[1]This guest post was written by Alexandre Serpa, a compliance professional based in Sao Paulo, Brazil.
The act had barely been enacted and the headlines were everyone, stating “Companies start to implement Compliance Programs to comply with the new law …” The articles in newspapers, blogs, magazines and other media either stated explicitly or implied that the implementation of a compliance program was now ‘mandatory’ under the new law. Readers were given the impression compliance is a pre-requisite for fulfillment of the Law. And
Personally, I believe that this hype is not justified at this time. First, consider the following scenario:
You have a task: drive a nail into a wooden board.
The majority of us, if not all of us, immediately think that we “have to” get a hammer, because the hammer is essential for the task of driving the nail into the wooden board.
To the majority of us the hammer becomes more important than the task itself. But we forget that the hammer is just a tool that ‘may’ help us complete the task. It is perfectly possible to drive a nail into a wooden board ‘without’ using a hammer. If we do not have a hammer readily available, we can use another wooden board, the sole of our shoe, a rock, a pair of pliers, or our own hands (unlikely, I know, but possible) to accomplish the task.
On the other hand, if we do decide to use a hammer, we will face a set of challenges and variable situations. The first question relates to the type or size of hammer (there are many variations of hammers available) that would be most appropriate for the task. We also need to consider the training that we need to use the hammer – I know many people who, if untrained, might chip the wooden board, bend the nail, or even hit – and hurt – his own finger (or the finger of another helping hand).
A “Compliance Program” could be the “hammer” in our story.
Law 12,846 is quite clear in stating that what a Company can not (should not!) do is “bribe public officials”, “use intermediaries to hide illicit activities” or “rig public bids.” These are the “tasks” in question.
The law does not state that companies “have to” implement compliance programs. It merely provides that compliance programs may be used (and will be considered!) as mitigating factors in calculating sanctions and penalties. In other words, compliance programs will only be a consideration after the company is already caught disobeying the law.
Although compliance programs are important tools (when implemented as part of an appropriate corporate governance structure which starts with proper tone at the top, and includes selecting appropriate professionals to drive them), they are simply a natural part of the continuous improvement of governance. They are not a magic solution (like a hammer) to all problems. Ultimately, to comply with the law, a company needs simply not to bribe, not to defraud public tenders, and not use intermediaries to hide illegal activities.
It is true, tools can be used to simplify the performance of a task. But the use of the tools is neither mandatory, nor is it a guarantee that the task will be executed properly. In fact, in some cases, the tool itself may become a bigger problem than the actual task. We must also keep in perspective the fact that the tool should never become more important than the original task. We must be thoughtful when deciding the right moment to use the tool.
This is certainly not to say that compliance programs are unnecessary or should not be implemented. After all, I have dedicated my own profession to the topic of compliance. We simply must keep in mind that there is an appropriate order to implementation, with each component of corporate governance calmly evaluated and implemented in due course.
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