In this episode of the FCPA Compliance Report I visit with Gordon Graham. Gordon is a successful whistleblower who told his tale in the book The Intrepid Brotherhood. In this book, Graham discusses how corruption threatened to ruin jobs and harm lives. The leadership at the top of the organization used intimidation, distrust, and secrecy to control the Chelan County Public Utility District showing that control and power can corrupt even the most ethical organization’s integrity—unless someone speaks up. Which Gordon Graham did. In this podcast, he tells his story.
Resources
website: www.intrepidbrotherhood.com
LinkedIn: linkedin.com/in/gordon-graham-57385319a
Facebook Author Page: In Search Of Aristotle | Facebook
Tag: compliance
In today’s edition of Sunday Book Review:
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- The Human Element: Overcoming the Resistance that Awaits New Ideas by David Schonthal and Loran Nordgren
- The Startup Owner’s Manual and The Four Steps to the Epiphany by Steve Blank
- The Invincible Company by Alex Osterwalder
- Pirates in the Navy by Tendayi Viki
Categories
Why Compliance Needs to Talk to Tax
What is the intersection of tax and compliance? Why does a Chief Compliance Officer (CCO) or compliance professional need to sit down with the corporate head of tax? How does a corporate tax function fit into a best practices compliance program? It turns out there is quite a bit a compliance professional can learn from a tax professional. Moreover, there are many aspects of tax which should be considered by a CCO and compliance professional from an overall risk management perspective. Unfortunately, these questions are rarely explored in the compliance community. In this inaugural episode, we consider the following topics.
Why Should Compliance and Tax Interact?
All organizations have an enterprise risk management (ERM) system. One risk common to multinational companies especially is corporate tax risk; and yet, it tends to remain under the radar. While tax professionals are usually very good at identifying and mitigating tax risk, if there is no close interaction between compliance and tax professionals, the risks are elevated.
Sophistication in Taxing Jurisdictions
Most jurisdictions have a tax code, but street rules tend to also be in play. “You have to establish very early on that you don’t pay bribes,” Tracy advises. The results of following the law are more expensive, but it pales in comparison to the cost of putting your company at risk.
Resources
Tracy Howell | Email | LinkedIn
In today’s edition of Daily Compliance News:
- Stericycle FCPA settlement announced. (DOJ Press Release)
- Amazon workers were illegally fired for protected activity. (WaPo)
- FATF to evaluate countries more often. (WSJ)
- Why compliance needs to be concerned with social media. (WSJ)
Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley.
One of the interesting things about ethics & compliance as a field is that we look at ethical decision-making and policies and working to be innovative and approachable. In today’s episode Lisa speaks with Hemma Ramrattan Lomax, Senior Corporate Counsel, Integrity and Compliance at Snap, Inc. As you may have heard last week with Nicole Diaz, Snap is doing exactly with their Code of Conduct and how they center so many things around their core value of kindness. Hemma elaborates on this and the career she has built through the art of integrity.
When she was younger, Hemma’s goal was to be the first female Secretary General of the UN (which still has not happened), and Hemma talks about how this brought her into law as she grew up in the UK, to deciding to come to the US to work for the SEC, and eventually to Snap. She mentions how her work now relates to her earlier goals, and that radical curiosity is what keeps her career and interests evolving.
To Hemma, the “art of integrity” has guided her career interests, and how we can all do that to make impactful changes, whether it is in our communities, in DEI, or in other ways.
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. 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).
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.
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 Susan Divers, currently Director of Thought Leadership at LRN.
In 2009, Susan moved into the CECO chair at AECOM. She became the Senior Corporate Vice President, Chief Ethics and Compliance Officer & Associate General at AECOM. In this role she built out a compliance program across the globe for an international infrastructure construction company and built out her compliance team. She learned that to engage employees in compliance and ethics you often needed to explain the ‘why’ of compliance. She talked about the values of senior leadership and how that helped infuse compliance throughout the organization. She was particularly proud of the company receiving a World’s Most Ethical designation early in her tenure and then for five consecutive years.
Resources
Susan Divers LinkedIn Profile
Gatekeepers of third parties have to handle evolving new questions that ensure ESG initiatives align with the company’s values, providing for the welfare of the employees, communities, and the environment. Erika Peters, Managing Director and Global Head of Third Party and Supply Chain Risk management at Exiger, chats with Thomas Fox on The ESG Compliance Podcast on the importance of these third parties as an extension of the company and how to hold them accountable.
