Tag: leadership lessons

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Adventures in Compliance

Adventures in Compliance – Leadership Lessons from Sherlock Holmes in The Illustrious Client

In this new season of Adventures in Compliance, host Tom Fox takes a deep dive into the Sherlock Holmes collection The Case-Book of Sherlock Holmes by Arthur Conan Doyle. It is the final set of twelve Sherlock Holmes short stories by Arthur Conan Doyle, first published in the Strand Magazine between October 1921 and April 1927. In this episode, we consider the story, The Adventure of the Illustrious Client, and the leadership lessons from the compliance professional that can be found in the story.

In this episode, we delve into the Sherlock Holmes story ‘The Illustrious Client,’ where Holmes and Watson aid Sir James Damery in rescuing General de Merville’s daughter, Violet, from the clutches of the dangerous Baron Gruner. The story unfolds with Holmes’s meticulous strategy to expose the Baron’s true nature, culminating in dramatic action and revealing leadership lessons for compliance professionals. Key leadership lessons include persistence in pursuing justice, strategic collaboration, deep contextual knowledge, risk mitigation, integrity and courage, adaptable tactics, and leveraging transparency to combat deception. These insights showcase how ethical behavior and accountability can be fostered in an organization.

Highlights include:

  • Holmes’ Strategy and Allies
  • Leadership Lessons from Holmes
  • Strategic Collaboration
  • Risk Awareness and Mitigation
  • Leveraging Transparency

Resources:

The New Annotated Sherlock Holmes

Sherlock Holmes FAQ by Dave Thompson

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the full 3-book series, The Compliance Kids, on Amazon.com.

For an audio/video version of the Compliance Kids book, Speaking Up is AWESOME, contact Tom Fox.

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Blog

The Gunvor FCPA Enforcement Action: Part 4 – Forward – Leaning Steps

As noted in this series, Gunvor received a 25% discount despite substantial violations of the FCPA that extended into the corporate offices. The company made multiple changes, which compliance professionals should study. We conclude with key lessons learned from the Gunvor enforcement action for compliance professionals.

Remediation

The company did an excellent job in its remedial efforts. It took major steps to create an effective, operationalized compliance program that met the requirements of the Hallmarks of an Effective Compliance Program as laid out in the 2020 FCPA Resource Guide, 2nd edition, and the 2023 Evaluation of Corporate Compliance Programs (23 ECCP).

The remedial actions by Gunvor can be grouped as follows:

  1. Implemented a control framework for internal business developers, as well as additional levels of review and approval for counter-party payments;
  2. Enhanced the independent compliance committee with responsibility for reviewing high-risk transactions;
  3. Updated its incentives to more fully align with the 23 ECCP;
  4. Tested and enhanced its compliance program, including compliance culture reviews, testing new third-party due diligence process and payment controls, and evaluating controls around business development activities; and
  5. It has implemented a business communications policy that addresses using ephemeral and encrypted messaging applications.

Change in Business Model

Gunvor eliminated the use of third-party business origination agents. Matt Kelly noted in Radical Compliance, “This is the latest in a string of FCPA enforcement cases where we’ve seen a big, structural change to the sale function. Albemarle eliminated its use of third-party sales agents as part of its FCPA settlement last year; SAP eliminated its third-party sales commission model globally as part of its own FCPA settlement announced in January. Now we have a third global enterprise going that same route, reducing its FCPA risk in a deep, permanent way by restructuring its sales operations.”

As I have noted in my review of the Albemarle and SAP enforcement actions, SAP eliminated its third-party sales commission model globally, prohibited all sales commissions for public sector contracts in high-risk markets, and enhanced compliance monitoring and audit programs, including the creation of a well-resourced team devoted to audits of third-party partners and suppliers. Albemarle changed its approach to sales and its sales teams, moving away from third-party agents to a direct sales force.

