Tag: compliance

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Innovation in Compliance

Building a Stronger Culture of Compliance Through Targeted and Effective Training: Part 5 – The Role of the Board

Welcome to a special 5 part podcast series on building a stronger culture of compliance through targeted and effective training, sponsored by Diligent. Over this series, I will visit with Kunal Agrawal, Director of Customer Success at Diligent; Kevin McCoy, Customer Success Manager at Diligent; Jessica Czeczuga, Director, Compliance and Ethics at Diligent; Andrew Rincón, Client Director at Diligent; and David Greenberg, former CEO and Special Advisor at LRN and Director at International Seaways. Over this series, we will consider the importance of ongoing communications, the value of targeted training, training third parties, and the role of the Board of Directors. In this concluding Part 5, we consider the role of the Board of Directors in a compliance program with David Greenberg.

In this episode, Greenberg discusses the board’s legal obligations, emphasizing their duty to exercise reasonable oversight over potential misconduct and failures of compliance with law and policy. The podcast also delves into the importance of integrating compliance programs into a company’s overall strategy and developing strong relationships with senior management, such as the chief legal officer or chief compliance officer. Listeners will learn the importance of finding the right committee to oversee compliance obligations and utilizing outside experts for insight and guidance. This conversation is essential for board members and executives who want to ensure accountability, initiate change, and drive organizational success. Don’t miss out on this informative and engaging episode of “The Role of the Board” episode.

Key Highlights:

  • Legal obligations and oversight for corporate boards
  • Importance of integrating compliance into the company culture
  • Board Oversight and Relationship Building with CCO
  • The Significance of Outside Perspectives for Boards

Notable Quotes:

“There is a strong obligation on boards to exercise reasonable oversight over all potential misconduct and failures of compliance law and policy should a reasonable board has known and taken steps…should that body have known and should it have done more than it did.”

“Boards principally should be asking tough questions and following up on those questions.”

“Anything that is not integrated into the real levers and machinery of the business will not be successful.”

“That chief compliance officer who knows the head of the audit committee or compliance committee or governance committee is much more able and comfortable picking up the phone and saying to the chair, Houston, we’ve got a problem.”

For more information go to Diligent.com

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program with Boards – The Board Role in Hiring

What is the role of a Board of Directors in hiring senior executives, CCOs, and even other board members? I explored this issue with Candice Tal, who began by noting, that bad senior executive hires can cost a company much more than simply dollars. She related, the “financial costs in day-to-day operations easily can quadruple that of a regular employee, but it can also impact the company’s corporate governance and board of directors if that executive hire was found to be involved with unethical and illegal activities. Not even a signed contract can protect a company if an executive hire’s unethical actions come to the attention of the national media. Fiduciary risk and exposure for the board of directors cannot be overlooked.”

She pointed to the example of Yahoo! and its hire of Scott Thompson. It turned out that Thompson had incorrect information in his online biography regarding his academic credentials. The “implications went beyond the activist shareholder accusations to reflect on the Board of Directors for not vetting his background more carefully. The company may have been exposed to claims of providing false information to the SEC and potential stockholder lawsuits. Thompson’s 120-day tenure at Yahoo! cost the company over $7 million and seriously tarnished the company’s reputation in the business community.”

The key is that a company engages in an executive due diligence investigation rather than simply a routine or even executive-level background investigation. Tal explained that an executive background search is “typically limited to a five-component review of criminal records, employment verification, degree or education verification, social security validation, address verification and sometimes credit history.” Such searches are “very limited searches.”

Conversely, executive due diligence, “looks in-depth at all available public records sources: criminal history, civil litigation issues, financial and legal issues, relationships with other companies and board advisory positions, reputation, misrepresented education and overstated work history, behavioral history (for example litigiousness), and, in particular, undisclosed or adverse issues.” While it is generally “more costly than executive background checks and takes more time, the information gathered is extremely valuable and can save a company substantially more. A high-quality due diligence review can find important information which would not be returned in a routine executive background check.”

Infortal has found that up to 20% of executive search candidates fail a deep-level due diligence investigation. Now consider how many senior executive slots your company has and add to that Board of Directors seats and you can quickly see the risk of failure to consider an executive due diligence search when promoting or hiring. Moreover, you need executive-level due diligence in other business situations as well, including the senior management of new business acquisitions brought into your organization through a merger or other acquisition, selecting new Board members, screening the corporate Board of Directors, and of course, for third party business partners and other agents in the sales and supply chain channels. 

Three key takeaways:

  1. The costs of a bad executive hire can far exceed the dollar loss.
  2. Do not forget the differences between an executive background check and executive level due diligence.
  3. 20% of all senior executives fail an executive level due diligence check.

