I am a huge fan of using social media in your compliance function. But how can you get your arms around how to structure such a program for your company? After acknowledging that social media focuses on the social aspects of communication, the most important thing to remember is that communication in social media is two-way, both inbound and outbound. It helps to bring your employee base together in an efficient manner to create an environment conducive to compliance for your organization. It also has the benefit of continued engagement. It is more than putting on training or even a set of initiatives; you can continue the conversation and enthusiasm about compliance going forward throughout the year. The authors break this down further into three parts that emphasize 1) the need to listen to and learn from user-generated content, 2) the need to engage and facilitate dialogue with employee innovators, and 3) to find an audience of early adopters to create excitement and collect feedback.

If your goal in the compliance function is to create awareness and publicize your compliance program and initiatives, social media can be a powerful tool. This is so paramount that it should become a core activity of your compliance function. Using social media tools, your compliance function can tell the story of compliance, communicate expectations, and even train. Yet again, it is simply more than a one-way tool. Just as employees are more apt to tell you about a concern immediately or soon after being trained on that issue, they may well communicate directly with you after receiving social media communication on subjects such as managing third-party relationships.

CCOs and compliance practitioners must develop a dedicated compliance strategy around social media in the context of their corporate objectives. It allows you a 360-degree view of compliance, through which you can take input from your employee base and create a compliance experience that your employees will embrace.

 Three key takeaways:

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

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What is the message of compliance inside of a corporation and how it is distributed? In a compliance program, the largest portion of your consumers/customers are your employees. Social media presents some excellent mechanisms to communicate the message of compliance going forward. Many of the applications that we use in our personal communications are free or available at very low cost. Why not take advantage of them and use those same communication tools in your internal compliance marketing efforts going forward?

Louis Sapirman, Vice President and Chief Ethics & Compliance Officer for Panasonic Corporation of North America – Panasonic USA, often talks about the integration of social media into compliance. You should start with the tech-savvy nature of the today’s workforce. It is not simply about having a younger workforce but a workforce whose primary tool for communication is social media. If your company is in the services business, it probably means your employee base is using technological tools to deliver business solutions. Finally, consider the data-driven nature of business today so using technological tools to deliver products and solutions is something your company most probably does now. Facebook, LinkedIn, Twitter and even TikTok can all be utilized. 

Finally, never forget the social part of social media. Social media is a more holistic, multiple-sided communication. Not only are you setting out expectations but also these tools allow you to receive back communications from your employees. The D&B experience around the name change for its Code of Conduct is but one example. You can also see that if you have several concerns expressed it could alert you earlier to begin some detection and move towards prevention in your compliance program.

Another approach is to use audio as a part of your compliance communications. Podcasts are a great way to tell a long form story about your compliance successes and challenges. Ronnie Feldman, founder of L&E Entertainment continually reminds us that the engagement of your compliance audience is through the entertainment of your compliance communications. But the key is the audio format can be a powerful tool for you and a way to reach your employee base that you are not taking advantage. It can be as simple as interviewing employees on the importance of culture and how they use culture to guide their decision-making process in their daily work. You are only limited by your imagination.

 Three key takeaways:

1. Incorporation of social media into your compliance communications can pay big dividends.

2. Focus on the ‘social’ part of social media.

3. Consider incorporating podcasts and other audio clips into your compliance communications and training.

For more information, check The Compliance Handbook, 3rd Edition available here. 

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How did one company and one CCO actively use social media to make the company's compliance culture more effective? The company was Dun & Bradstreet, Inc. (D&B), and its then CCO, Louis Sapirman, discussed D&B's integration of social media into compliance with me.

As we advance, these tools can go a long way toward enhancing your compliance program. Recall the declination to prosecute Morgan Stanley received from the DOJ when one of its managing directors had engaged in FCPA violations. One of the reasons cited by the DOJ was 35 email compliance reminders sent over seven years, bolsters the annual FCPA training the recalcitrant managing director received. You can use your archived social media communications as evidence that you have continually communicated your company's expectations around compliance. It is equally important that these expectations are documented.

Finally, always remember the social part of social media. Social media is a two-way communication. Not only are you setting out expectations, but also, these tools allow you to receive back communications from your employees. The D&B experience around the name change for its Code of Conduct is but one example. If you have several concerns expressed, it could alert you earlier to begin some detection and move toward prevention in your compliance program.

Three key takeaways:

For more information, check The Compliance Handbook, 3rd Edition available here.

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In this month's offering of 31 Days to a More Effective Compliance Program, you will learn about training and communication techniques that the CCO can use to provide a well-rounded role as a CCO and facilitate a much more holistic approach to compliance in your organization. Best of all, the techniques discussed are available at little to no cost. You can do things in your method of running the CCO positions and innovations that you can bring to the compliance function in your organization.

A 360-degree view of compliance is an effort to incorporate your compliance identity into a holistic approach so that compliance is always in touch with and visible to your employees. It is about creating a distinctive brand philosophy of compliance centered on the customers of your compliance program (i.e., your employees). It helps to anticipate all the aspects of your employee's needs around compliance, especially when compliance is perceived as new, something that comes out of the home office, or as the Land of No. It allows you to build a new brand image for your compliance program.

The objective is to build trust for the 360-degree process by determining if the goal was achieved. You can utilize surveys or focus groups to assess the impact on your target audience. Focusing on your customers of compliance allows you to identify gaps and improve the communication process for your compliance program.

Three key takeaways:

For more information, check The Compliance Handbook, 3rd Edition, available here.

