Compliance Perspectives

By Adam Turteltaub

These are different times. We all know that we are living in them, and that calls for different thinking. But, what does that mean? To help answer that question we spoke with UK-based Jane Mitchell (LinkedIn), an independent consultant who specializes in culture, ethics, values and leadership and Philip Winterburn, Ethics Principal at OneTrust.

As they look around at the business world they see that leaders are struggling to understand what the impact of the pandemic has been on the people that work for and with them. Given how much people have been affected by the last few years, there is a clear need to focus on culture, which Jane describes as the “corporate immune system”. It can be either an asset or liability when it comes to both preventing wrongdoing and managing the now significantly more difficult task of recruiting and retaining talent.

Meanwhile, outside the organization, attitudes towards purchasing are starting to change. Customers, whether consumers or other businesses, want to know where your goods are made, under what conditions and how the raw material are sourced. If they do not like what they see, they are turning away.

So what makes for a healthy organization in this environment? For one, broadening the conversation beyond the numbers and looking at how the organization can be smart, resilient and sustainable. That will be especially true over the next few yeas when a rocky, unpredictable economy is predicted.

In terms of leadership, it calls for CEOs who truly understand what is going on, welcome the truth and encourage people to speak up and openly disagree. It also calls on CEOs to recognize that people want to please them and may be painting too rosy a picture.

Listen in to hear more about how compliance and ethics teams can thrive and lead during these uncertain times.

Post by Adam Turteltaub

While in most cases the pandemic created nothing but challenges, Lola Adekanye (LinkedIn), Senior Program Officer for the Center for International Private Enterprise (CIPE) reports in this podcast that, in some respects, it provided some benefits.

While initiatives to encourage transparency and integrity were stretched, employees endured indefinite periods of working from home and governments were challenged with their budgets, the commitment by citizens and civil society to promote anticorruption and integrity grew.

So, even though the risk for corruption increased, there was also a rise in whistleblowing, particularly in Zimbabwe, Kenya, South Africa and Nigeria. Most of the activity in this area revolved around the acquisition and distribution of Covid-related supplies, not surprisingly.  The transportation sector also saw a rise in corruption.

Government procurement has continued to be a sore point, with many cases of collusion, price-fixing and kickbacks. But, consumer goods have seen a decline.

For the long term she sees a collision between two forces. On the one side are traditional, authoritarian regimes with higher corruption. On the other side, which she thinks will prevail, are young people and institutions coming together to find ways to hold government and companies accountable.

Listen in to learn more about the present and future of anticorruption efforts in Africa.

By Adam Turteltaub

Many organizations have grown accustomed to and developed protocols for vetting third parties for issues such as anticorruption compliance and privacy. But, with the rise of ESG, suppliers need to be reviewed for exposure on a much wider scale than ever before.  Can existing protocols be used, or do they need to be replaced?

To find an answer we spoke with Rebecca Wellum (LinkedIn), Vice President Compliance & Diversity at GEOTAB. In this podcast she explains that in many ways ESG is a repackaging of things many organizations have been doing for some time.

To make your process effective she recommends starting by defining the risk areas for your industry. Then, look at your material sourcing to understand where everything in your supply chain is coming from. Learn not just what the supplier is providing and how, but it’s suppliers practices and sources as well.

When assessing vendors, she has found that in-person meetings are invaluable. It provides an opportunity to assess the cues that something may be amiss. These can include environmental health and safety papers and certifications that are out of date or a lunchroom that doesn’t look quite rights. Data points like these can give you a strong sense of the treatment of labor, and even the organization’s own sourcing methods.

She also recommends insisting on audit rights upfront. That’s when your organization has the most leverage. And be sure, she advises, to allow for not just paper, but in person audits, including on a surprise basis.

Small and medium-sized organizations need to be aware, she cautions, that this is not a simple task, but it is an essential one. Even if the company is not public and subject to the scrutiny of the SEC and shareholders, its customers are already likely to be increasing their ESG investment and expectation of their suppliers.

She also highly recommends taking the time to document what you have done. Keep audit trails and be prepared to demonstrate what steps you took while selecting, onboarding and periodically reassessing your suppliers.

Listen in to learn more, including the growing importance of assessing diversity as well.

By Adam Turteltaub

The relationship between ESG and compliance is as of yet not a fully defined one.  That’s not surprising given both the newness of ESG and the many similarities between it and compliance.

While many see an overlap between the two, Reginald Youngblood, Associate Vice President Corporate Compliance at AT&T, sees more of an overlay with existing frameworks for managing risks.  As with other risk areas, there is a need to look at the financial impact, how often it occurs, the inherent risk and how it affects the business.

He also observes that, like compliance, ESG touches an enormous cross section of the enterprise, albeit in a somewhat different way.  By becoming involved with ESG the compliance team, he believes, can have more contact with the organization as a whole, address issues in a new way and help define what ESG means to the organization.