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

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2 Gurus Talk Compliance

2 Gurus Talk Compliance – Episode 8 – Florida Man

What happens when two top compliance commentators get together? They talk compliance of course. Join Tom Fox and Kristy Grant-Hart in 2 Gurus Talk Compliance as they discuss the latest compliance issues in this week’s episode! In this episode, they discuss whether a compliance crisis is coming, a new compliance law in the UK, and why companies may be dialing down their public statements on ESG and DEI. They also delve into a survey on compliance concerns, the importance of preventing corruption in Ukraine, and the creation of a Department of Justice corporate crime database. With exciting stories like a bizarre crime tale and insight into the controversial Wall Street Journal article, this episode will keep you engaged and informed. Don’t miss out on this opportunity to improve your compliance.

Highlights Include

·      Corporate Compliance in a Time of Budget Cuts

·      Preparing for UK’s New Economic Crime Offense

·      Compliance and ESG in corporate culture

·      Managing Unwanted Change in Compliance

·      Legal issues of cryptocurrency exchange

·      Rebuilding Ukraine: Business Opportunities and Corruption

·      Stress-free Workplace Priorities

·      Corporate crime database

·      Florida Man strikes again 

Resources 

1.     Compliance Crisis Coming?

2.     2023 Global Compliance Risk Benchmarking Survey

3.     Managing Unwanted Change

4.     Ukraine and Corruption

5.     DOJ launches corp crime data base

6.    Florida Man Strikes Again (Honorary Darwin Award nominee as well)

7.    How Great Companies Give Their People What They Want

8.    DOJ Drop SBF FCPA Charges

9.    Companies Quiet Diversity Talk

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Principled Podcast

Principled Podcast – S9 E18 – What Compliance Leaders Need to Know About Modern Slavery

What you’ll learn on this podcast episode

Modern slavery is on the rise, and criminal organizations are becoming more sophisticated about it. According to the International Labor Organization, more than 28 million people experienced forced labor in 2021. That’s equivalent to the entire population of Australia. What can be done about it? How can ethics and compliance professionals make a difference? In this episode of LRN’s Principled Podcast, LRN Global Head of Segments, Matt Plass, talks with Jacob Sims from the International Justice Mission in Cambodia, who has been working actively to address modern slavery in Southeast Asia. Listen in as the two discuss how Jake’s work as county director combines investigators, lawyers, social workers, and programmatic and operational staff in the fight against violent labor exploitation.

Guest: Jacob Sims

Jacob Sims – Grayscale

Jacob Sims has worked on human rights and development challenges facing Southeast Asia for over a decade—spanning issues from governance in the Philippines to internal displacement in Northern Myanmar to labor rights in Cambodia. He currently serves as country director of the International Justice Mission (IJM) Cambodia where he leads a team of investigators, lawyers, social workers, and programmatic and operational staff in the fight against violent labor exploitation. Concurrently with his role at IJM, he serves as a non-resident fellow at Duke University’s Kenan Institute, a leading research center working to understand and address real-world ethical challenges facing individuals, organizations, and societies worldwide. Sims’ team at IJM mounted one of the earliest programmatic responses to the human trafficking epidemic emerging within scamming compounds in Cambodia and has helped facilitate the rescue of over 100 individuals to date. In recent months, analysis from Sims on the emerging global phenomenon has featured in The Economist, The Guardian, LA Times, Al Jazeera, VICE World News, Sydney Morning Herald, ProPublica, and Channel News Asia, amongst many others.

Host: Matt Plass

Matt Plass – Grayscale

Matt Plass is the global head of segments at LRN. He was formerly chief executive officer with Interactive Services, where he led the executive team responsible for bringing Interactive Services’ award-winning integrity, ethics, and compliance learning solution to market. Matt has an extensive background in e-learning, blended learning, classroom education, and learning design for adult audiences and has engaged with numerous Fortune 500 organizations in the design of learning solutions for global audiences. He provides advanced learning expertise to partners and is a regular speaker at learning and development conferences. Matt led Interactive Services through its acquisition by LRN in 2020. He lives in Devon, England.

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program with Boards – Boards and Doing Business in China

The Administration’s trade war with China has highlighted the risks of both doing business in China and investing in the Chinese companies which come to America to raise capital. Yet this has been a long-known and outstanding problem in the anti-corruption enforcement world. The 2014 bribery and corruption case of GlaxoSmithKline PLC (GSK), which resulted in a $490 million fine for the firm, resonated across the corporate globe. While many questions are still unanswered, one that seems to be at the forefront of the inquiry was where was the GSK Board of Directors. This matter demonstrates that the role of a Board of Directors is becoming more important and more of a critical part of any effective compliance program.

