Tag: compliance

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This Week in FCPA

This Week in FCPA-Episode 149 – the White Privilege edition

After a week hiatus, the lads are back. While debating white privilege and the Varsity Blues scandal, they also take a look at some of this week’s top compliance and ethics stories which caught their collective eyes this week.

  1. Guilty pleas begin in the Varsity Blues scandal. Antonio Blumberg report in the Huffington Post. For those who did not plead guilty, additional charges filed. Melissa Korn reports in the Wall Street Journal. Jay interviews Justin Paperny about the Varsity Blues sting, in Corporate Compliance Insights. For one of the best and fullest explanations of the white privilege component, see Caitlan Flanagan’s article in The Atlantic.
  2. Does your company lack integrity? Mike Volkov gives 5 signs which show it does, on Corruption, Crime and Compliance.
  3. Standard Chartered joins the $1 bn fine club. Emily Flitter reportsin the New York Times. Jon Rusch takes a deep dive in Dipping Through Geometries.
  4. What is the intersection of DD and AI? Merritt Smith considers in the FCPA Blog.
  5. OFAC enforcement action demonstrates need for pre-acquisition due diligence? Lawyers from Paul, Weiss in the NYU Compliance and Enforcement Blog.
  6. What is ethical AI? Tom Austin explores on the Analyst Syndicate.
  7. What are the shifting reasons for FCPA enforcement? Kevin Keller on the Global Anti-corruption Blog.
  8. What are the risks to investors in Uber? Shannon Bond reports in the Financial Times. (sub req’d)
  9. This week Tom explores the intersection of Shakespeare and Compliance through the lens of King Lear. Check out the following: Part 1-Innovation;Part 2– Changing Your Focus; Part 3– Engaging Your Audience; Part 4-a Different Interpretation; and Part 5-The Fool.The podcast is available on multiple sites: the FCPA Compliance Report, iTunes, JDSupra, Panoplyand YouTube. The Compliance Podcast Network is now also on Spotify and Corporate Compliance Insights.

Tom Fox is the Compliance Evangelist and can be reached at tfox@tfoxlaw.com. Jay Rosen is Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com.
For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

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Innovation in Compliance

Making Compliance Training Fun with Andrew Rawson


What if compliance training didn’t have to be boring? Joining us on this episode is Andrew Rawson, the Chief Learning Officer for Traliant, a compliance training company. Today we’re talking about the future of compliance training: how to make it truly effective, useful, and even fun.

The importance of training
The last couple of years have seen the intersection of two seismic forces that have created tremendous demand for quality training. The first was the #MeToo movement, which has brought up the whole topic of compliance training around sexual harassment — so much so that it’s become a need to have instead of a nice to have, even in states where it isn’t required. The second was a change in regulations in different states across the country, now requiring more than 10 million people to be trained.
Effective compliance training
There is a difference between teaching people about the law and teaching them what to do. At Traliant, they wanted to train people how to behave. What do you do when you’re faced with a particular situation? That should be the focus.
The training is also intentionally more modern: well-designed interfaces, interactive videos, professional actors, point systems, getting senior management to record training segments for their peers  — all of which help make learning more engaging.
An important part of making training effective is making sure that people are encouraged to speak up, and that when they do, they’ll be protected. You might not be able to stop bad actors, but you can encourage witnesses to point out the behavior.
Moving away from check-the-box training
Much of compliance training is very check-the-box: a once-a-year thing that companies do to get it over with. But that’s not an effective approach. Traliant has gone from doing one-and-done sessions to creating a more holistic training approach. Examples are 15-20 minute courses for managers involved in investigations and two-minute training videos on dating in the workplace that they call “sparks” — because they’re meant to spark conversations.
Preventing Workplace Sexual Harassment: 4 Top Trends for 2019

  1.  The Equal Employment Opportunity Commission (EEOC) is keeping workplace harassment training front and center, remaining one of its top priorities.
  2. Harassment training continues to evolve, and we’re seeing a shift from helping companies avoid liability to helping people behave properly.
  3. Training is highly state-driven, given their different requirements. So Traliant has built a platform where people can access the training relevant to them, instead of a one-size-fits-all course.
  4. There is a focus on building respectful, inclusive work cultures that embrace compliance training not because they have to, but because they want to.