Moving to a direct sales force does have its risks, which must be managed, but those risks can certainly be managed with an appropriate risk management strategy, monitoring of the strategy, and improvement; those risks can be managed. Yet there is another reason, and more importantly, a significant business reason, to move towards a direct sales business model. Whenever you have a third-party agent or anyone else between you and your customer, you risk losing that customer because your organization does not have a direct relationship with the customer. A direct sales business model will give your organization more direct customer access.

The fact that the 2020 FCPA Resource Guide, 2nd edition, or the 23 ECCP does not lay out this strategy is another intriguing aspect of how Albemarle, SAP, and Gunvor use it. The companies developed all of these strategies based on their own analysis and risk models. It may have been a realization that the risk involved with 3rd party sales models was too great, that the companies wanted more control over their sales or another reason. Whatever the reason for the change, the DOJ clearly noted each organization and viewed it affirmatively.

(Lack of) Self-Disclosure

Even though this factor was not present in the Gunvor enforcement action, the DOJ’s message could not be any more explicit regarding the DOJ’s expectation of self-disclosure and the undeniable and palpable benefits. Under the Corporate Enforcement Policy, Gunvor’s failure to self-disclose cost it an opportunity of at least 50% and up to a 75% reduction off the low end of the U.S. Sentencing Guidelines: fine range. Its actions as a criminal recidivist resulted in it not receiving a reduction of at least 50% and up to 75% from the low end of the U.S.S.G. fine range but rather at 40% from above the low end. Gunvor’s failure to self-disclose cost it an estimated $40 million under the Sentencing Guidelines. Its inability to self-disclose and recidivism cost it a potential $150 million in discounts under the Corporate Enforcement Policy. The DOJ’s message could not be any clearer.

Cooperation

While most of the cooperation listed in the Plea Agreement was standard action previously seen, there are two that I believe were worth noting. The first was that the company expedited the production of documents for the DOJ from multiple foreign countries while navigating foreign data privacy and criminal laws. This language indicated that there were data privacy issues to overcome and that the company did so. This means that the DOJ expects any company to do so going forward.

The second was imaging the phones of relevant custodians at the beginning of Gunvor’s internal investigation, thus preserving business communications sent on mobile messaging applications. As with the SAP enforcement action, this is clear instruction around messaging apps in FCPA enforcement actions.

 Forward-Leaning Steps

Acting Assistant Attorney General Nicole M. Argentieri said in her speech, “As part of their resolutions with the Criminal Division, each of these trading companies was required to make critical enhancements to their compliance programs to prevent future violations of the FCPA. Companies that take forward-leaning steps on compliance will be better positioned to certify that they have met their compliance obligations at the end of the term of their agreements, as is now required in corporate resolutions with the Criminal Division. These prosecutions also help set the tone for the energy trading industry as a whole—they show that a robust compliance function is critical.”

This may be the most significant lesson garnered from the Gunvor enforcement action. By taking these “forward-leaning” steps, a company that finds itself in this situation can return even when home office officials look the other way or are directly involved in bribery and corruption.

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Adventures in Compliance

The Return of Sherlock Holmes – Leadership Lessons from The Empty House

Welcome to a review of all the Sherlock Holmes stories that are collected in the work “The Return of Sherlock Holmes.” It is a collection of thirteen detective stories written by Sir Arthur Conan Doyle, marking the reappearance of the brilliant detective Sherlock Holmes after his apparent death in “The Final Problem.” The collection spans various intriguing cases and mysteries that Holmes and his loyal friend Dr. John Watson tackle. Today we take up the Adventure of the Empty Room and mine it for leadership traits for the CCO and compliance professional.

