Compliance Perspectives

By Adam Turteltaub

Fast Company recently ran an article with the headline “Research Shows High Performing Employees are More Prone to Unethical Mistakes.” It’s both an alarming and an intriguing proposition.

To understand more I spoke with Richard Bistrong, CEO of Front-Line Anti-Bribery LLC, who co-authored the article along with Ron Carucci and Dina Smith.

Why are high performers potentially so dangerous? For one, he explains, success tends to block scrutiny. People don’t like to question it and are just grateful to see so much of it. They may not think to look or not want to look too deeply.

Another challenge is that the more successful people are, the more addicted to success they may become, something Richard knows from his own experience. The challenge of being a corporate hero, he explains, is that once you earn that status, you typically don’t want to give it up and may end up going down what has been called the rabbit hole of success.

At the same time, the company may be exerting pressure on the individual to do ever more, partially because it is standard practice in business to set higher goals. But also, the company may grow disproportionately dependent on the results the high performer can generate.

Fortunately, there are several things that can be done to mitigate the risk without clipping the wings of the highflyer. For one, compliance teams should try to look at the incentive plans to both identify the risks and help mitigate them. While there, look to also include compliance measures that make it clear that it’s not just about achieving the goals, it’s also about how you achieve them.

Second, connect rewards and good performances with the company’s values and mission. This helps the high performer understand both what the rules are and why they are important.

Listen in to learn about how to get the most out of higher performers while avoiding the risk that can come with them.

By Adam Turteltaub

In the September 2023 issue of Compliance and Ethics Professional® (CEP) magazine, Andrea Falcione (LinkedIn), Chief Ethics and Compliance Officer and Head of Advisory Services of Rethink Compliance LLC, wrote about fostering a speak-up culture. Institutional justice, she wrote, is a critical part of that effort and “paramount to gaining and keeping employee trust.”

To learn more about the topic, I sat down with her for this podcast, in which she explains that there are four elements of institutional justice.

The first is Respect for everyone involved in an incident. That includes the person who comes forward with an allegation of course, but it should also include those the allegation was raised against, any witnesses and also people who come forward to self-report. By doing so, you make it clear that it is safer and better to come forward when there is wrongdoing.

Voice is the second element. She shares that this means allowing people to speak and share their story. It also means listening attentively, showing interest, making good eye contact and asking open-ended questions.

Neutrality is about making unbiased decisions and not letting a conflict of interest get in your way, such as when investigating a high performer in the organization.

Transparency, about both the process and the outcome, is the fourth key element. It helps build trust that the process is fair and demonstrates that there will be a thoughtful response by the organization.

Listen in to learn more about what institutional justice is and how to improve it in your organization.

By Adam Turteltaub

Where is the compliance profession now and where is it going?

To find out we sat down with Chris Audet, Chief of Research at the Gartner Center for Legal, Risk & Compliance Leaders. Gartner recently issued a report: “Key Budget, Staffing and Spending Trends for Compliance in 2023”, and in this podcast he shares some of the insights in it.

When it comes to budgets, compliance teams are strained, but not how they expected. During the pandemic there were fears of large funding cuts. While there have been some reductions, on the whole they have been minor.

However, workloads have increased dramatically. This has led, he explains, to overstretched departments where the loss of even one FTE can be devastating.

Three key issues have led to the increase in demands on compliance teams:

The challenge of tracking regulations.

A rising number of issues, such as ESG, that may have begun in another department but are now considered compliance’s responsibility

Conducing internal investigations in an expeditious manner. With workers in the office less, the pace of investigations has slowed.

To help get the work done compliance teams are investing more heavily in technology, particularly in risk management systems. The pace of investment is expected to grow as compliance teams contend with flat budgets and reduced staff.

To retain staff, Gartner advises creating a strong value proposition that includes a work-life balance and career development.

Listen in to learn more about the state of compliance and how teams are coping.

By Adam Turteltaub

When an organization begins to expand globally, or even when a global organization enters a new market, the compliance challenges can be considerable and multiple.