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One of the areas many companies do not focus on enough is possible corruption in their supply chain for goods and services provided on a company’s behalf. The FCPA risks can be just as great through those entry points as they can be through the sales side of an organization. You need to know whom your company is doing business with through this channel as much as you need to know your agents seeking business opportunities on your behalf. Most companies have exponentially more vendors than sales agents, so this task may seem daunting. However, a well-thought-out plan to risk rank your company’s third parties on the supply chain side can go a long way toward ameliorating this issue. The key is setting reasonable parameters and then managing those third parties that present real corruption risk to your organization.

This determination of the level of due diligence and categorization of a supplier should depend on a variety of factors, including such factors as whether the supplier is (1) located or will operate in a high-risk country; (2) associated, or recommended, or required by, a government official; (3) currently under corruption investigation, or has been recently convicted of any form of corruption; (4) a multinational publicly traded corporation with a recognized exemplary system of compliance and internal controls; or (5) a provider of widely available services and products that are not industry specific. You should note that any supplier with foreign government touchpoints should move up to a higher level of scrutiny.

I suggest that you create a three-tiered risk matrix consisting of (1) high-risk suppliers, (2) low-risk suppliers, and (3) minimal-risk suppliers. Below this final category is another category for providers of goods that are commonly available and pose almost no corruption risk.

It would be best to risk ranking the third parties your supply chain might engage with for FCPA exposure. It should be based on your company’s experience and risk going forward. As with all third-party risk management issues, you must “Document, Document, and Document.”

Three key takeaways:

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The FCPA world is littered with cases involving freight forwarders, brokers and agents in the shipping and express delivery arena. Both the DOJ and SEC have aggressively pursued third-party business relationships where bribery and corruption have been found. This is particularly true where companies are required to deliver goods into a foreign country through the assistance of a freight forwarder or express delivery service.

If you utilize the services of a third-party for as a freight forwarders, brokers and agents in the shipping and express delivery arena, that company’s actions will go a long way in determining your company’s FCPA liability. You must have a thoughtful process and document that process.

Three key takeaways:

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One of the issues in any compliance program is the compensation paid to a third party, as FCPA exposure arises when companies pay money, either directly or indirectly, to fund bribe payments. Another area that leads to exposure from third parties is with distributors. In a distributor relationship, the distributor purchases a product, taking the risk of loss and title, at a discount from a manufacturer. The distributor resells at an uplift, and that spread between the purchase price and sales price is the distributor’s income. If a product is purchased at an inflated discounted rate and sold, the difference between the purchase price and resale value could be used for corrupt purposes. Commission payments and excessive distributor discounts can be channeled to pay bribes.

The FCPA Resource Guide, 2nd edition, noted that common red flags associated with third parties include “unreasonably large discounts to third-party distributors.” When companies grant distributors uncommonly steep discounts, bribes can result either: 1) because the company instructs the distributor to use the excess amounts to fund corrupt payments; or 2) because the distributor pays bribes on its own, without the express direction or implicit suggestion from the company, to gain some business advantage.

Three key takeaways:

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At some point, you will be required to terminate a third party and there will be multiple legal, compliance and business issues to navigate through. If you are stuck doing it in the middle of a FCPA or U.K. Bribery Act investigation, there may well be some tension to do so and do so quickly. If you have not thought through this issue and created a process to follow before a crisis occurs, you may well be in for a very tough road. Yet the 2023 ECCP specifically asked that question in the section entitled, Real Actions and Consequences, when it posed the query: Has a similar third party been suspended, terminated, or audited as a result of compliance issues?

The key theme in termination is planning. The Office of Comptroller of the Currency (OCC), OCC Bulletin 2013-29, said that regarding third-party termination, a bank should develop a “contingency plan to ensure that the bank can transition the activities to another third party, bring the activities in-house, or discontinue the activities when a contract expires, the terms of the contract have been satisfied, in response to contract default, or in response to changes to the bank’s or third party’s business strategy.”

Although rarely considered, the termination of a third-party relationship can be as important a step as any other in the management of the third-party lifecycle. While having the contractual right to terminate is a good starting point, it is only the starting point. You not only need to have a compliance and legal plan in place but a business plan as well. If you do not, the cost in both monetary and potential business reputation can be quite high.

 Three key takeaways:

1. Termination of third parties is an oft-neglected part of the third-party risk management process.

2. Make certain you have the contractual right to terminate third parties written into your compliance terms and conditions.

3. Have a strategy in place for termination before a crisis arises.

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It is universally recognized that third-parties are your highest FCPA risk. What if you could turn your third-party from a liability under the FCPA to an innovation partner to your compliance program? This is an area that not many compliance professionals have mined but once again in compliance, you are only limited by your imagination. In a Supply Chain Management Review article by Jennifer Blackhurst, Pam Manhart and Emily Kohnke, entitled “The Five Key Components for Supply Chain Innovation”, the authors identified five components common to the most successful innovation partnerships. They are:

Don’t settle for the status quo. This means that you should not settle for simply the status quo in compliance.

Hit the road in order to hit your metrics. To truly understand your compliance risk from third-parties, you must get out of the ivory tower and hit the road.

Send prospectors, not auditors. While an audit clause is critical in any third-party contract, both from a commercial and FCPA compliance perspective; you can establish a “point of contact as an innovation manager for your third-parties.”

Show and tell. As with all relationships, trust plays an important role in third-party compliance innovation, as “Firms in successful innovations discussed a willingness to share resources and rewards and to develop their partners’ capabilities.”

Who’s running the show? This means “who is doing what, but also what each firm is bringing to the relationship in terms of resources and capabilities.”

Three key takeaways:

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