Tag: compliance

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Profiles of Corrupt Payments

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. KonaAI is the sponsor of those podcasts. This blog post series will flesh out the podcast show notes. Over the next five blog posts, we will discuss generative AI and ChatGPT in compliance, the profiles of corrupt payments, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. In Part 2, we will consider the profiles of a corrupt payment.

The episode highlighted research by MIT and KonaAI that examined $75 billion in payments from various companies to identify characteristics associated with high-risk payments. For businesses looking to identify and stop improper payments, the MIT and KonaAI research offered useful insights. Key attributes that were found to be associated with high-risk payments included payments made without purchase orders, payments flagged by anti-corruption keywords, and payments that significantly deviated from the norm. These attributes were often relevant in the data that humans tagged as high-risk.

One of the key takeaways from the research is the importance of investigating red flags in sales increases. A case study was presented in the episode, highlighting a suspicious sales increase in a Polish province. Contributions to a charitable organization came with increased sales, which raised questions about potential corruption or bribery. This case study emphasizes that compliance officers and risk professionals must monitor commissions, sales incentives, and margins to identify potential bribery and corruption issues.

Companies are encouraged to leverage data analysis tools like KonaAI to identify high-risk payments and prevent corporate corruption. These tools can help track and identify improper payments, providing transparency and easy access to financial accounting data for compliance professionals. By combining financial accounting data with data analysis capabilities, companies can gain insights into payment patterns and detect anomalies that may indicate potential corruption.

However, it is important to note that tradeoffs are involved in balancing different factors when identifying high-risk payments. Compliance officers and risk professionals must carefully consider the impact of their decisions on the business. The podcast episode highlighted the analogy of brakes on a car, emphasizing that the purpose of brakes is not to slow down but to enable the car to go fast and stop when necessary. Similarly, compliance efforts aim to facilitate business growth while ensuring ethical practices and preventing corruption.

The episode also discussed the challenges of identifying high-risk payments and preventing corporate corruption. One challenge is the need for collaboration among companies in an anonymous way to analyze the profiles of improper payments. The research conducted by MIT and KonaAI demonstrated the potential of such collaboration in identifying common risk triggers and profiles of high-risk payments. However, ensuring data privacy and confidentiality is crucial in such collaborative efforts.

In conclusion, identifying high-risk payments and preventing corporate corruption require a comprehensive approach that combines data analysis, collaboration, and a focus on business growth. The MIT and KonaAI research offers useful insights into the characteristics of high-risk payments. Compliance officers and risk professionals are urged to leverage data analysis tools and closely monitor payment patterns to detect and prevent improper payments. By balancing compliance efforts and business objectives, companies can mitigate corruption risks and foster a culture of transparency and integrity.

Examining data is like peering into a crystal ball that projects the inner workings of a business, but only if you know what to look for. One essential facet is sales performance. Even the tiniest irregularities can be a hint of greater issues at hand, such as improper payments. So, understanding and tracking sales data, be it a sudden sales surge in a particular area or an individual outperforming all expectations, is quite crucial.  Walden emphasized the importance of transparency in analyzing sales data. If figures shoot up in a specific region or uncannily exceptional sales are tied to a particular individual, Vince suggests investigating to find out more. The key here, he describes, is the ability to spot these oddities before they morph into a serious problem. Transparency in financial analysis, Vince implores us, can be a game-changer in tracking down and rectifying improper payments.

Third-party relationships can be as much a source of risk as any other part of a business. Keeping tabs on the financial activities of entities such as distributors, commission sales agents, and joint venture partners is therefore imperative. Monitoring these relationships to minimize the risks of improper payments. Walden suggests that the same strategies used to interpret company data for potential risks can also be utilized for third-party relationships. Compliance officers can pair financial analysis with tools like KonaAI to actively monitor anomalies or suspicious transactions. In this scenario, compliance officers can be armed with the right tools and data to monitor and, if required, mitigate any suspicious financial activities related to third-party relationships.