Watch ▶️ The ESG Standards with Thomas Fox & Erika Peters
✔️ Admittingly, the risk is all around a company’s entire ecosystem. Peters says that no third party is more critical and may have a higher risk than another. From an ESG perspective, companies must look at all parties involved that can potentially hurt their brand and reputation.
✔️ On an ESG framework that doesn’t exist. Many companies around ESG have been asking for government guidance, regulation, or other government signals on standards they should follow. The first step is to see what they already have and the existing data and bring it to one place.
✔️ Technology is the only way to go in 2022 to assess the criticality of a third party. Many companies are still not using technology to bring data together to map their supply chain and then understand the effects of the inherent downstream risks.
✔️ Transparency is vital for supply chain and third-party risk management solutions provider Exiger. With the launch of the platform Supply Chain Explorer, companies can instantly look into any entity in the world’s supply chain.
✔️ Supply chain and third parties are more than just your direct counterparties. Tom Fox and Erika Peters explore how companies should know third parties more than simply their direct counterparties and have direct contact with the fourth, fifth, and perhaps even sixth party down the line.
✔️ Erika cites how leadership is an important component of everything in ESG. More information is necessary for those companies in terms of biographical information to start layering on the risk question and set the framework for creating that compliance picture.
Erika Peters is the Managing Director and Global Head of Third Party and Supply Chain Risk management at Exiger. Exiger is the global leader in AI-powered supply chain and third-party risk management solutions. Visit https://www.exiger.com/ and get the early free trial of Supply Chain Explorer in May 2022.
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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.
The digital transformation of compliance will probably be the biggest change in our profession since the move to operationalizing compliance in the past decade. Legal professionals are generally ill-suited to lead this effort due to the legal focused training we all received, not quantitative training that most business students received. This means that many Chief Compliance Officers (CCOs), compliance professionals and corporate compliance functions struggle to reap the benefits of investments in digital transformation. I was therefore intrigued by a recent Harvard Business Review (HBR) article, by Marco Iansiti and Satya Nadella, Microsoft Chief Executive Officer (CEO), on a five-step approach to digital transformation. The article, Democratizing Transformation, sets out how innovation can be pushed out throughout a company’s workforce. I have adapted it for the compliance professional.
For a true digital transformation, technologists and data scientists alone cannot bring about the kind of wholesale innovation both a compliance function and a business unit need. This means that your organization should pair “data scientists with business [and compliance] employees who had insight into where improvements in efficiency and performance were needed.” Another strategy, which is near and dear to the heart of Carsten Tams, Ethical Business Architect and founder and CEO of Emagence LLC, is to use Design Thinking concepts in designing and implementing a digital innovation of compliance. The authors note, “A growing number of teams adopted agile methods to address all kinds of opportunities. The intensity and impact of transformation thus accelerated rapidly, driving a range of innovation initiatives.” This same strategy can work in sales as well as compliance.
It is this step which “democratize access to data and technology” outside of compliance and can lead to true and permanent innovation. The potential for employee-driven digital innovation cannot be accomplished by small groups of technologists and data scientists walled off in organizational silos. It will require much larger and more-diverse groups of employees – executives, managers, and frontline workers – coming together to rethink how every aspect of the business should operate. Once again this is what Tams has talked about with his articulation of Design Thinking, the engagement of business unit employees can well be a significant driver of compliance.
To achieve the type of engagement which will drive real digital transformation, a CCO must create synergy in three key areas: Capabilities, Technology and Architecture. The authors state, “Digital transformation requires that executives, managers, and frontline employees work together to rethink how every aspect of the business should operate.”
- Capabilities. It is axiomatic that successful transformation and innovation efforts in compliance requires “that companies develop digital and data skills in employees outside traditional technology functions. These capabilities alone, however, are not sufficient to deliver the full benefits of transformation; organizations must also invest in developing process agility and, more broadly, a culture that encourages widespread, frequent experimentation.” It is all a long-winded way of saying “Call Carsten Tams” and use his framework for Design Thinking as a starting point for your digital transformation.