In the world of compliance, where ethical standards are of utmost importance, there are valuable lessons to be learned from the iconic detective Sherlock Holmes. In an episode of the podcast “Adventures in Compliance,” host Tom Fox explores the principles embodied by Holmes in the story “The Final Problem” and how they can serve as a guide for compliance professionals. “The Final Problem” features Holmes’ continued confrontation with his arch-nemesis, Moriarty, through Moriarty’s acolyte, Colonel Sebastian Moran. It showcases Holmes’ continuous learning, persistence, adaptability, attention to detail, and teamwork. These principles can be applied by compliance professionals to maintain ethical and legal standards in their organizations. Join Tom Fox in this episode of The Adventures in Compliance as he delves deeper into how the methods of Sherlock Holmes can be applied to uphold ethical standards in the world of compliance.

 

Key Leadership Traits from Sherlock Holmes for the Compliance Professional

  1. Adaptability.
  2. Problem-Solving.
  3. Attention to detail.
  4. Persistence.
  5. Teamwork.
  6. Leadership Presence.
  7. Continual Learning.

Resources:

The New Annotated Sherlock Holmes

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Popcorn and Compliance

Popcorn and Compliance: Monster Movie Month – Murders in Rue Morgue

Tom Fox is back with his Classic Monster Movie Month, where he reviews a Classic Monster Movie from Universal Pictures from its Classic Monster Movie era of 1931 to 1947. This year, I want to take a look at some of the lesser-known movies and mine them for both leadership and ethical lessons. We begin our journey with the 1932 Bela Lugosi class Murders in Rue Morgue.

The movie “Murders in the Rue Morgue” is a classic horror film that delves into the themes of consent, personal autonomy, and ethics. It tells the story of Dr. Mirakle, a mad scientist who conducts experiments on kidnapped women without their consent. This raises important questions about the disastrous consequences of disregarding individual rights for personal or scientific pursuits.

The film serves as a cautionary tale, highlighting the dangers of unchecked power and the potential for abuse. Dr. Mirakle’s blind obsession with proving his theory leads him to commit heinous acts, demonstrating the importance of leaders remaining balanced, open-minded, and willing to change their course of action based on new information or evidence.

One of the key ethical concerns raised in the movie is the exploitation of vulnerable populations. Dr. Mirakle specifically targets women whom he believes society won’t miss, prompting reflection on the morality of exploiting those who are already marginalized. This raises important questions about the ethical implications of using vulnerable individuals for personal or scientific gains.

The film also touches on the importance of consent and personal autonomy. Dr. Mirakle’s kidnapping and experimentation of unsuspecting individuals grossly violate the principle of consent and infringe upon their autonomy. Every individual has the right to control what happens to their own body, and this film serves as a stark reminder of the importance of respecting those rights.

Furthermore, “Murders in the Rue Morgue” raises questions about the limits of science. While science and research are crucial for human advancement, there are ethical boundaries that should never be crossed. Dr. Mirakle’s actions demonstrate the disastrous consequences that arise when someone disregards the sanctity of life in pursuit of personal or scientific objectives.

The film also explores the themes of responsibility for one’s actions and the questioning of morality versus legality. Dr. Mirakle faces consequences for his unethical practices, highlighting the idea that actions have repercussions and that individuals must be held accountable for their deeds. It also emphasizes the difference between what is legal and what is ethical, prompting viewers to consider the importance of aligning their actions with their moral compass.

In addition to these ethical considerations, the film offers leadership lessons. The protagonist, Pierre Dupont, exemplifies courage in adversity, questioning authority, and understanding team motivations. He bravely pursues the truth and saves his fiancé, demonstrating the importance of leaders being prepared to face challenges head-on and take risks when necessary to achieve their objectives and protect their team.

Overall, “Murders in the Rue Morgue” is a thought-provoking film that raises important ethical questions about consent, personal autonomy, and the limits of science. It serves as a reminder of the disastrous consequences that can arise when individual rights are disregarded for personal or scientific pursuits. The film prompts reflection on morality, science, and the importance of considering the impact on others when making decisions about consent, personal autonomy, and ethics.