Extending data analysis to third parties is no longer nice; in today’s compliance and fraud-risk environment, it is a business necessity. Monitoring these outside relationships closely provides another layer of security and reduces the breeding ground for unethical activities like improper payments. By integrating financial data with tools like these, compliance officers can actively keep an eye out for anything unusual. This way, companies are not only ensuring that their internal affairs are in order but are also making sure that their external associations are clean and ethical. It’s an insight into how companies can use strategic data analysis to maintain regulatory compliance.

The bottom line is that compliance officers are the guardrails that keep a company on track. Their role is two-pronged – facilitate business growth and, at the same time, deter the business from veering off into unethical practices. Compliance officers ensure the company is always one step ahead in identifying and addressing compliance risks. A balance between growth enablement and ethical conduct is needed to steer the course towards success.

Finally, as compliance officers, you have the power to make a significant impact by preventing improper payments and preserving your organization’s reputation. By embracing the learnings from this podcast episode, you can confidently navigate the challenges of today’s complex business environment and ensure that your efforts contribute to a culture of transparency and ethical behavior. Together, we can create a stronger, more accountable business world.

Resources:

Connect with Vince Walden on LinkedIn

Check out KonaAI

Connect with Tom Fox on LinkedIn

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31 Days to More Effective Compliance Programs

One Month to More Effective Written Standards: Day 6 – Operationalization of your Code of Conduct

How can you work to operationalize your Code of Conduct as articulated in the DOJ 2023 Evaluation of Corporate Compliance Programs (ECCP)? The 2023 ECCP focuses not on whether a company has a paper compliance program but whether a company is actually doing compliance. A company does compliance by moving it into the functional business units as a part of an overall business process. That is what makes a compliance program effective at the business level. There are several different parts of the 2023 ECCP that touch upon your Code of Conduct.
The Code of Conduct design and implementation process enshrine your company’s values. Those are set by senior management and their input and support for any code project, whether initial draft or update, is critical. This gets to the heart of operationalization and demonstrates how a Code of Conduct can work to meet the DOJ requirements. As an early part of your design and drafting process, you should assemble a cross-functional team. This is important for several reasons. First, diversity in your team will help produce a more well-rounded final product. But having such team diversity will also assist in your benchmarking effort, coupled with those who are going to help you out looking at designs and maybe helping forge the design of the code. Finally, you can use a group to help in the drafting, redrafting and editing process. This diversity will help you to answer all of the DOJ questions from the 2019 Guidance in a manner consistent to support operationalization.
All of these requirements point to getting out and making your Code of Conduct a part of the very fabric of your organization. By using some or all of these strategies, you will have a good starting point. But it is more than simply rollout and training. There must be ongoing communications as well.

Three key takeaways:

  1. What has been the role of senior management in the creation or update of your Code of Conduct?
  2. How have you worked with employees outside the compliance function to lay the groundwork for fully operationalizing your Code of Conduct?
  3. How have you measured the effectiveness of your Code of Conduct training?

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

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Innovation in Compliance

Innovation in Compliance – Dr. Laura Purdy on Revolutionizing Healthcare: The Power and Potential of Telemedicine

Innovation comes in many areas and compliance professionals need to not only be ready for it but embrace it. One of those areas is telehealth and telemedicine. My guest in this episode is Dr. Laura Purdy, a true evangelist for both telehealth and telemedicine.

Telemedicine in the Army has become crucial in providing healthcare to remote and deployed soldiers. Dr. Laura Purdy, a family medicine physician with a military background, has been at the forefront of this innovation. Telemedicine allows doctors to provide care remotely, improving access to healthcare in rural areas with limited services. However, the insurance industry’s lack of understanding hinders acceptance of telemedicine. Dr. Purdy encourages patients to try telemedicine, especially cash pay services, for more control over their healthcare choices. Scaling up a telehealth company requires careful consideration of being cash pay or accepting insurance. Regulatory challenges in telehealth include physician licensing, state laws, legal standards, and controlled substances. The future of telemedicine involves seamless integration of virtual and in-person care. Dr. Purdy’s company, AfD Health System, aims to provide accessible care and educational content through Instagram and a developing website. Overall, telemedicine has the potential to revolutionize healthcare delivery, but it requires greater acceptance, understanding, and comprehensive regulation.