In this podcast, Dr. Shan Nair, President of Nucleus explains that companies need to worry not just about issues such as anti-corruption and data privacy. There are a host of HR, accounting, corporate taxation, indirect taxes, withholding taxes and other compliance issues.

In addition to these obligations there may also be filing requirements. Germany, for example, requires a special filing if a local subsidiary is not self-funding.

Making things more complicated is that a trusted source for compliance advice in one area likely is completely unaware of the challenges in another.

The bottom line is that it takes a concerted effort and a very local approach to meet all these obligations and ensure that the organization is compliant not just on the big issues, but on the dozens of less headline grabbing ones as well.

By Adam Turteltaub

You may not realize it, but your compliance program has a brand. Line employees and management all have a host of impressions about the compliance department that color how they respond to what you say and do. A strong brand means that your actions are more likely to be appreciated. A weak brand means it’s a very steep uphill climb.

Adam Balfour, Vice President & General Counsel for Corporate Compliance at Bridgestone Americas and author of the book Ethics & Compliance for Humans, is an advocate for compliance teams making the effort to invest in creating a strong, positive brand that communicates the value of the program.

As a part of that effort, compliance teams need to move beyond simply building awareness to ensuring that the brand resonates and is relevant to the organization. To do that he advocates taking a people centric approach and using three methods of motivation:

Start with why. Don’t just tell them what to do. Tell them why they need to do it beyond “the law requires it”.

Emphasize group safety. Share what others in the organization are doing and use community as a motivator.

Use incentives. The US Department of Justice is calling for them, and they can be very helpful, even non-monetary ones.

Finally, leaning on his United Kingdom roots, he encourages compliance teams to think like soccer midfielders, players who can both defend and attack.

Listen in to learn more about how you can strengthen your compliance program’s brand.

By Adam Turteltaub

On October 4, 2023 at the SCCE Compliance & Ethics Institute in Chicago, US Deputy Attorney General Lia A. Monaco spoke live from Washington to the attendees and used this opportunity to announce a new Safe Harbor Policy for voluntary self-disclosures made in the context of the merger and acquisition process.

Under the policy, acquiring companies that promptly disclose criminal misconduct voluntarily within the six-month safe harbor period, cooperate with investigators and engage in remediation, restitution and disgorgement will receive the presumption of a declination. She also explained that, absent aggravating factors at the acquired company, it will not impact the acquiring company’s ability to receive a declination.

She also shared how the Department of Justice has been fighting corporate crime including:

The expansion of corporate enforcement efforts in the national security realm

New tools DOJ is using to penalize corporate misconduct and provide invectives for good corporate citizenship

Areas where they see further opportunity for innovation and expansion

Listen in to learn more and hear her underscore the importance of compliance programs, proper corporate incentive plans, and the DOJ’s expectation that the compliance team will have a seat at the deal table.

By Adam Turteltaub

Much of the day to day of compliance isn’t about understanding laws. It’s about influencing human behavior and steering people in the right direction.

In this podcast, Scott Young, Principal Advisor and Head of Private Sector at Behavior Insights Team, Americas shares that understanding how people make decisions can help compliance teams be more effective. To do so, he advocates for using behavioral science to gain a broader perspective for thinking about human behavior.

The field has shown, for example, that the classic economics model of rational thinking doesn’t always apply. Too often we operate in a semi-automatic mode, making decisions quickly, not really aware we are even making them.

So what do compliance teams do? Adopt what he describes as the EAST Framework.

Easy. Make sure the proper choice is the default choice.

Attractive. Make compliance fun and engaging. Embrace gamification and other ways to make compliance more attractive to people.

Social. Humans are social being and we are curious what others are doing. Thinking about tapping into the power of the group, such as leveraging social norms.

Timely. Having reminders and controls in place when they are timely is difficult but not impossible. Look for the right moments of intervention and the right, often quick, reminder of what is the right thing to do.