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Adventures in Compliance

Adventures in Compliance – Leadership Lessons from The Adventure of the Engineer’s Thumb

Welcome to a review of all the Sherlock Holmes stories which are collected in the work, “The Adventures of Sherlock Holmes.” The appeared in the Strand Magazine from July 1891 to June 1892. Over 12 episodes, I will be reviewing each story and mine them for leadership, compliance and ethical lessons.  In this episode, I consider story of “The Adventure of the Engineer’s Thumb” which was originally published in the Strand Magazine in March 1892 and is a part of the collection ‘The Adventures of Sherlock Holmes’.

Summary

Hatherley visits Holmes with a peculiar tale. He recounts his recent experience where he was hired by a man named Colonel Lysander Stark to repair a hydraulic press at his country house. However, things take an alarming turn when Hatherley discovers that the press is not being used for its intended purpose but rather to manufacture counterfeit coins.

Realizing the danger he is in, Hatherley attempts to escape, but he is caught by Stark and his accomplice. In a struggle, Hatherley manages to free himself, but not before his thumb is severed by Stark with a cleaver. Bleeding and desperate, Hatherley seeks assistance from Holmes to bring the criminals to justice and recover his thumb.

Holmes and his trusted associate Dr. John Watson investigate the matter. They discover that Stark is a member of a criminal gang involved in counterfeiting coins. With Holmes’ guidance, Hatherley’s thumb is reattached, and the detectives devise a plan to expose Stark and his operation.

Disguised as potential investors, Holmes and Watson visit Stark’s house. They gather evidence, unravel the gang’s secrets, and narrowly escape a dangerous confrontation. In the end, the authorities apprehend Stark and his gang members, putting an end to their counterfeiting activities.

“The Adventure of the Engineer’s Thumb” showcases Holmes’ deductive reasoning and quick thinking as he helps Victor Hatherley navigate a dangerous situation. The story highlights the detective’s ability to solve complex cases and bring criminals to justice while also emphasizing the importance of the thumb as a key piece of evidence in unraveling the mystery.

Leadership Lessons

1.         Attention to detail: Sherlock Holmes is known for his attention to detail, and this is evident in “The Adventure of the Engineer’s Thumb.” He is able to solve the mystery by paying close attention to small details that others have overlooked. Compliance professionals can learn from this by focusing on the details and not overlooking anything that could be important.

2.         Problem-solving skills: Holmes is a master of problem-solving, and this is demonstrated in the story as he unravels the mystery of the engineer’s thumb. Compliance professionals can learn from this by developing their problem-solving skills and approaching challenges with a creative and analytical mindset.

3.         Teamwork: Although Holmes is the main detective in the story, he works with others, including Dr. John Watson, to solve the case. Leaders in business can learn from this by recognizing the importance of teamwork and building strong relationships with their colleagues.

4.         Adaptability: Throughout the story, Holmes demonstrates his ability to adapt to changing circumstances and adjust his approach as needed. Compliance professionals can learn from this by being flexible and open-minded, and by recognizing that there may be multiple solutions to a problem.

5.         Communication skills: Throughout the story, Holmes effectively communicates with others to gather information and solve the case. Compliance professionals can learn from this by developing their communication skills and being clear and concise in their interactions with others.

6.         Risk management: in the story, the engineer’s thumb is a result of a failed business deal. Compliance professionals can learn from this by recognizing the importance of risk management and by taking steps to minimize potential risks in their operations.

Resource

The New Annotated Sherlock Holmes

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Adventures in Compliance

Adventures in Compliance – Leadership Lessons from the Adventure of The Speckled Band

Welcome to a review of all the Sherlock Holmes stories which are collected in the work, “The Adventures of Sherlock Holmes.” The appeared in the Strand Magazine from July 1891 to June 1892. Over 12 episodes, I will be reviewing each story and mine them for leadership, compliance and ethical lessons. In this episode, I consider “The Adventure of the Speckled Band” which was originally published in the Strand Magazine in February 1892 and was included in the collection of stories published as ‘The Adventures of Sherlock Holmes’.

