Compliance Perspectives

By Adam Turteltaub

Ethical leadership is about much more than being both ethical and a leader. It is also about the actions you take to encourage ethical behavior all around you.

It’s the subject of this podcast and a talk that will be given in March at the SCCE European Compliance & Ethics Institute by Steven Pegg, Senior Ethics Officer, Europe, Middle East & Africa for Lockheed Martin.

Ethical leadership comes with many challenges. Aggressive goals can cause executives to focus just on the task at hand and be tempted to cut corners. Studies have shown that positions of power can have an affect on behavior over time, leading to a loss of empathy, acts of disrespect, feelings of entitlement, selfish behavior and a tendency to think that the rules don’t apply to them. These factors can create a toxic culture not surprisingly.

Smaller offices also face the challenge of developing a subculture that can be inimical to ethical conduct. Lacking the controls of larger locations, unethical behavior may be left unchecked.

There is one other challenge to ethical leadership: a hesitance to talk about ethics. Some leaders, even virtuous ones, are uncomfortable discussing ethical issues.

To overcome these challenges ethical leaders need to develop several skills. These include:

* Setting the tone. People model what their leaders do. If a leader is comfortable telling stories and discussing ethical issues, it’s far more likely the rest of the workforce will be as well.

* Act as a positive role model. They must be accountable for their actions and both talk the talk and walk the walk. They also must respond fairly to both positive and negative feedback.

* Know their limits. When leaders have exhausted their own skill sets, they need to be willing to reach out to others for guidance.

How can executives exercise ethical leadership in a hybrid environment? Steven recommends being creative. Use technology when it is helpful, but look also to face-to-face, in-person interactions as well. Setting up regular check-ins with the team can be particularly useful.

At those meetings, encourage people to share their ideas on all the issues. It will make them feel more comfortable raising their hand, knowing they are in a safe environment.

Also, remember that different cultures around the globe have their own unique ways of seeing things and behaving. Take the time to understand those differences and communicate sensitively.

Finally, he discusses what to do when an employee comes forward with a concern. His central advice: listen, listen, listen.

Listen in for more and then be sure to join him at the 2023 SCCE European Compliance & Ethics Institute.

By Adam Turteltaub

At the 2023 HCCA Compliance Institute, which takes place April 23-26 in Anaheim (and in a virtual format  April 24-26), Niurka Adorno-Davies, AVP Compliance, Molina Healthcare, and Scott Intner, Chief Compliance Officer, GW Medical Faculty Associates, will be leading the session “Swimming with Sharks: A Compliance Officer’s Guide on Working with Legal Counsel.”

Their session, and this podcast, will examine some of the friction points in the Compliance-GC relationship and how to make things go smoother.

There are a number of causes of stress in the relationship, they explain. A GC controlling access to the board and senior leadership is one of them. Having legal as the gate keeper can be detrimental to the relationship and the effectiveness of the compliance program.  Another cause for stress is overlapping responsibilities. If legal and compliance are unsure where one ends and the other begins, the lack of clarity can lead to turf battles or issues falling between the cracks.

To make the relationship a positive one they recommend beginning with respect for each other’s role. Second, compliance should be sure to give legal a seat at the table as soon as a potential issue is identified. Having them as a part of the team early can yield multiple benefits. Also, don’t overstep your role and start giving legal advice. That’s for them to do.

To protect privilege, be prudent when confronted an issue that may lead to litigation or a settlement conversation with the government. Bring in the GC’s office, or if your organization doesn’t have one, reach out to outside counsel.

Outside counsel may also be helpful if the investigation is likely to involve senior leadership or delves into an area of specialized expertise that in-house counsel lacks.

Finally, be sure to share information both ways, understand each other’s roles and embrace a commitment to respect.

Listen in, and be sure to check out their session at the Compliance Institute.

By Adam Turteltaub

So what do escalators in Japan have to do with compliance and ethics? As Christian Hunt found, quite a lot. In this podcast the author of Humanizing Rules and founder of the consultancy Human Risk shares an interesting tale.

A community outside of Tokyo found that the rate of injuries on escalators to and from train platforms had grown alarmingly high. The culprit was a tendency of some people to walk or run on the escalator, rather than just stand there. They ended up jostling other passengers, many of whom were older. This led to several injuries.

To combat the problem a campaign was launched requiring people to stand on the escalators. Signs were posted telling people that hurrying up or down the escalator was prohibited. There was no rigid enforcement, just a reliance on people’s goodwill.

At first there was near universal compliance. People saw that no one else was running or walking on the escalators, which provided social proof that standing was the only acceptable behavior. Also, with so many people just standing, it was more difficult to get by them all, effectively forcing people to stand where they were.

