Integrity has no need of rules. – Albert Camus Corporate decision-making ignores important principles and sometimes, common sense. With the increase in corporate compliance programs, corporate boards and senior executives need to take a moment to address one important issue – the importance of creating an ethical culture. For some reason, corporate boards and leaders like to focus on the tangible aspects of ethics and...
In the wreckage of a corporate FCPA enforcement action, a company has to answer two important questions. First, how did the conduct occur without senior executives and the Board learning or suspecting that such conduct was occurring or could occur? Second, how did the wrongdoers obtain access to the money needed to fund the bribery scheme? I know these two questions are fairly obvious, but...
Ethical companies, by definition, have a robust system for internal organizational justice. A company that suffers from unequal treatment of similarly situated executives, managers, and employees cannot maintain an ethical culture. Unequal justice will undermine employee morale, reporting of misconduct, and overall productivity rapidly. Cynicism breeds contempt, and there is nothing like employee discontent when it comes to the sustainability of corporate productivity. To ensure...
The SEC’s FCPA enforcement action for $14.6 million against Bristol-Myers Squibb (“BMS”) in China provides a textbook example of how things can go wrong in China. For the compliance practitioner (as well as CEO and senior executives) in the pharmaceutical and medical device industries, the BMS enforcement action should be read and digested as a quick checklist of important principles. The facts underlying the BMS...
Every company wants to create a culture of ethics. If the senior leadership ignores or downplays a culture of ethics, they have narrowed business opportunities for the company, its shareholders, and other stakeholders. A culture of ethics does not guarantee financial success, but it does add to the bottom line financial performance of a company. There are a number of necessary ingredients that have to...
Compliance always boils down to people and interpersonal relationships. No man is an island, and no one can go it alone in compliance. One essential requirement for effective compliance is the ability to engage colleagues and your audience. Many senior executives are smart people –we all understand that. But too often senor executives embrace an interpersonal style of cheerleading. It allows them to appear to...
A Chief Compliance Officer has a number of important relationships to maintain in an organization. Aside from the support of senior level executives, the CCO has to build an effective working relationship with the board and the relevant board committee responsible for ethics and compliance. From an operational standpoint, a CCO has to use the board to advance an issue when frustrated by senior management....
The Volkswagen scandal will be studied for years. One of many themes from the Volkswagen scandal will rest on the complete absence of any commitment to corporate governance. Volkswagen’s weird corporate structure (it is owned in large part by a family) and labor and government interests resulted in a mish-mosh of influences that permitted the family to exercise almost unbridled control over corporate functions, leaving...
Contrary to the opinion of many in the FCPA space, the BNY Mellon settlement and the looming actions against six major financial institutions for hiring practices is not a big shock or surprise. The SEC is not raising a new or novel interpretation of the FCPA. After all, assuming an actor has corrupt intent, there is no real question as to whether hiring a person...
One person who does not have a conflict in evaluating a company’s reputational risks should manage a company’s reputation. This approach starts with one basic requirement – the board and the CEO have to agree that a company’s reputational risks should be managed and mitigated. As an initial step, the company has to assign responsibility for reputational risk to a senior executive responsible for risk...