Summary

The story begins with Miss Helen Stoner, a young woman obviously in distress, visiting Sherlock Holmes and Dr. Watson at 221B Baker Street. She is worried about her life, fearing that she might meet the same mysterious end that her twin sister, Julia, did two years prior. Julia’s dying words were about a “speckled band.”

Helen and Julia lived with their stepfather, Dr. Grimesby Roylott, the last survivor of a noble but financially ruined family, in Stoke Moran Manor in Surrey. Dr. Roylott is a doctor with a violent history and is known to keep exotic animals from India, such as a cheetah and a baboon, at their estate.

After hearing noises and seeing strange activities from her stepfather’s room, Helen suspects that her life is in danger, especially as she is now sleeping in the same room her sister did just before she died.

Sherlock Holmes and Dr. Watson travel to the Manor, examining the room where Julia died and the surrounding areas, including Dr. Roylott’s chamber. Holmes observes that the bed is clamped to the floor, a bell rope that doesn’t work, a vent that leads to Dr. Roylott’s room, and a saucer of milk. Putting the pieces together, he devises a plan to find out the truth.

Holmes and Watson camp out in Helen’s room that night, and they hear a low whistle and metallic noise. Suddenly, Holmes strikes out with his cane at the bell rope and a poisonous snake (the “speckled band”) drops onto the floor. Holmes forces the snake back through the vent, and it bites Dr. Roylott, who is found dead in his room.

In the end, Holmes explains how Dr. Roylott used the snake, trained to travel through the vent to the sound of a whistle, to kill Julia, and he had attempted the same with Helen. The motive was financial, as Dr. Roylott would have lost a significant amount of income from the girls’ mother’s estate if they married.

Leadership Lessons

1.         Attention to detail: Sherlock Holmes is known for his attention to detail, and this is evident in “The Adventure of the Speckled Band.” He solves the mystery by paying close attention to small details that others have overlooked. Leaders can learn from this by focusing on the details and not overlooking anything that could be important.

2.         Critical thinking: Holmes is a master of critical thinking, and this is demonstrated in the story as he analyzes the evidence and develops a theory to explain the mysterious events. Leaders can learn from this by developing their critical thinking skills and approaching challenges with a logical and analytical mindset.

3.         Empathy: Throughout the story, Holmes demonstrates a deep sense of empathy for the victim and her family, and he is determined to bring the culprit to justice. Leaders can learn from this by being empathetic and understanding towards their employees and by showing compassion for others.

4.         Adaptability: Holmes demonstrates his ability to adapt to changing circumstances and adjust his approach as needed. Leaders can learn from this by being flexible and open-minded, and by recognizing that there may be multiple solutions to a problem.

5.         Courage: Despite the danger involved, Holmes is determined to solve the case and bring the culprit to justice. Leaders can learn from this by being courageous and standing up for what is right, even in the face of challenges and obstacles.

6.         Communication skills: Throughout the story, Holmes effectively communicates with others, including Dr. John Watson and the victim’s family, to gather information and solve the case. Leaders can learn from this by developing their communication skills and being clear and concise in their interactions with others.

Resource

The New Annotated Sherlock Holmes

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Presidential Leadership Lessons for the Business Executive

Leadership Lessons from the Presidency of US Grant


In this episode, Richard Lummis and Tom Fox consider the leadership lessons from the Presidency of US Grant. The lessons include:
1. Reconstruction and the Civil Rights Acts, leading to the passage of the 15th Amendment;
2. Appointment of minorities to his cabinet and other top government positions;
3. His Indian peace policy. At the start of his administration, there were 370 separate treaties with Native Americans. Grant streamlined this process and appointed a Seneca Indian as head of the BIA; and
4. Foreign Affairs. We consider Grant’s leadership in the dispute with Great Britain over claims against the Confederate raider Alabama.