Not surprisingly, injury rates plummeted.

Over time, though, compliance rates dropped. For some, resisting the urge to hurry and not be late was just too strong, but, happily, injury rates remained far lower than their peak.

As Christian explains, this case of what he calls “compliance in the wild” – something compliance-related we see in everyday life that we can learn from – provided several lessons for compliance teams:

* Maintaining 100% compliance is extremely difficult for long periods of time

* Even less than 100% compliance can be a big win

* Battling human urges (including simply feeling you are late) is extremely challenging

He also provides a warning that, when seeking to influence human behavior one must be mindful of not annoying them any more than you need to. If you go too far, it may well provoke bad behavior elsewhere.

Listen in, but maybe not while riding an escalator.

By Adam Turteltaub

Veronique Roedolf, the Brussels-based Chief Compliance Officer at Solvay, was focused on developing and enhancing the compliance program.  As she shares in this podcast, the company evolved their efforts and developed what they call a “Four Cluster Compliance Program.” The clusters are:

Protecting a Culture of Integrity

A culture of integrity, as they defined it internally, is about not just following the law but also acting with integrity according to the organization’s values.

Building a Strong Speak-Up Culture

Here they sought to raise the bar, overcome regional differences and help everyone understand that speaking up is not a negative thing. When done in good faith it enables the culture of integrity.

Increasing Third Party Oversight

These days every organization is only as strong as its weakest third party. Due diligence was expanded to include human rights and environmental issues.

Addressing and Mitigating Risk

Compliance and risk management are very much connected. The goal was to detect and address a broader spectrum of risk in an early stage.

Overall the focus is on prevention, which goes hand in hand with being more efficient and effective as a compliance program.

To achieve their goals they worked to become more embedded in and supportive of the business. They secured management commitment by involving leadership from the start. They also made sure there were opportunities or feedback and to have an impact.

To launch and sustain the program the compliance team developed a strategic communication plan with consistent and repeated messaging around two key communication points:

* Acting with integrity in everything we do

* Thank you for protecting our culture of integrity at Solvay

Listen in to learn more about the development and implementation of the Solvay Four Cluster Compliance Program.

By Adam Turteltaub

ESG, or Environmental Social and Governance efforts, may not be a mandate quite yet for healthcare providers, but already there are heavy demands for ESG-related information from regulators, the public and bondholders.

As organizations pull together the data they need to report, says Rebekuh Eley and Rick Kes of RSM, it’s important to make sure that you have a thoughtful process behind it so that the data is accurate, consistent and complete. The last thing an organization wants is to have faulty data.

At the same time, many organizations only scratch the surface of what they can take credit for in terms of increasing health equity for the communities they serve or improving their environmental footprint. That information can be helpful in meeting federal tax compliance requirements.

While some may see ESG as something new and different, they note that community health is squarely under the S (Social) aspect of ESG.

Keeping a good score on your ESG efforts can help demonstrate that your organization is meeting its obligations to the community and 501(r) requirements. It can also earn you credit for your environmental and governance efforts, including the number of community members who are on your board.

Listen in to learn more about ESG and its role in healthcare

By Adam Turteltaub

London-based Keith Read (LinkedIn) is a longtime member of the compliance community and author of the book The Unconventional Compliance Officer: Doing Things Differently. He laments the fact that compliance officers spend their time “pushing”, as he describes it: pushing training, reminders, policies and so forth. That, he believes, leads to compliance fatigue and pushback.

Instead, he is an advocate for creating pull, where employees don’t see compliance as a chore but as an asset. In this podcast he outlines several intriguing practices he has used throughout the year to stimulate pull:

* A compliance passport system to provide a more formal and valuable certification for employees of their achievement in meeting their compliance training requirements

* A competition to identify compliance and ethics issues, which exposed some genuinely real issues

* Creating “licensed professionals”. For example, by completing compliance training you are then licensed to perform your job. This helped identify gaps and tighten up the procurement process.

* Instead of just auditing third parties, providing them with a grade, similar to what is often done for health and safety ratings at restaurants. Vendors came to use good ratings as a badge of pride internally and to help them win additional business

Listen in to learn more about these ideas and others that could stimulate new ways to think about your compliance and ethics program.

By Adam Turteltaub

Pharmaceutical and medical device companies use a number of methods to market their products. Among them, speaker programs get the most attention, often for all the wrong reasons. As Radha Inguva (LinkedIn), Director of Compliance, The CM Group explains in this podcast, while these programs are designed to educate the medical community they often lead to wrongdoing, with “educational sessions” held at wine tastings, lavish dinners and even Hooters.