- Technology. As always, “investment in the right technologies is important, especially in the elements of an AI stack: data platform technology, data engineering, machine-learning algorithms, and algorithm-deployment technology. Companies must ensure that the technology deployed is easy to use and accessible to the many nontechnical employees participating in innovation efforts.” Fortunately, there are more compliance product providers you can provide the right tech to you. See the Rise of ComTech.
- . One of the things that many compliance professionals do not often consider is that of architecture. The authors believe the “investment in organizational and technical architecture is necessary to ensure that human capabilities and technology can work in synergy to drive innovation. That requires an architecture—for both technology and the organization—that supports the sharing, integration, and normalization of data (for example, making data definitions and characteristics consistent) across traditionally isolated silos. This is the only real, scalable way to assemble the necessary technological and data assets so that they are available to a distributed workforce.” This is similar to what the Department of Justice (DOJ) intoned in the 2020 Update to the Evaluation of Corporate Compliance Program where they mandated for the first time that both the CCO and corporate compliance function should have access to all corporate data, literally cutting across all siloes.
The authors concluded, “mandate for digital transformation creates a leadership imperative: Embrace transformation, and work to sustain it.” I would add that these words apply even more so to the CCO who is leading the digital transformation of a compliance program. You should put together a clear strategy and sell it to the Board and senior management as well as communicating it “relentlessly” throughout your organization. Work to inaugurate a compliance “architecture to evolve into as you make the myriad daily decisions that define your technology strategy. Deploy a real governance process to track the many technology projects underway, and coordinate and integrate them whenever possible. Champion agility in all business initiatives you touch and influence. And finally, break free of tradition. Train and coach your employees to understand the potential of technology and data, and release the innovators within your workforce.”
Momentum is growing for the digital transformation of compliance; from the regulators to business units to investors. Indeed, it will be the driving strategy for compliance in 2025 and beyond. But we must always remember that it is the human element that will be the critical component to drive the transformation and more importantly use those tools to drive compliance up to the next level of effectiveness and engagement.
In today’s edition of Sunday Book Review:
- The Business of the 21st Century by Robert Kiyosaki
- The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries
- Zero to One: Notes on Startups, or How to Build the Future by Peter Theil
- Sustainability and Supply Chain Management 12th edition Jay Heizer
As the NY Mets have the best record in baseball and we prepare for the celebrations of Easter and Passover, Tom and Jay are back to look at some of the week’s top compliance and ethics stories in the Ng Convicted edition.
Stories
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- Roger Ng was convicted. Tom in the FCPA Compliance and Ethics Blog.
- Lessons from DOJ’s first cyber fraud settlement? Annie Hudgins in the FCPA Blog.
- Depression as corporate materiality issue. Dick Cassin in the FCPA Blog.
- Should CCOs be required to certify compliance programs? Mike Volkov in Corruption Crime and Compliance.
- CEO fined by SEC for impeding whistleblower. Aaron Nicodemus in Compliance Week. (sub req’d) Matt Kelly in Radical Compliance.
- How much BOD oversight of compliance is enough? Jeff Kaplan in Conflict of Interest Blog.
- Compliance in recessionary times. Jim DeLoach in CCI.
- Water and corruption. Rick Messick in GAB.
- Why should an organization disclose diversity information? Antinuke Adrian in Harvard Law School Forum on Corporate Governance.
- Data governance best practices. Eray Eliaçik in Data Economy.
Podcasts and More
- Tom visits with Matt Galvin and Dan Kahn over a 2-part podcast series. In Part 1, they talk about dealing with the DOJ during an FCPA investigation and thereafter.
- Into Star Trek, then join Tom and John Champion, who is on a 15-year mission to do a podcast on every episode of Star Trek, television, movie, and animated show on the podcast MissionLogPodcast.com. In Part 1, from TOS up to the start of TNG. In Part 2, from TNG to today.
- This month on the Compliance Life, I visit with Susan Divers, Director of Thought Leadership at LRN. In Part 1, academic life and early professional career. In Part 2, she moves to the corporate world.
- Why should you attend Compliance Week 2022? Find out on this episode of From the Editor’s Desk. Listeners get a $200 discount to CW 2022 with the code Fox200. More here.
- Join Tom and Jay at ECI Impact 2022. Listeners to this podcast can save 20% off registration
by entering discount code: TOM20 at checkout. - Welcome back, Sam Rubenfeld.
Tom Fox is the Voice of Compliance and can be reached at tfox@tfoxlaw.com. Jay Rosen is Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com.