In an NACD Directorship article, entitled “Corruption in China and Elsewhere Demands Board Oversight”, Eric V. Zwisler and Dean A. Yoost note, “Boards are ultimately responsible for risk oversight” any Board of a company with operations in China “needs to have a clear understanding of its duties and responsibilities under the FCPA and other international laws, such as the U.K. Bribery Act”. Why should China be on the radar of Boards? From 2010-2019, over 25% of all FCPA enforcement actions derived from China, that’s why.

FCPA enforcement actions have made clear that numerous Chinese businesses have proven adept at appearing compliant while hiding unacceptable business practices. A Board should be aware that a well-crafted compliance program must be complemented with a thorough understanding of frontline business practices and constant auditing of actual practices, not just a paper compliance program. This means that both monitoring and auditing should be visible to the Board.

Three key takeaways:

  1. China presents the highest FCPA risk and after GSK, domestic law corruption risk as well.
  2. Chinese companies have been adept at hiding corrupt business practices from their western owners.
  3. A Board must be cognizant of these risks and enhance their risk management process in China and other high-risk jurisdictions.

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

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Innovation in Compliance

Building a Stronger Culture of Compliance Through Targeted and Effective Training: Part 4 – A Training Program for 3rd Parties

Welcome to a special 5 part podcast series on building a stronger culture of compliance through targeted and effective training, sponsored by Diligent. Over this series, I will visit with Kunal Agrawal, Director of Customer Success at Diligent; Kevin McCoy, Customer Success Manager at Diligent; Jessica Czeczuga, Director, Compliance and Ethics at Diligent; Andrew Rincón, Client Director at Diligent; and David Greenberg, former CEO and Special Advisor at LRN and Director at International Seaways. Over this series, we will consider the importance of ongoing communications, the value of targeted training, training third parties, and the role of the Board of Directors. In this Part 4, we discuss how to put together a training program for third parties with Andrew Rincón.

Join Tom Fox in an exciting episode about building a stronger culture of compliance through targeted and effective training as he interviews Andrew Rincón. Discover how the compliance industry has evolved and how technology has significantly improved compliance programs. Find out how efficient compliance processes create goodwill for compliance professionals and make them true partners of the business with the help of technology and reliable due diligence partners. Andrew Rincón shares Diligent’s screening and monitoring options for third-party suppliers and the customized anti-bribery and anti-corruption training, available in multiple languages, also perfect for bite-sized, animated micro-learnings. Tune in to learn how to educate distributors and internal gatekeepers on compliance and useful resources for compliance professionals, only on a training program for 3rd parties.

Highlights Include:

  • The Role of Compliance with Distributors
  • Efficient Due Diligence for Distributors
  • Diligent’s Anti-Bribery and Sanctions Screening Solutions
  • Compliance Training & Internal Controls for Distributors
Notable Quotes

“And commission sales agents are certainly recognized as, if not the highest, a high risk, under the FCPA and other compliance regimes.”

“One area the thinking has evolved on, and it sounds like your career and my career, is that due diligence alone is insufficient.”

“So being as efficient as a process. And nowadays, everything moves at the speed of light.”

“But nowadays, with the amount of information that gets published every single day throughout the world, where there’s so much content out there.”

For more information, go to Diligent.com

Join us tomorrow as we conclude our series with a look at the role of the Board of Directors in a compliance program.

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Blog

Building a Stronger Culture of Compliance Through Targeted and Effective Training: Part 3-Defining the Effectiveness of Compliance Training

Welcome to a special 5 part blog post series on building a stronger culture of compliance through targeted and effective training, sponsored by Diligent. Over this series I will visit with Kunal Agrawal, Director of Customer Success at Diligent; Kevin McCoy, Customer Success Manager at Diligent; Jessica Czeczuga, a Principal Instructional Designer; Andrew Rincon, Global Accounts Management Advisor at Diligent; and David Greenberg, former CEO and Special Advisor at LRN and Director at International Seaways. Over this series, we will consider the importance of ongoing communications, the value of targeted training, training third-parties, and the role of the Board of Directors. In this Part 3, we consider the always challenging topic of defining the effectiveness of training with Jessica Czeczuga.