To avoid problems, she and others are advocates for what is known as the optics test:  basically, asking how a program would look, sound and feel to others. If it doesn’t seem right, it probably isn’t.

From a practical perspective, she advises looking at all aspects of the program. Are the menu selections appropriate? Is alcohol served (which it shouldn’t be)? Is there an appropriate amount of educational content? Is the venue consistent with learning? Are there some doctors attending the same program again and again for no apparent reason other than the free lunch? Are the speakers being paid an appropriate honorarium?

Then, after a program concludes, spend time making sure that it makes sense from both a business and optics perspective.

It isn’t just pharma and medical device companies that need to look at the optics. Health care providers are looking at them, too, with some creating blacklists of restaurants that they will not allow people to visit for presentations.

Listen in to learn more about what makes for a speaker program that’s safe to listen to.

By Adam Turteltaub

Providence is a US-based healthcare system with over 165 years of history behind it. But, the Providence Global Center in India started just in 2020. It was founded as an engineering and operations hub and has a startup culture.

Anitha Vittal, Head, Risk and Compliance, was charged with getting the program off the ground. To get things started she first spent time talking with staff. Happily, she learned that attitudes towards compliance were very positive. While each person may have had a different definition of compliance, there was an eagerness for guidance and, for some, to have others responsible for managing the many legal and regulatory requirements.

After considering how to make the program effective and relevant, she ultimately decided to leverage the start-up culture and position compliance differently. Instead of speaking of it as a control, she positioned it as a way to make each endeavor successful.

This approach includes three key elements:

* Each new hire, as part of their two-day orientation, is given a thirty-minute introduction to the compliance program featuring an engaging story-telling approach

* A compliance champions network

* Encouraging a speak-up culture

In addition, the risk assessment results were characterized in a new way, with each area labeled either “asking for help”, “may need help in the future”, or “no help needed”. Using this nomenclature, she found, was much more successful at providing dimension to risk areas.

Looking to the future, 2023 plans include embedding compliance into the organization’s DNA, exploring opportunities for insourcing resources, and leveraging technology to enhance productivity and bring efficiencies.

Listen in to learn more about what she and Providence are doing.

By Adam Turteltaub

On December 7, 2022 The Speak Out Act became law. Stephen Paskoff, the President and CEO of ELI explains that the law was spurred by the #MeToo movement and the Non-Disclosure Agreements (NDAs) that limited recourse available for victims. It was designed to make it easier for victims to come forward, and for improper behavior to remain hidden.

The new law, limits the ability of employers to include NDAs when it comes to sexual assault and harassment. Specifically, it states: With respect to a sexual assault dispute or sexual harassment dispute, no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in

instances in which conduct is alleged to have violated Federal, Tribal, or State law.

As a result of the law, compliance teams, no doubt working closely with HR and the general counsel’s office, will need to work to ensure that NDAs for sexual assault and harassment are no longer used internally or even externally with vendors. Existing agreements will need to be reviewed as well.

Organizations will also need to recognize that the balance has shifted, making it easier for employees to air grievances publicly.

To get ahead of this issue, they will need to take several steps that they likely should have already, including stressing standards and the value of respect. Training to prevent the bad behavior in the first place will be even more important, as will be good controls to catch it quickly when it happens.

Listen in to learn more about what The Speak Out Act means for your compliance program.

By Adam Turteltaub

Perhaps the biggest non-Covid change in the corporate landscape over the last few years has been the growth of the Environmental Social and Governance (ESG) movement and its call to measure business on more than P&L statements. While some consider it a passing phase, Stuart Pardau, Associate Professor of Business Law, Professional Practice at Miami Herbert Business School at the University of Miami, thinks it is here to stay.

As proof he points out that BlackRock, Vanguard and State Street, with a combined $20 trillion in assets, have stated their commitment to making investment decisions informed by ESG considerations. He also notes that the SEC has proposed new rules to standardize climate-related disclosures.

On the corporate side, bonuses are increasingly tied to ESG metrics, and annual reports are featuring ever more language on the topic. Organizations are also more willing to take a stand on social issues.

With this revolution, though, has come new risks, he notes. Greenwashing – making marginal or fraudulent environmental claims – has grown to be a serious issue with the potential for reputational damage.

With this and other risks have come new challenges for compliance programs. Compliance teams need to help in the assessment of which ESG risks are greatest for their organization. In addition, they must keep in mind that not all of these risks come from aspiring to be a better organization. Some, whether around environmental, forced labor, or other issues, already have laws behind them.

There is also an internal risk around corporate culture. If there is a gap between the professed values and the everyday actions, the chances of a public and embarrassing failure are great.

Listen in to learn more about where ESG is going and the role of compliance along the way.