Consider it one of my (many) pet peeves – companies claim they have an “ethical” culture and cite the consistent statements by the CEO of his or her commitment to “ethics and integrity.” That’s it, that’s all, we have an ethical culture. Case closed, deal done, let’s move on to the next issue. Talk about bloviating and hot air – it is the prime example...
Companies struggle to put in place an effective program for conducting internal investigations and meting out discipline. One of the first questions which internal stakeholders struggle with is who is responsible for the internal investigation issue. Auditors claim they are on the front lines and should be the primary investigators; lawyers claim they need to run the show to protect the privilege; and compliance officers...
Contrary to what parents always tell their kids, when it comes to the authority of a Chief Compliance Officer, appearance is everything. This may be another in the long line of profound grasps of the obvious, but if a Chief Compliance Officer is a member of the C-Suite, is seated in the same area as the C-Suite, and attends all important C-Suite meetings, then chances...
Some areas of compliance are truly nascent. For a profession which is undergoing a radical change in terms of demand and new technologies, more research is needed and greater understanding of program measurements. The more subjective the measurements used, the more risk that companies can manipulate or even ignore significant compliance concerns. One stark example in this area is the use of hotline complaints. Every...
Several years ago, the SEC sent shockwaves through the private equity and hedge fund industries. The SEC launched an industry investigation focused on the legal principle that foreign sovereign wealth funds were a part of foreign governments and led by foreign officials under the FCPA. The implications of such an interpretation meant that private equity companies and hedge funds had to exercise caution in their...
William James used to preach the “will to believe”. For my part, I should wish to preach the “will to doubt”…. What is wanted is not the will to believe, but the will to find out, which is the exact opposite. – Bertrand Russell Skeptical Essays, 1928 “Man’s greatest asset is the unsettled mind.” – Isaac Asimov In the coming years, the pressure on corporate...
The Justice Department and the SEC have been busy. More enforcement actions are coming to a close — Avon, Weatherford, and others are likely to be resolved before the end of the year. There is an inevitable fourth quarter push to close out enforcement actions and clear the plate. It is always interesting to see how the FCPA Paparazzi translates FCPA enforcement actions in its...
Compliance is becoming more and more specialized. Whatever is the soup du jour, or current high-risk operation, becomes the focus of compliance education, marketing, and surveys. After the passage of the PATRIOT Act in 2001, the focus was anti-money laundering compliance programs. In the last few years, the focus has now turned to anti-corruption compliance. Compliance officers usually get dragged into this trend and focus...
It is important to understand one’s limitations in life. In the world of compliance, CCOs need to be realistic when they start a new job with a new company. It also means that a CCO has to be honest with himself or herself. Every person knows deep down their strengths and weaknesses. CCOs know this as well. Some CCOs (and people) have a “can do”...
Companies are always trying to do more with less. Senior executives will spend hours designing policies and programs to stretch dollars, resources and reduce costs. Committees are established for such research projects, consultants are brought in and solutions are reviewed and eventually implemented. Senior managers could reduce the time, the expense and angst involved in this process by just applying common sense. Companies waste inordinate...