Key Highlights

·      Telemedicine in the Army

·      Telemedicine: Improving Access to Healthcare

·      Challenges in Telehealth Regulation

·      The Future of Telemedicine

·      AfD Health System

 Resources

Dr. Laura Purdy on LinkedIn

DrLauraPurdy.com

Tom Fox

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Blog

Geopolitical Risks and Business Opportunities: Part 2 – Latin America

I recently had the opportunity to visit with Dr. Ian Oxnevad, Director of Geopolitical Risk Intelligence at Infortal Worldwide. Global Risk Review, a podcast series that Infortal Worldwide sponsors was the reason for this visit. Dr. Oxnevad is a seasoned expert in geopolitical risk intelligence, with a Ph.D. in political science and a master’s degree in National Security Studies. Over this five-part blog post series, we will review Dr. Oxnevad’s views in each one of these regions. Part 2 reviews the business opportunities and risks in Latin America.

Dr. Ian Oxnevad is a highly regarded expert in global geopolitical risk, with special knowledge of Latin America. His extensive experience and understanding of the region’s shifting dynamics shape his perspective on Latin America’s geopolitical risks and business opportunities. Oxnevad identifies significant changes and instability in the region, including increased statism, corruption, and authoritarianism, as well as China’s growing influence, particularly in Brazil. He emphasizes the importance of due diligence and geopolitical risk intelligence, often overlooked by CEOs and political figures. He discusses the risks and potential opportunities for US businesses in Mexico, Venezuela, Cuba, Chile, and Ecuador.

Latin America is a region that is experiencing a rise in geopolitical risk and instability. With China increasing its presence in the region and concerns growing over corruption and authoritarianism, it is crucial for companies considering investment in Latin America to prioritize due diligence and geopolitical risk intelligence. Despite these challenges, the region is not on the sidelines of global events and offers potential business opportunities.

One of the popular strategies for US companies is nearshoring in Mexico. However, this approach comes with its own set of risks. Nationalization, political divisions, and crime are some of the factors that companies need to consider when investing in Mexico. It is important to conduct thorough research and analysis to understand the specific risks associated with each location within Latin America.

Dr. Oxnevad emphasized the importance of paying attention to Latin America regarding geopolitical risks and business opportunities. He pointed out that many CEOs and people in the political world view Latin America as being off the sidelines of major events worldwide, but this is far from the truth. Latin America is a dynamic region that requires careful consideration and attention.

Despite its challenges, Cuba can become a financial hub in Latin America. Its strategic location and favorable weather make it an attractive destination for businesses. However, significant reforms, regional ties, and US investment would be necessary to realize this potential. Cuba was historically a financial center in the Americas under Spanish rule. If it were to liberalize and attract investment, it could play a similar role in Latin America as the UAE does in Africa.

Additionally, simply looking at a map of the Caribbean Sea and the Atlantic Ocean reveals that Cuba is the best entry point for the northern Latin American continent from a transportation perspective. Cuba’s potential as a gateway to northeastern Latin America, particularly in shipping and transshipping, makes it an attractive business prospect. Finally, the Obama Administration’s initiative to open Cuba to US commerce, which the Trump Administration scuttled, shows an active consumer base for US goods, products, and services. When President Obama visited Cuba, over 2000 US business executives traveled to meet and assess the business opportunities.

Venezuela, on the other hand, presents a different set of challenges. The Venezuelan regime is hostile towards the US, and China has increased its presence there. This makes a significant opening for US businesses unlikely. Moreover, even if there is an opening, the pervasive corruption problem will make it difficult to do business with Venezuela. The national energy concern, PdVSA, is generally recognized as one of the most corrupt energy-related state-owned enterprises globally. Navigating doing business with PdVSA will be difficult and closely watched by US authorities.

