With an increasing focus on the value of an ethical culture, I have been reading more about chief ethics officers, the separation of ethics and compliance, and the traveling ethics officer who meets with employees to discuss ethics. Forgive me for being a contrarian but everyone is missing the point about an ethical culture. A company does not instill and promote an ethical culture by...
In the compliance arena, like in many others in life, we value simplicity. I have repeatedly stressed the importance of compliance initiatives that are relatively simple. Too often, lawyers and compliance professionals confuse complexity with efficacy. We can all spin together complex compliance controls that address every possible permutation of events, contingencies and possibilities. That is not the challenge. Compliance is a delicate balance between...
In the wake of ever-constant business scandals (e.g. ZTE, VW, Takata, Odebrecht), chief compliance officers have to refresh their approach and strategy. Everyone agrees, or at least I think they should agree, that a company’s most effective control is its culture. For CCOs, selling the board and senior executives on this point should not be very hard. The research and common sense often come together...
Humans have an innate desire to complicate things. When it comes to ideas, professionals are no different – compliance consultants, lawyers, financial advisers and others enjoy solving complicated problems. Such an approach, however, does a disservice to clients and other professionals. Creating complications is not a sign of professional talent; rather, an effective consultant, attorney or financial adviser should be able to take complex issues,...
Two executives were charged last week with criminal violations in the Southern District of New York relating to Valeant Pharmaceuticals activities. These charges are the first of more to come in an ongoing investigation focusing on Valeant’s corporate demise from a high-flying pharmaceutical company. I have written before about Valeant’s rotten culture, slavish devotion to quarterly performance, and short-sighted management culture that ultimately bred a...
Lauren Connell, Managing Associate at The Volkov Law Group, joins us again for a posting on the Wells Fargo scandal. Lauren can be reached at [email protected]. Wells Fargo’s cultural tone is not easily segregated between “top,” “middle” and “bottom.” Despite the recent cross-selling scandal, in which the CFPB led an enforcement action whose fines total a whopping $185 million, Wells Fargo’s CEO John Stumpf reluctantly...
I am not one to beg but I have decided I have nothing to lose here – please, when it comes to compliance, everyone has to adopt a new mantra. The purpose of compliance is not to prevent legal and code of conduct violations. Such a purpose is way too limited in scope and almost guarantees failure, because at one time or another, company employees...
The compliance profession faces many challenges. Some are more important than others. When it comes to evaluating performance, or measuring compliance programs, the profession has a steep uphill climb. Unfortunately, measuring compliance programs and defining what an “effective” program is an issue that requires extensive research and analysis. Justice Potter Stewart’s famous words defining “obscenity” – “I know it when I see it,” just will...
Warren Buffet, the Oracle of Omaha, understands the importance of corporate culture and adhering to a code of ethics. He has been quoted: Lose money and I will forgive you. Lose even a shred of reputation and I will be ruthless. …… Wealth can always be recreated, but reputation takes a lifetime to build and often only a moment to destroy. Buffet’s implicit message is unmistakable – culture, reputation and...
Webinar: CCOs and the Board of Directors: Establishing an Effective Relationship May 24, 2016 12 PM EST Register Here Chief Compliance Officers have to establish a positive and productive working relationship with the corporate board of directors. An effective reporting relationship is essential to ensuring an effective ethics and compliance program. CCOs have to attend to this relationship, learn how to use it effectively, and...