This approach has enabled the AT&T compliance team to open doors and become an active partner in projects that they never would have been asked to be a part of before.  In addition, it has provided compliance with greater visibility into the organization while acting as a bridge between compliance and the business.

As a side benefit, the compliance team has also discovered new repositories of data within the firm, enabling it to better assess risk.

In the end, he sees the relationship between ESG and compliance as a very happy one with great opportunity, earning compliance a seat at the table while creating greater appreciation for the risk management process and the focus on values and integrity that have long been a staple of compliance programs.

Listen in to learn more about how to leverage the relationship with ESG.

By Adam Turteltaub

One day the war in Ukraine will stop, and many companies will be looking to either enter or return to the country. But what compliance challenges might they face?

In tis podcast Eric Hontz, Director-Center for Accountable Investment at the Center for International Private Enterprise (CIPE) shares that business may be pleasantly surprised when they return. Despite the war the government has been functioning on multiple fronts and has continued to pass reform bills. They are particularly focused on EU-related reforms as a candidate for membership.

In addition, a great deal of government power has moved outward from the central government to mayors and regional governments, enabling greater transparency into how funds are being used.

All of this has made the corruption risk in the country less.

When doing business in the country, Eric recommends enlisting civil society groups as an ally. There are a large number of progressive business groups, he reports, working to stem corruption and encourage innovation. The success of their efforts can be seen in the many technology companies across the country.

After the war ends, he expects the country to continue its trajectory away from corruption. There is a growing consensus that corruption weakens the country, and he expects returning soldiers to have far less sympathy for it.

As for Russian sanctions, he does not see much risk when doing business in Ukraine.  Outflows of investment by Russians began long before the war.

Listen in to learn more about what to expect when the day comes that your organization begins working in Ukraine.

By Adam Turteltaub

For decades, if not centuries, the idea of being professional tended to focus on a cold, cognitive approach to work. Emotions were supposed to be secondary to a much more rationale form of management and work environments.

In this podcast, Gael O’Brien, executive coach and columnist for Business Ethics Magazine and The Week in Ethics, shares the research of the late Wharton School Professor Sigal Barsade, who examined the impact of emotions in the workplace.

Her work focused on how leaders can get culture right. Emotions, in particular compassion, were found to be very important.

She also found that employees who feel loved at work perform better. Kindness, caring and feeling connected have a strong impact on employee satisfaction and retention. In fact, she found that employees are 10.4 times more likely to leave because of a toxic culture than they are to depart because of compensation.

To create the right environment she is an advocate for an “emotional culture”, which she defines as the emotions necessary for a group to meet its goals. This culture, Barsade found, is transmitted through subtle signals such as facial expression and body language, especially of leaders. That’s a challenge in these Zoom times when traditional queues may be missing.

To get the right culture she advocates several steps including:

* Executives verbalizing, modeling and rewarding the emotions they want to cultivate

* Mangers communicating that information to front-line employees

* Surveys and interviews that ask employees what emotions they see in colleagues around them

It’s both an intuitive and counterintuitive approach.

To learn more about Professor Barsade's work, read some of her articles in Harvard Business Review (article 1 and article 2). You can also see the video of a talk she gave.

And of course, click above to listen to our podcast with Gael O’Brien.

By Adam Turteltaub

The recently-released Health Care Fraud and Abuse Control Program FY 2021 report contains a treasure trove of information for healthcare compliance teams. To gain a better understanding of lessons to be learned from this document we sat down with SCCE & HCCA board member Gabe Imperato, Partner at Nelson Mullins.

The report makes clear, he explained, how much coordination and review there is now among the Office of Inspector General at HHS, the US Department of Justice and also CMS. As a result, a subpoena, or even an inquiry needs to be taken very seriously. Compliance teams need to treat these external actions as if they are a report of non-compliant activity.

The report also reveals that there has been an increase in cases based on failures of organizations to appropriately collect copays. Some organizations have taken egregious activity that could be characterized as ignoring the obligation. In other cases the provider has made what it considers to be a reasonable effort to collect the payment – asking at time of service, sending follow up letters – others think that more could be done such as calling patients and setting up a payment plan. With no clear definition of what’s reasonable, the potential for a whistleblower case is high.

The report also illuminates the challenges of Stark and Antikickback cases. In his opinion these cases makes it clear that if you are looking at a circumstances where on the one hand there is a potential source of business and on the other hand a potential source of revenue, and there is a financial relations between the two, it is best to bring in competent outside counsel to determine if there may be a violation of these highly complex laws.

Kickback cases are very popular with qui tam attorneys, he notes, because of the difficulty in defending them completely.

Looking to the future, Gabe sees a large number of Covid-related fraud cases that will likely take years to play out.

Listen in to learn more, and be sure to read the report.