Conversely, despite not being directly connected to the energy industry, Cuba has a better chance of opening up. The existing regime in Cuba relies on Raul Castro for legitimacy, and there is a greater likelihood of liberalization due to political reasons.

When considering business opportunities in Latin America, it is essential to assess the geopolitical risks associated with each country. Chile, for example, is considered safer than Ecuador due to its more pro-business body of law. However, Chile is internally divided, and there are pushes to increase authoritarianism. Ecuador, on the other hand, appears more unstable, with recent electoral violence. Conducting thorough screenings and assessments of each country’s legal framework, corruption levels, labor relations, and criminal risks is crucial for making informed decisions.

In conclusion, Latin America presents both geopolitical risks and business opportunities. Companies must conduct due diligence and gather geopolitical risk intelligence to navigate the challenges and tradeoffs. Latin America should be noticed, as it is a region actively involved in global events. By carefully considering the impact of geopolitical risks and making informed decisions, businesses can tap into the potential that Latin America has to offer.

Please join us tomorrow when we explore Geopolitical Risks and Business Opportunities in Russia and Ukraine.

You can check Dr. Oxnevad in the full five-part Riskology by Infortal podcast series here.

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Data Driven Compliance

The Uses of Data Driven Compliance: Part 1 – What’s the Hype?

Welcome to Data Driven Compliance. In this podcast, we discuss how to use data to improve and enhance the effectiveness of your compliance program, creating greater business efficiency, all leading to more return on investment for your compliance regime. Join host Tom Fox as he explores how data will drive your compliance program to the next level. This podcast is sponsored by KonaAI.

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. Over these five podcasts, we will discuss generative AI and ChatGPT in compliance, the profiles of corrupt payments, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. In Part 1, we ask, ‘What’s all the hype around generative AI and ChatGPT in compliance’?

Vince Walden is a seasoned professional in the field of generative AI and chatbots, with a particular focus on compliance monitoring. He firmly believes that these technologies have the potential to improve the efficiency and effectiveness of compliance monitoring significantly. Drawing from her extensive experience in technology-assisted review and his current role at KonaAI, Walden sees practical applications for generative AI in navigating compliance monitoring functions and interacting with data dashboards, eliminating manual intervention. However, he also acknowledges the potential pitfalls of over-reliance on generative AI, such as the risk of false statements and the need for fact-checking. Despite these challenges, Walden remains optimistic about the future of generative AI and chatbots in transforming the compliance industry and explains why you should.

Key Highlights:

  • The Evolution of Compliance Monitoring with Generative AI
  • Efficient Compliance Monitoring with Generative AI
  • The Importance of Fact-Checking ChatGPT
  • Customizable Compliance Monitoring Tool for Companies

Resources:

Connect with Vince Walden on LinkedIn

Check out KonaAI

Connect with Tom Fox on LinkedIn

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Blog

Revolutionizing Compliance Monitoring with Generative AI and Chat GPT

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. KonaAI is the sponsor of those podcasts. This blog post series will flesh out the podcast show notes. Over the next five blog posts, we will discuss generative AI and ChatGPT in compliance, the profiles of corrupt payments, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. In Part 1, we will consider using generative AI and ChatGPT for compliance.

My special guest is Vince Walden, a trailblazer spearheading transformative advancements in the compliance industry through the innovative use of data and data analytics. Vince’s grounding in generative AI and Chat GPT has enabled him to push the boundaries of traditional compliance monitoring. His knack for simplifying complex concepts has won him acclaim at numerous conferences, where he frequently shares his expertise. Vince’s novel strategies are revolutionary and rapidly becoming the new standard in the field.