Resources
Andrew Rawson (LinkedIn)
Traliant (Website)
Preventing Workplace Sexual Harassment: 4 Top Trends for 2019

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Compliance Into the Weeds Daily Compliance News

Compliance into the Weeds: Episode 118-Hotline Metrics

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly (the coolest guy in compliance) and I take a deep dive into recently released NAVEX Global 2019 Ethics & Compliance Hotline Benchmark Report. We consider the details from the report and ask the following question “are you using all the right intake channels to capture a true sense of misconduct and corporate culture at your organization?” Some of the highlights include:

Some of the highlights include:

  • What are the intake channels available to your organization?
  • If you are only tracking complaints through a formal system, you may well be missing a wider variety and rich source of information.
  • Moving your intake past simply what the law requires will give you a much better accounting of your organization’s culture.
  • How can you improve your intake?
  • Has closure time for reported increase or decrease?
  • What has been the continued impact of #MeToo?

For more reading check out Matt’s blog post “Hotline Metrics-are you missing any?”
To read the full NAVEX Global 2019 Ethics & Compliance Hotline Benchmark Report, click here.

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Shakespeare on Compliance

Shakespeare on Compliance – Engaging Your Audience

I recently saw the performance of King Lear with Glenda Jackson as the mad king. It was a magnificent production and if you have the chance to see, I would certainly urge you to do so. The production had many interesting features and interpretations which seemed to be great entrees into several compliance topics. The play was directed by Sam Gold and it was scored by Phillip Glass but the star power was derived from Jackson as King Lear. It was a fabulous take on the story and one that will resonate directly to our turbulent times. Therefore, inspired by octogenarian Jackson and her performance, I am going to use King Lear as a deep dive into several compliance topics this week. In this episode, I want to discuss the opening scene where Lear bids his daughters express the breadth and scope of their love for him.

Lear has called a conference to divide his kingdom between his three daughters, Goneril, Regan and Cordelia, his youngest who is clearly is favorite. Goneril professes her love is more than words alone can convey, saying “A love that makes . . . speech unable / Beyond all manner of so much I love you”. Regan professes, “Myself an enemy to all other joys, Which the most precious square of sense possesses, And find I am alone felicitate in your dear Highness’ love.” However, Cordelia refuses to play the flattering fool. Her father twice gives her the opportunity to redress this decision but she holds firm saying “Nothing, my lord”. This leads to the break in the family, the deaths of the sisters and the fullest scope of tragedy.
Why do you need to engage your audience? I thought about this in the context of the Foreign Corrupt Practices Act, compliance and regime change. This is not Saddam Hussain regime change where the US government invades a country to throw out the old boss. This is a democratically elected-peaceful transfer of power. However, it now appears that regime change now means corruption investigations which impact not only the FCPA but also US companies. Every compliance officer needs to aware of this new reality. Take three recent regime changes, together with what they have meant; and perhaps one to come.

  1. South Africa
  2. Malaysia
  3. Brazil
  4. Venezuela

The bottom line is that every Chief Compliance Officer (CCO) must now watch local politics much more closely. If you are doing business in a high-risk country and there are new leaders brought in through democratically elected regime change, your company had better be ready for a robust corruption investigation. Certainly if Malaysia, South Africa and Brazil are any indication, prosecutors from nations with new regimes may well share their findings with the US Department of Justice (DOJ). This means that regime change could lead directly to a FCPA investigation, where the disclosure was by a foreign government and not the company self-disclosing. If there is no self-disclosure, a company is not eligible for the declination under the 2017 FCPA Corporate Enforcement Policy.

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Shakespeare on Compliance

Shakespeare on Compliance – Changing Your Focus

I recently saw the performance of King Lear with Glenda Jackson as the mad king. It was a magnificent production and if you have the chance to see, I would certainly urge you to do so. The production had many interesting features and interpretations which seemed to be great entrees into several compliance topics. The play was directed by Sam Gold and it was scored by Phillip Glass but the star power was derived from Jackson as King Lear. It was a fabulous take on the story and one that will resonate directly to our turbulent times. Therefore, inspired by octogenarian Jackson and her performance, I am going to use King Lear as a deep dive into several compliance topics this week.  In this episode, I want to discuss how this production changed the focus of the play, away from the madness of the king to the actions of the three daughters.

