hope that you will have secured audit rights, as that is an important clause in any compliance terms and conditions. Your audit should be a systematic, independent and documented process for obtaining evidence and evaluating it objectively to determine the extent to which your compliance terms and conditions are followed.

Perhaps now you will understand why I say that managing the relationship of your third party’s is where the real work of your FCPA compliance program comes to the fore. It also demonstrates a key difference in having a paper compliance program and doing compliance. Having a paper compliance program is simple but doing compliance is not always easy; you have to work at it to maintain an effective program.

I hope that you have enjoyed this week’s offering based around some of the world’s greatest structures, their engineering concepts and innovations and how they all related to a best practices compliance program. I am a huge fan of The Great Courses offerings and if you are interested in learning in a great many areas it is one of the best resources available to you.