Together with Walden, we will explore how compliance professionals can enhance their monitoring efficiency through generative AI and Chat GPT. Having worked extensively in the compliance and data arenas, Walden understands the challenges compliance professionals face in navigating the complex regulatory landscape. He shares his expertise and highlights practical use cases of Chat GPT in compliance monitoring, demonstrating how it can streamline the decision-making process. We will provide actionable strategies for improving compliance monitoring and addressing compliance professionals’ pain points.

You have probably heard of Generative AI. What is the hype about it? Generative AI does not just analyze data—it creates or “generates” responses or outputs based on the given data. Something like a brilliant virtual assistant! Walden discussed some of the uses. He mentioned how these AI chatbots can interact directly with a compliance dashboard. This means it is more than simply about reading data—it is about interpreting it and helping make navigating tons of data more accessible. It provides recommendations, insights, and options based on what it’s looking at. This could eliminate the need to click around on your dashboard.

AI is pretty good with data. But what about qualitative information? You might be wondering if you can leave everything entirely to AI. Walden adds a bit of a reality check here by reminding us of the importance of human intervention in checking the AI’s output. There is a downside to relying exclusively on AI’s output. A compliance professional must take results at face value. There is a need for validation and fact-checking to ensure we’re not accidentally spreading misinformation or making decisions based on false statements. It’s like that saying, “Trust but verify.”

One of the key challenges associated with generative AI and chatbots in compliance monitoring is striking the right balance between automation and human oversight. While chatbots can assist in navigating and analyzing data, human judgment and expertise are still crucial in interpreting the results and making informed decisions. Compliance professionals must ensure that the rules and algorithms used by the chatbots are accurate and aligned with regulatory requirements.

Another consideration is data privacy and security. Using generative AI and chatbots within a secure platform that protects sensitive information is essential. Compliance professionals should avoid sending data to third-party providers and ensure privacy regulations are followed.

Despite these challenges, generative AI and chatbots in compliance monitoring are promising. By leveraging these technologies, compliance teams can improve efficiency, reduce costs, and enhance the overall effectiveness of their monitoring processes. The ability to customize review strategies based on different risk thresholds and areas of concern further enhances the value of these tools.

The bottom line is that generative AI and chatbots are set to revolutionize compliance monitoring by providing professionals with more efficient and interactive ways to navigate data and identify potential compliance issues. While there are tradeoffs and challenges to consider, the benefits of these technologies in terms of efficiency and cost-effectiveness are significant. Compliance professionals must exercise caution, fact-check the output of generative AI, and maintain human oversight to ensure accuracy and compliance with regulations. As compliance monitoring continues to evolve, the integration of generative AI and chatbots will undoubtedly play a crucial role in shaping its future.

The steps outlined in the article – leveraging generative AI and Chat GPT for compliance monitoring – are pivotal in helping compliance professionals achieve improved monitoring efficiency. By using generative AI to analyze large volumes of data in real time, compliance professionals can detect anomalies and potential violations more efficiently than ever. Additionally, the automation of compliance checks through Chat GPT significantly reduces the burden of manual reviews and frees up valuable time for proactive monitoring activities. These technological advancements enhance monitoring accuracy and streamline the decision-making process, allowing compliance professionals to make informed and timely decisions. By adopting these innovative tools, compliance professionals can achieve improved compliance monitoring results and ensure organizational adherence to regulations.

 Resources:

Connect with Vince Walden on LinkedIn

Check out KonaAI

Connect with Tom Fox on LinkedIn

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Blog

Geopolitical Risks and Business Opportunities: Part 1- The Middle East 

I recently had the opportunity to visit with Dr. Ian Oxnevad, Director of Geopolitical Risk intelligence at Infortal Worldwide. This visit was for a podcast series, sponsored by Infortal Worldwide entitled Global Risk Review. Dr. Oxnevad is a seasoned expert in geopolitical risk intelligence, with a PhD in political science and a master’s degree in National Security Studies. His expertise, particularly in the Middle East and Africa region, has led him to identify numerous opportunities for US businesses, especially in the high-tech sector and water technology, following the Abraham Accords. Dr. Oxnevad acknowledges the potential risks, such as political tensions, inflationary pressures and threats to the dollar’s dominance. His insights are shaped by his extensive academic background and his role as the Director of Geopolitical Risk Intelligence for Infortal Worldwide.