Perhaps it was my perception of the play or perhaps it was the director’s intention but the focus in the first half of the play was clearly on the daughters and their families. Both Goneril and Regan played much more prominent roles throughout the first scene and their joint liaisons with Edmund, later the Earl of Gloucester, were key components of this production. Moreover, their husbands, the Duke of Cornwall and the Duke of Albany, also played prominent roles. The Duke of Cornwall, for instance his role in this production was more than the traditional highlight for him, which is the blinding of the original Earl of Gloucester. (Even in this production it still elicited gasps from the audience.)
Even after the intermission, where some of the most powerful scenes in all of Shakespeare playout, including the blinded Earl of Gloucester and the mad Lear wandering the moor, this production held a distinct focus on Lear’s daughters and their families, adding in the complexity of Edmund, the new Earl of Gloucester, having an affair with Goneril while secretly pledged to wed Regan.
In the most recent Harvard Business Review (HBR), Scott Berinato writes, in an article entitled “Data Science and the Art of Persuasion”, that most companies are not getting the value from data science initiatives and prescribes ways to remedy this phenomenon. Last year, at Compliance Week 2018, Hui Chen said on a panel that she expected the compliance team of the not-so-distant future would have a data scientist. As with most of her pronouncements, she was way ahead of the crowd.
You must start with the premise that most CCOs and compliance professionals are legally trained, usually without any data analytics classes in law schools still operating under the Socratic Method. Even if a stat class is thrown in somewhere along the way in undergrad, grad school or even through some business school outreach to law students, that does not begin to prepare someone to understand the insights available through advanced data analytics. The key is to build a better data science operation. There are four suggestions, with the over-arching theme of defining the talents you need to understand and communicate the data.

  1. The unpacking of data and creation of insights is a skill.
  2. Data wrangling.
  3. Expertise.
  4. How to communicate the information.
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Shakespeare on Compliance

Shakespeare On Compliance – Innovation

I recently saw the performance of King Lear with Glenda Jackson as the mad king. It was a magnificent production and if you have the chance to see, I would certainly urge you to do so. The production had many interesting features and interpretations which seemed to be great entrees into several compliance topics. The play was directed by Sam Gold and it was scored by Phillip Glass but the star power was derived from Jackson as King Lear. It was a fabulous take on the story and one that will resonate directly to our turbulent times. Therefore, inspired by octogenarian Jackson and her performance, I am going to use King Lear as a deep dive into several compliance topics this week. Today, I want to use the nature of the production, to introduce the day’s topic of innovation in compliance.

Gold’s Lear production was both unique and innovative. It was quite a large stage but the lightening was used to great effect. When the director wanted to shift the action, to another group of actors or topic, the lights were simply shut off to the actors not involved. They did not have to exit the stage and then return. This allowed them to remain on stage and the action could move back and forth without disruption.
The second innovation was in the use of music. While I am generally not a fan of music in Shakespeare, unless used in the original show notes, such as bugles blaring; I am not a fan of music in the performances. However there was a classical quartet which played throughout the performance that I felt truly enhanced the entire production. Finally, I normally revolt at any singing in a Shakespearian production. There were a couple of singing scenes which almost worked for me but at least they did not detract from the overall performance.
I thought about this in the context of how to move compliance innovation into the corporate pantheon of greater business process efficiency when I read a recent MIT Sloan Management Review article, entitled “Grow Faster By Changing Your Innovation Narrative”, by George S. Day and Gregory P. Shea. In the article they discussed their findings that organizations that sustain growth “faster than industry rivals articulate a coherent, compelling innovation narrative and rely on four powerful levers to make it a reality.” They posited four key levers for doing so which I believe would work well for a compliance function to sustain innovative growth within an organization and with its customer base, i.e. employees. I have adapted their piece for such an exercise.
The first lever is to invest in compliance talent.
The second lever is encouraging prudent risk taking.
The third lever is to adopt a customer centric process.
The fourth lever is aligning metrics and incentives with innovation activity.
The bottom line is that senior management is well-versed in the need for innovative and effective compliance. By using these four levers, a compliance practitioner can help senior managers to focus the organizations compliance efforts. The authors conclude by stating, “A growth-affirming  innovation narrative and the four levers that make it manifest within a company can help leaders focus and prioritize their innovation efforts. The process of identifying and articulating the narrative is essential to understanding the culture of innovation within a company and envisioning what it can achieve. The levers bring that narrative to life. Without them, organic growth leadership in any industry is a hit-or-miss endeavor.”

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Modern Medium

Welcome Modern Medium to the Compliance Podcast Network

I am pleased to welcome to the Modern Medium Podcast to the Compliance Podcast Network! In this new podcast Paris Fox leads a discussion on about the tools, strategies, tactics, and possibilities in modern medium design. In our first episode, we’re exploring ideas: how they form, how they change, and how we might incorporate those ideas into graphic design. Every compliance practitioner should listen to this podcast to help improve their messaging with a sharp millennial point of view.
Episode 1-Introduction
The creative process and coming up with ideas
When you’re stuck in a creative rut, it’s difficult to know where to begin with an idea. Even when you dohave an idea, it’s easy to get caught up in what you think something is supposed to be or what it’s supposed to look like. So it’s an important part of the process to learn how to let go. Ideas can come from anywhere. You can think of anything as a base point and go from there with it. Think about what you knew before, think about what you know now, and think about how things have changed. This doesn’t have to go anywhere tangible; you can use this as a brainstorming exercise or mind map and take off from it.