By Adam Turteltaub

The ethics and compliance team at the University of Southern California (USC) wanted to revamp their program. Stacy Giwa, Vice President Culture, Ethics and Compliance, and Marisa Hardy, Assistant Director Compliance, explain that they went into the initiative with several overarching goals. They wanted to:

* Bring values and ethics-related behaviors to the compliance program

* Provide reasonable assurance to stakeholders that there are core compliance programs elements in place, no easy task in a large, complex organization

* Be more proactive, and identify gaps, trends and themes so that one part of the organization could learn from another

* Focus on partnership at every phase and build understanding of why a compliance program is important

To make the evolution a success they engaged the compliance and ethics committee to help enhance the university’s program’s standards and framework. As a part of that, they framed out what compliance is responsible for and what belongs to other departments. They also obtained strong leadership support.

The resulting program included an assessment tool that enabled both the team and the individual units of the school to evaluate their elements of the program. They also embraced transparency, letting departments know what information they are capturing and the dashboard they were using.

Findings were reviewed with departments and characterized in a positive way, as opportunities for improvement. Improvements plans were set with 1-3 year timeframes, which set goals, but did so in a less overwhelming way.

Their approach earned them overwhelmingly positive feedback from over 25,000 members of the USC community.

Listen in to learn how they did it and to get ideas for how to successfully evolve your compliance program.

By Adam Turteltaub

For a time monitorships were, if not endangered, out of favor.  After many years of embracing them, the US Department of Justice had begun calling for cost benefit analyses and looking for alternatives.

Then in 2021 Deputy Attorney General Lisa Monaco gave a speech announcing that the previous policy had been rescinded and that more monitorships would be coming in deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs). “I am making clear that the department is free to require the imposition of independent monitors whenever it is appropriate to do so in order to satisfy our prosecutors that a company is living up to its compliance and disclosure obligations under the DPA or NPA.”

In this podcast Dykema’s Mark Chutkow and Jason Ross explain what to expect when a monitor is appointed. First, recognize that different monitors will approach the job differently. You will need to understand if they are pragmatic, open-minded, familiar with the industry’s risk and challenges, and have a record as a monitor.

Typically, these questions are already answered since companies generally have a say in who their monitor will be. But, if your organization is the exception, do your homework on the monitor.

Take time, too, to understand what the scope of the monitorship is.

Also, make sure employees understand the role and benefits of a monitor. Leadership and the compliance team need to work to reduce  any negative impressions that employees may have so as to facilitate a construction relationship. To that end, take the time to educate employees that the monitorship will, in the long run, help them.

Once the monitor arrives, expect him or her to want to conduct interviews with individual at all levels of the organization in an effort to better understand the company. The monitor will likely want to understand the pressures middle managers are under and the expectations they are setting for those who report to them. Front line workers will likely be asked if they are comfortable speaking up and raising issues. The monitor may even reach out to customers and suppliers.

As for the compliance program, itself, expect the monitor to focus on whether it is properly resourced and implemented.

Turning to the ongoing working relationship during the monitorship, they warn that there will be tension periodically since the monitor is an outsider, but there needs to be some level of unity to ensure that the relationship is productive.

Finally, they discuss the importance of metrics.   The DOJ has made it clear that it expects data analytics from organizations when it comes to their compliance programs.

Listen in to learn more about the changes and how to prepare for and succeed during a monitorship.

By Adam Turteltaub

Joe Murphy (LinkedIn) is rightly considered one of the founders of the compliance profession, joining the field when compliance barely existed. Since then, he has been not only a member of the community, but an innovator and, although he might blush at the term, a philosopher. He constantly explores what compliance is, could be and should not be.

In this podcast he shares his insight as to how the profession has evolved in the almost 40 years that he has been a part of it.

Looking at the changes over the decades, what has surprised him the most is the large number of people who work in compliance but are not a part of corporate compliance programs as we know them. He cites individuals in anti-money laundering (AML), environmental compliance and privacy as examples. They often operate outside of the overall compliance effort and may not have the real access to power needed to be effective.

What should have been done differently at the start of the compliance field? In hindsight he believes there should have been a greater emphasis on having a strong, independent compliance officer, truly at the top level of the organization. That’s where the greatest risks are, he notes.

He offers another thought in what should have been different: There should have been a greater focus on incentives. Companies continue to struggle with incentives and rely upon discipline more heavily than they should or could.

What would he change today? First, our attitudes towards conflicting areas of compliance and law, such as areas where privacy law may get in the way of conducting an investigation. Conflicts have always existed, he observes, and compliance teams need to navigate them.

Compliance also needs to navigate what he sees as treacherous seas created by those academics who have no practical experience in compliance but, nonetheless, write articles about it that then get cited and repeated, even if they are wrong.

Joe closes the conversation by looking to the future.  Not surprisingly, he encourages us in compliance to stand up for the profession and keep others from defining us.

Listen in to learn more from a truly veteran compliance professional.