Over this five-part blog post series we looked at the risk profile for US Companies doing business in the following geographic regions, the Middle East, Latin America, Russia and Ukraine, Africa and the Asia Pacific region. Over this five-part blog post series, we will review Dr. Oxnevad’s views in each one of these regions. We begin in this Part 1 by reviewing the business opportunities and risks in the Middle East.

The Middle East has undergone significant changes in recent years, particularly with the signing of the Abraham Accords in 2020. These accords have opened new opportunities for US businesses in the region, particularly in the United Arab Emirates (UAE) and Israel. However, along with these opportunities come certain risks and challenges that need to be carefully considered.

One of the key areas where US businesses can benefit from the Abraham Accords is in the high-tech sector. Both the UAE and Israel have highly advanced economies and a strong focus on technology. The normalization of relations between these countries has created opportunities for bilateral investments and partnerships. US companies looking to invest in Israel or the Gulf states can now do so with greater ease, as the need to keep economic relations separate has diminished.

Another sector that presents opportunities for US businesses is water technology. The UAE, in particular, heavily invests in Africa, where there is a high demand for water systems. Previously, geopolitical issues may have hindered collaboration between Emirati investors and US companies in providing water technology solutions in Africa. However, with the Abraham Accords, these hurdles have been removed, allowing for greater regional integration and technological cooperation.

While the Abraham Accords have opened up new avenues for US businesses, it is important to consider the potential risks and challenges that come with operating in the Middle East. One such risk is the potential for export sanctions violations, particularly in relation to Iran. US companies operating in Saudi Arabia, for example, need to be aware of the risks associated with conducting business with partners or buyers who may have ties to Iran. Thorough due diligence and risk assessments are crucial in mitigating these risks.

Additionally, the normalization of ties between Saudi Arabia and Iran, facilitated by China’s Belt and Road initiative, has implications for energy costs and potential inflationary pressures. If oil sales start getting denominated in currencies other than the US dollar, it could lead to higher energy costs and inflationary pressures. This could have a significant impact on US businesses operating in the region, as it may affect supply chains and purchasing power.

It is important for US businesses to stay informed about geopolitical developments and the potential impact on business opportunities and risks in the Middle East. Geopolitical risk intelligence and screening of partners and suppliers are essential in navigating the complex landscape of the region.

In conclusion, the Abraham Accords have created new opportunities for US businesses in the Middle East, particularly in the UAE and Israel. The high-tech sector and water technology are key areas where US companies can benefit from increased regional integration. However, it is crucial to consider the risks associated with export sanctions and potential inflationary pressures. Thorough due diligence, risk assessments, and staying informed about geopolitical developments are essential for US businesses looking to capitalize on the opportunities in the Middle East post-Abraham Accords.

I hope you will join us tomorrow when we explore Geopolitical Risks and Business Opportunities in Latin America.

You can check Dr. Oxnevad in the full five-part Riskology by Infortal podcast series here.

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FCPA Compliance Report

FCPA Compliance Report – Dottie Schindlinger on Corporate Governance and the Diligent Institute

Welcome to the award-winning FCPA Compliance Report, the longest-running podcast in compliance. In this episode, Tom Fox welcomes Dottie Schindlinger, Executive Director of the Diligent Institute.

The Diligent Institute, the governance research arm of Diligent Corporation, is on a mission to promote governance excellence by providing valuable resources and support to board members and senior leaders. Through research, thought leadership, podcasts, web shows, and certification programs, the institute addresses topics such as climate leadership, ESG, cyber risk, strategy, and AI ethics. Programs like the Next Gen Board Leaders Program and Director Network software facilitate peer-to-peer networking and board opportunities.