The Department of Justice (DOJ) requirement for ‘effective’ training is one of the most challenging areas for compliance professionals. Fortunately, Jessica Czeczuga is a highly respected Principal Instructional Designer with a remarkable 25-year career in the learning and development field and as a seasoned content creator, Jessica has collaborated with numerous experts to create effective training programs that resonate with different learning styles. I was able to visit with her on some of the key steps to get Improved training effectiveness through micro-learning and metrics.:

1. Adopt micro-learning techniques for content delivery
2. Utilize interruptive training methods for behavior disruption
3. Tailor targeted training for at-risk employees

1. Adopt micro-learning techniques for content delivery. Adopting micro-learning techniques is an essential approach for effectively delivering content to learners, particularly in the realm of compliance training. Micro-learning encompasses the practice of focusing on quick, digestible, and repetitious bursts of learning that serve to reinforce essential concepts while being easily accessible to learners. This method deviates from traditional lecture-style training, power point induced traing and allows for an interruptive and integrative learning experience that caters to the needs of varying learners. Leveraging micro-learning as a tool for training purposes allows for a higher likelihood of information retention and eventual behavior modification, as it allows individuals to reflect on their own learning patterns and apply the concepts in a more seamless way.

Czeczuga believes that by utilizing metrics such as pre and post-test scores and survey feedback to determine the effectiveness of training and cater the approach accordingly, highlighting the importance of collaboration between the compliance and training departments in this process. The adoption of micro-learning for compliance training holds significant importance as it ensures that all employees have a comprehensive understanding of relevant concepts and principles. Given that this understanding forms the basis of an organization’s culture of compliance and ethics, it is crucial to ensure that the training methods employed are effective in communicating this information.

2. Utilize interruptive training methods for behavior disruption. One essential approach to keep in mind when implementing compliance training is the use of interruptive training methods for behavior disruption. Interruptive training takes the form of quick, simple, and repetitious bursts of learning that are easily accessible and cater to different styles of learning. This approach allows for content delivery that is geared towards disrupting employees’ routine and thought patterns to promote engagement, behavior change, and a deeper understanding of the material.

Czeczuga noted this approach can be especially beneficial for sending general compliance messages like anti-bribery or corruption communications to a broad audience. Additionally, she related that pre and post-tests can provide useful metrics to determine the effectiveness of the training, while surveys can offer additional insights into how well the content is resonating with employees. In this way, interruptive training methods not only serve to catch employees’ attention and disrupt thought patterns but also allow for a more objective assessment of training success.

3. Tailor targeted training for at-risk employees. In recent years, there has been a significant shift towards more targeted and efficient training methods, particularly for at-risk employees. As a result, targeted training for at-risk employees ensures that they receive the specialized instruction they need, while also making it more likely that they will retain the information and apply it in their daily work activities. Czeczuga explained that even though there may be a need for longer, more focused training for certain employees who are considered more at risk, micro-learning can still be a highly effective tool for delivering general messages, like those related to anti-bribery. The interruptive nature of micro-learning allows it to be delivered in various modes, catering to the needs of different types of learners.

Czeczuga also emphasized the usefulness of pre- and post-tests as a means of assessing training effectiveness, as well as the value of surveys in gauging learner feedback. The importance of tailoring targeted training for at-risk employees cannot be overstated, as the consequences of compliance failures can be both costly and damaging to an organization’s reputation. Ensuring that these employees have the necessary information and tools to act ethically and responsibly is crucial in promoting a culture of compliance and minimizing risk. Collaborative efforts between compliance and training departments are essential for developing and implementing training strategies that strike the right balance between targeted, in-depth instruction for at-risk employees, and more generalized training for the broader staff. Ultimately, a well-executed and carefully tailored training program will lead to improved effectiveness and a more robust compliance culture throughout the organization.

The importance of effective compliance and training programs cannot be overstated for professionals in this field. The steps outlined above provide a comprehensive approach to building and sustaining a robust training strategy that not only engages your employees but also drives positive behavioral changes. From embracing micro-learning techniques and interruptive training methods to fostering collaboration between departments and reinforcing the message consistently over time, these steps can ultimately transform your organization’s culture into one that values and prioritizes compliance. Seize this opportunity to elevate your training efforts, and witness the remarkable impact on your organization as a whole.

Join us tomorrow for a review of training for 3rd parties.

For more information go to http://diligent.com/compliancetraining.

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Innovation in Compliance

Building a Stronger Culture of Compliance Through Targeted and Effective Training: Part 3 – Defining the Effectiveness of Compliance Training

Welcome to a special 5 part podcast series on building a stronger culture of compliance through targeted and effective training, sponsored by Diligent. Over this series, I will visit with Kunal Agrawal, Director of Customer Success at Diligent; Kevin McCoy, Customer Success Manager at Diligent; Jessica Czeczuga, Director, Compliance and Ethics at Diligent; Andrew Rincón, Client Director at Diligent; and David Greenberg, former CEO and Special Advisor at LRN and Director at International Seaways. Over this series, we will consider the importance of ongoing communications, the value of targeted training, training third parties, and the role of the Board of Directors. In this Part 3, we consider the always challenging topic of defining training effectiveness with Jessica Czeczuga.