Episode 2-Incorporating Time into Art

Thinking about time
Pick a sense, and spend 24 hours being fully aware of it. For example, what are the sounds that you experience when you go to class? As you go home? Or commute to work? Just begin to acknowledge the way you’re moving through time, because it’s easy not to think about. Documentation is also critical: it’s easy to experience and acknowledge these things, but how are you going to see how they’ve changed over time if you don’t document it?
Episode 3-Making Art a Sensory Experience
On this episode of the Modern Medium Podcast, we’re exploring our senses: while it’s common for art to have visual and aural components, we don’t normally think about art in terms of smell, taste, or touch. But art is supposed to imitate life, and within life, we experience these all at once. How then can we make art a sensory experience?
Episode 4-Are You Creating Barriers to Your Art
Barriers
On this episode of the Modern Medium Podcast, we are exploring barriers: might artists inadvertently create these barriers to their art? And how does this affect its experience? Barriers can be anything: a blind person who can’t see the art, or someone with a learning disability who might not understand the art in the way that it was intended. But they can still experience art in other ways that you might not expect, and so in this way, art can be accessible to anybody. It’s just a matter of creating that space.
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Innovation in Compliance

Innovation in Compliance-Part 3: Third Party Expansion

We are on Episode III of special five-part podcast series on an innovative approach to managing third party risk. This week I am joined by James H. Gellert, the Chairman and Chief Executive Officer (CEO) of RapidRatings International Inc. (RapidRatings), the sponsor of this special series. Our conversation is about helping companies manage their third-party supply chains through financial health. The RapidRating approach is incredibly innovative, with a series of products and services that should be considered by the compliance practitioner. In today’ episode, we discuss the issue of third-party expansion.

We began with a consider of the definition of third-party. Gellert related, “Historically, people talked about simply an entity outside of your organization as a third party. However, that definition is broadening, to mean really that entity with which your company works.” Obviously, this can be a supplier or vendor, it can be a service provider, a customer, a joint-venture (JV) partner and/or an intercompany affiliate. A broader view could include intercompany affiliates as third parties, even though many people would see them as just being another entity inside of a business. Gellert said, “the definition of third parties is expanding, which only makes life more complicated for anyone trying to do third party risk assessments and then the tiering just creates an exponential change.”
Specifically, “in supply chain, a tier one supplier is one of the suppliers your organization is directly purchasing from. Next a tier two is one that your company’s tier one is buying directly from. This means for risk managers assessing the various risks of their supply chain have to go deeper and deeper. One way to do so is through trying to understand the connection between tiers one, two, three, four and so on. The problem is there are many risks that companies do not manage because they cannot identify which companies are taking risks.” Gellert further noted, “one of the hottest topics in 2019 for a supply chain and risk managers is trying to get their arms around how to handle this particular question.”
I asked Gellert how would he suggest a supply chain professional began to think through some of these issues articulated but in the context of a global supply chain? He began by stating, “anyone who is involved in third party or supply chain risk management needs to try to map out and understand the suppliers whose exposure they need to assess for their organization.  Obviously, this includes both direct and indirect suppliers but in terms of the tiering, the best way for anyone to understand the supply chain risk is to have really good communication with their tier one suppliers to be able to discuss the risks to both businesses.”
Moreover, “this means communicating with a tier one supplier about who their tier ones are that are providing product or service that are coming to that client. Only with that type of transparency and communication can businesses look through the tier one into the sub tiers to understand the risk your organization has and where there may be a risk concentration. Without effect communication and dialogue, created and fostered as part of the relationship, people are going to fly blind.” Finally, in this global economy with such internationalization and diversification of supply chains, organizations you “really do need to pull out all the stops to try to manage risk. Communication is one of the first places to start.”
Gellert concluded with some thoughts on transparency, which he believes is not only important but “should be applied everywhere.” He said you should begin with your tier ones but the ability “to look deeper into the supply chain is also really important.” Further, Gellert said, “a lot of supply chain risk professionals can go wrong if they use transparency as a bludgeon as opposed to as an opportunity. Then the company they are asking for information from only sees risks in disclosing information as opposed to seeing commercial value and we promote transparency as a means to commercial value.” But it is more about fostering the relationship so that you can adequately assess and then manage the risk. Gellert noted, “that’s the key part, that people have to embrace if they’re going to be able to look deeper into their supply chains.”
Please join us tomorrow when we consider some of the challenges Gellert is seeing in supply chain risk management for 2019 and going forward.
This podcast series is sponsored by Rapid Ratings International, Inc. For more information, check out their website at www.rapidratings.com.