The Diligent Academy offers e-learning certification programs for directors, while the Diligent Forum provides a platform for directors to discuss specific themes with guest speakers. The conversation emphasizes the importance of empowering board members with the right information and insights to make informed decisions. It also discusses the changing role of directors in today’s business landscape, with a focus on digital transformation, cybersecurity, and customer satisfaction. The Diligent Institute aims to be a trusted resource for directors, providing valuable knowledge and understanding of their needs.

Key Highlights

  • Diligent Institute: Empowering Board Leaders
  • Diligent Academy and Forum
  • ESG Momentum
  • ESG Views and Director Confidence
  • The Changing Role of Directors

 Resources

Dottie Schindlinger on LinkedIn

The Diligent Institute

Tom Fox

Instagram

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Twitter

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Report from IMPACT 2023

Report from IMPACT 2023: Larry Thompson on the Evolution of Compliance

ECI’s IMPACT 2023 was one of the leading compliance events in 2023. At this conference, Tom Fox, the Voice of Compliance, was able to visit with several of the speakers, exhibitors, participants, and one group of ethically-minded Girl Scout Troop. In this limited podcast series, Report from IMPACT 2023, Tom explores many of the most cutting-edge topics in ethics and compliance through short podcast episodes. Check out the full series of interviews. You will be enlightened and informed and come away with a fuller and more thorough understanding of the most cutting-edge topics in ethics and compliance. In this episode, Tom visits with Larry Thompson, former Deputy Attorney General and well-known compliance professional. Join Tom and Larry as they delve deeper into these topics on this episode of the Report from Impact 2023.

Larry Thompson is a seasoned professional in the field of compliance, with a career that spans several decades, starting as a young lawyer working with defense contractors in the late 1980s. Thompson’s unique insights on the evolution of compliance programs and ethical culture stem from his firsthand experience of the shift from a rules-based, legalistic approach to a values-based approach. He emphasizes the importance of companies having a common set of values that employees can embody and reflect in their actions, contributing to their long-term sustainability. Thompson also acknowledges the changing values and expectations of the new generation of employees, who prioritize working for companies that align with their own values and have a culture of integrity and purpose. These insights were shaped by his involvement in the establishment of the organizational Sentencing Guidelines in the early 1990s and his roles as a board member of various public companies and an active participant in the National Association of Corporate Directors.

 Highlights Include 

·      The evolution of compliance programs

·      The role of the DOJ in compliance

·      A new generation in the workforce

 Resources 

Larry Thompson

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31 Days to More Effective Compliance Programs

One Month to More Effective Written Standards: Day 4 – Code of Conduct: Structure and Format

Next comes the evolution of the structure and format of a best practices Code of Conduct. Initially, my experience with this is that they were written by lawyers, largely for lawyers. This included ‘thou shalts’ and ‘thou shalt nots’ liberally sprinkled throughout a lengthy written document. This was what is now referred to as Code 1.0. The compliance community then evolved to Code 2.0, where the writing was less turgid, moved to more employee-friendly language, and then somewhere along the line we started putting in hyperlinks, pictures, and videos.
There are two factors that a company should consider in the structure of a Code of Conduct. The first is to consider how your organization generally communicates, overlaid with the most effective way to communicate with the various stakeholders who will read and use it. These stakeholders can include such diverse groups as employees, shareholders and third parties on both the sales and supply side of your business. This may require multiple approaches.
Be sure to make your code readable. This is beyond simply eliminating legalese. It is writing English at a grade level that is sufficient for your employee population. It may be that an eighth-grade language level is appropriate for your workforce. However, if you have a population consisting primarily of professionals, translating it into the appropriate languages it might be appropriate to aim for a higher level of language. Finally, you do not have to say the same thing, in multiple different ways.

Three key takeaways:

  1. Companies have moved past having a Code of Conduct written by lawyers for lawyers to a fully interactive code for all employees.
  2. Consider how information is distributed at your organization as a basis for communication in your Code of Conduct.
  3. Your Code of Conduct must be readable, in both in English and native language for non-English speaking employees.

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