Doctor “No” Versus Doctor Practical
Better to keep your mouth shut and appear stupid than to open it and remove all doubt. — Mark Twain
Years ago (seems like eons), I wrote a column lamenting lawyers and compliance professionals who operate by telling their clients “No.”
Of course, there are situations when you have to say “No.” But there are too many professionals who confuse providing advice with saying “No.” My concern is not just with the word, “No,” but lengthy explanations of risks and potential negative consequences that substitute for the word, “No.”
The greatest challenge for a professional is to learn the facts, apply the law, weigh the compliance implications, and develop creative solutions that simultaneously serve the business and the legal and compliance interests.
I also hear from business executives and managers that they ask their lawyers and compliance professionals – “what do I need to do to make this idea happen?” They are willing to take the steps necessary to ensure compliance.
In response, the compliance professional has a duty to provide a practical solution, one that can be implemented with minimum burden on the business and ensure the company’s compliance.
The attitude of “No” can have disastrous consequences on a compliance program. If company executives and managers view the compliance function as an obstacle to promoting business opportunities, executives and managers will not call or visit the compliance staff.
A disconnect between business and compliance means that compliance staff will not be provided with important information. In this situation, the risk of misconduct increases.
Doctor “No” frustrates business, discourages communication and undermines collaboration. The tone of every organization has to encourage communications and collaboration. Compliance depends on information and collaboration. Without cooperation, compliance cannot function effectively. Long-winded legal explanations and discussions of threats, risks and legal interpretations are unnecessary and upset business executives and managers.
Chief compliance officers have to provide practical solutions to common issues. Theoretical solutions and blind adherence to “ethical” principles do not serve the business nor does it represent appropriate guidance for common compliance issues.
A common example will help make my point. A due diligence inquiry of a new third-party agent in a high-risk country identifies several red flags. A chief compliance officer views the initial list of red flags and tells the business manager that the company cannot move forward with the potential third party. That is the wrong way to go.
Alternatively, the chief compliance officer should have a frank discussion with the business manager to discuss tasks that need to be done to move forward. A CCO has to come up with ways to address the red flags and move the due diligence forward. As part of that collaborative attitude, the CCO has to discuss the business justification for retaining the agent and make sure that the work needed to pass due diligence is justified by the potential benefits to the business. Sitting back and telling the business manager why the due diligence cannot be completed or why the business needs to come up with a new agent is not productive.
A practical solution is the talismanic standard for compliance. It should be the lifeblood of a compliance-business relationship. With a “can-do” attitude, compliance will build allies, develop positive working relationships and ultimately advance the purposes of an ethics and compliance program.