Listen in to learn more to learn how you put a behavioral approach to work for your compliance program.

By Adam Turteltaub

NAVEX earlier this year issued its very substantial 2023 State of Risk & Compliance Report. To learn about the key findings we sat down with longtime ethics and compliance leader Carrie Penman, who serves as the company’s Chief Risk and Compliance Officer.

Overall, the data reveals strong management support for compliance and ethics programs, although there are cracks showing. When asked whether this commitment persists in the face of competing interests, the numbers show a troubling drop. Worse, there was an increase in the number of survey respondents indicating that middle managers encouraged employees to act unethically or impeded compliance personnel from their job. It was still a minority, but a larger one than before.

Turning to specific risk areas, data breaches and privacy/security threats were the top fears for compliance professionals. Not surprisingly, cyber came up as a top training topic. It was followed by codes of conduct and privacy.

Looking globally – the survey also has data broken out for Germany, France and the UK – there was a far from uniform picture, with country-by-country variations showing varying priorities and levels of satisfaction. For example, risk and compliance professionals in Germany reported their ability to measure training and behavior higher than their peers in France and the US.

All in all, the report makes for a fascinating, and sometimes troubling, picture of the practice of compliance.

Listen in to learn more about what the data said and what it may indicate for your compliance program.

By Adam Turteltaub

It may be time to rethink background checks.  Brent Douglas (LinkedIn) partner at the law firm Hahn Loesser, explains that their use has been greatly reduced in many industries. This reflects the increase in the number of what are known as “ban the box” laws, which prohibit employers from asking job applicants to tick a box if they have a criminal history.

He also warns that in some jurisdiction screening applicants wholesale for criminal backgrounds may not be permissible. Only after a job offer has been conditionally made can a firm conduct a check.

That doesn’t mean background checks are always prohibited. In certain industries, such as healthcare, defense and transportation they are often obligated. Even screening for marijuana usage may be permissible, but be careful. California, starting in January 2024, will enforce a new testing methodology.

If your organization conducts background checks, it may be best to have a third party conduct it for you. This both leverages their expertise and may shift liability if the check is done improperly. He also cautions that even a casual internet search of a prospective employee may turn up a past criminal conviction and cross the line into what legally constitutes a background check.

For those concerned about the risks of hiring a criminal, he points out that roughly 95% of the population does not have a criminal background. Amongst those with a conviction, about 95% of those were for marijuana possession or a DUI. He asks; is it worth doing the background check given these odds?

Listen in to learn more about the risks of background checks.

By Adam Turteltaub

Mary Shirley (LinkedIn) has had a fascinating journey as a compliance professional. Born in Hong Kong and raised in New Zealand, she has worked in Singapore, Dubai and across the US. She currently serves as Head of Compliance at Masimo, and she just authored the book Living Your Best Compliance Life: 65 Hacks & Cheat Codes to Level Up Your Ethics & Compliance Program.

In this podcast she argues for embracing professional development and owning your own advancement.

Among the hacks she recommends is creating a notebook on yourself. Record in it what you have done, the key steps along the way, and some of the larger details. That way, when annual performance time comes around, you are prepared to share what you have accomplished and won’t have to scramble to reconstruct what you did over the past year.

The same information, she points out, is very helpful when looking for your next position. It can help  you both recall what you have done and prepare to answer questions about key accomplishments and solutions you have developed.

When it comes to speaking at conferences and writing, she offers some simple advice: Just start. If you don’t you will always wonder what might have happened if you did.

From a practical perspective, she urges people to remind themselves that the first draft doesn’t have to be the last. You can turn to others for feedback who can help you revise and improve that article or speaking proposal.

To get the best advice, she recommends creating what she calls a wisdom council: a group of individuals whose advice you can trust. The council should be made up of people with diverse skills and experiences who have practical expertise and the comfort level with you to offer both encouragement and honest feedback, even if it is uncomfortable.

Listen in for more advice on how to level up your skills and how to find the courage to pursue your goals.