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This Week in FCPA

This Week in FCPA-Episode 148 – the Hope Springs Eternal edition

As Opening Day near and the Astros are predicted to unseat Jay’s Red Sox to win the 2019 World Series, both lads are eternally hopeful for their hometown heroes. While debating this issue, they also take a look at some of this week’s top compliance and ethics stories which caught their collective eyes this week.

  1. Former Hong Kong official sentenced for FCPA violations. Harry Cassin reports in the FCPA Blog. Matthew Goldstein reports on how to reduce your FCPA sentence in the New York Times.
  2. SEC awards two whistleblowers $50MM. Kristin Broughton in the WSJ Risk and Compliance Journal. Matt Kelly takes a deep dive in Radical Compliance. Doug Cornelius gets snarky in Compliance Building. Jonathan Marks weighs in on Board and Fraud.
  3. Jonathan Ruschand William Weaver debate whether corruption can be measured. Both on the FCPA Blog.
  4. Was it fraud or was it incompetency? The HP v. Autonomy civil trial begins in London. The BBC
  5. What is the difference in whistleblowing and extortion? Joe Mont explains in Compliance Week. (sub req’d)
  6. What are your supply chain risks? Russ Berland explores in Part 1 of a two-part blog post series on Corporate Compliance Insights.
  7. Looking at enforcement of financial market crimes in Canada and UK. Anita Anand reports in NYU’s Compliance and Enforcement Blog.
  8. What steps can you take to reduce whistleblower retaliation? Matt Kelly opines in Navex Global’s Ethics and Compliance Matters
  9. OECD slams Canadian government for interfering in SNC-Lavalin corruption investigation. Jonathan Rausch reports in Dipping Through Geometries.
  10. Join Tom and AMI’s Jesse Caplan for a 5-part exploration of emerging issues in healthcare compliance and monitoring. Check out the following: Part 1-Opioid Crisis-Legal issue; Part 2– Opioid Crisis-compliance solution; Part 3– the regulators; Part 4-the monitoring healthcare organizations; and Part 5-proactive monitoring. The podcast is available on multiple sites: the FCPA Compliance Report, iTunes, JDSupra, Panoplyand YouTube. The Compliance Podcast Network is now also on Spotifyand Corporate Compliance Insights.
  11. In Houston on April 11? Join the Greater Houston Business and Ethics Roundtable for a presentation for one year look back on GDPR. Registration and information are here.
  12. Check out the latest edition of Great Women in Compliance where Mary Shirley visits with Marianne Ibrahim.

Tom Fox is the Compliance Evangelist and can be reached at tfox@tfoxlaw.com. Jay Rosen is       Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com.
For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

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Popcorn and Compliance

Popcorn and Compliance: Captain Marvel

In this podcast series, recovering screenwriter (and Mr. Monitor) Jay Rosen and myself will indulge in passion for the movies by looking at them through the lens of compliance. Jay is a contemporary movie fan and I am more of a classic movie maven so we present a well-rounded view of the movie fandom. If you want to indulge in your love for the movies with two guys who are passionate about Hollywood and get some ideas for your compliance program, this is the podcast series for you.For this week’s offering, today we look at the Marvel-universe hero, Captain Marvel.

Some of the highlights include:

  • What is the backstory for Nick Fury and Phil Coulson?
  • How and why did internet trolls tried to sabotage the film?
  • What was the response of Rotten Tomatoes?
  • How were Eggs used to great effect?
  • The special effects and battle scenes were great.
  • Who was honored in different scenes in the movie?
  • Jay gives the movie not only a full bucket of popcorn but as second bucket as well. Tom joins with an overflow bucket of popcorn.

The Compliance takeaways:

  1. Understand where you come from, know your business inside and out.
  2. Nick Fury recognized a new risk-do you have a trip system for new risks in your organization? Do you have a seat at that table?
  3. How and why did Nick Fury lose his eye? How do you assess known strategies for unknown risks?
  4. Get out of the corporate office and into the field to meet your employees.
  5. Take action, when needed to change the balance.
  6. As a CCO you may have to take a stand.