Join Tom Fox and Jessica Czeczuga from Diligent in this episode as they discuss how to make compliance training effective. Jessica shares insights from years of creating targeted training materials, emphasizing the shift from traditional classrooms to microlearning. She explains how microlearning enhances comprehension, adaptability, and retention in learners. Tom and Jessica also explore the role of testing and assessments in compliance training and showcase the power of surveys in shaping the culture of compliance within organizations. Take advantage of this informative episode that will transform how you think about compliance, train, and communicate.

Highlights Include:

  • Effective Microlearning for DOJ Training
  • Benefits of Microlearning for Corporate Training
  • The Evolution of Compliance Training Testing
  • Building a Culture of Compliance and Ethics
Notable Quotes:

“Microlearning is probably one of the most effective ways to convey content to your donors.”

“One of the things that I love about microlearning beyond all those other benefits is the ability to put together what we call a multimodal communication campaign.”

“Even with all the benefits of microlearning, there are certain situations where longer and more targeted or focused training may be necessary.”

“But I think if you have a training function and a compliance function, they should always be in communication.”

For more information, go to Diligent.com

Join us tomorrow when we review a strategy for training third parties.

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program with Boards – Board Failures

Next, consider a couple of landmark failures at the Board level around bribery and corruption.

VimpelCom Ltd. In 2015 (now Veon Ltd.), the DOJ alleged that Dutch telecom VimpelCom sought to enter the telecom market through the acquisition of a local player, Unitel, as an entrée into the Uzbekistan market. Unitel made clear to VimpelCom that to have access to, obtain, and retain business in the Uzbeki telecom space, VimpelCom would have to, according to the DPA, “regularly pay Foreign Officials millions of dollars” to Gulnara Karimova, the daughter of the then President of the country. VimpelCom also acquired another entity Butzel, that was at least partially owned by an Uzbeki government official, who hid their interest through a shell company, which was known to VimpelCom. VimpelCom did not articulate a legitimate business reason for the deal and paid $60 million for Buztel.

Ultimately, VimpelCom agreed to pay approximately $800 million in fines for these activities in 2016. 

BizJet. Another FCPA enforcement action involved the Tulsa-based company BizJet International Sales and Support Inc. (BizJet), which had four senior executives convicted for their participation in a bribery scheme. But this case also involved the Board of Directions. In the Criminal Information, it stated that in November 2005:

…at a Board of Directors meeting of the BizJet Board, Executive A, and Executive B discussed with the Board that the decision of where an aircraft is sent for maintenance work is generally made by the potential customer’s director of maintenance or chief pilot, that these individuals are demanding $30,000 to $40,000 in commissions, and that BizJet would pay referral fees in order to gain market share.

In both cases, this is where the rubber hits the road. If a company is willing to commit bribery and engage in corruption to secure business, no amount of doing compliance is going to help. If senior management is ready, willing, and able to lie, cheat and steal, the Board is the final backstop to prevent such conduct. Both the VimpelCom and BizJet Boards sorely failed in their compliance duties.  

Three key takeaways:

  1. Board liability will be severe based upon similar conduct going forward.
  2. Board members must critically challenge management on its conduct.
  3. The Board is the ultimate backstop against bribery and corruption.

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

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Compliance Into the Weeds

Compliance into the Weeds: A Material Weaknesses Catastrophe

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

In this episode, co-hosts Tom Fox and Matt Kelly dissect a disastrous 10k report filed by Ammo Incorporated, exposing the company’s shocking governance and compliance breakdown. The lack of personnel, internal control processes, and proper segregation of duties are just some of the material weaknesses that led to this corporate disaster. The hosts provide insightful lessons on what companies should avoid to maintain internal governance, share tips on approaching remediation, and emphasize the importance of self-awareness among senior management and the board. Tune in to hear how this niche investigative story was uncovered, and how Twitter played a crucial role in the investigation. Don’t miss Compliance into the Weeds – the podcast that will change the way you think about governance and compliance!

 Key Highlights 

·      Material weaknesses in internal governance practices

·      Material weaknesses in operations at Ammo

·      Challenges with Ammo Inc.’s strategic shift and internal controls

·      Remediating Company Failures: Story’s Disclosure

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