FCPAméricas Blog
Engaging Operations Further: What Compliance Officers Can Do and Say
6.28.2012
In the last post, FCPAméricas offered three ways in which FCPA compliance officers can bring operations units into the compliance conversation. In this post, we discuss other things that compliance officers can do and say to engage them further once they are there.
1. Stress what Operations Can Do, Not what It Cannot Do. Some of the most successful compliance offices are the ones whose approach is about empowerment. Tone can have consequences. If the baseline is that international operations are high risk endeavors, then the compliance office’s role is to find ways to help the business reduce and manage that risk. At the end of the day, compliance and operations are on the same team. Both need to be committed to helping the company succeed in a compliant way.
This is not as easy as it might seem. To do this, compliance officers must walk a fine line. On one hand, they need to be able to say no – or at least to have some sort of escalating consequences when compliance boundaries are crossed. On the other, they need to be careful to avoid “client capture,” i.e., being so supportive of business goals that risks are not fully attended to. They must balance staying firm when necessary, while working to avoid the perception that they are in-house policeman. Michael Volkov warns the compliance world of the Dr. No syndrome.
How do successful compliance officers navigate these channels? Very carefully. The answer of “no” should be used sparingly and after lots of open conversation. Being able to identify the “sweet spot” between the extremes of saying no to everything, and tolerating too much (or identifying when there simply is no sweet spot,) is a significant part of the art of compliance.
2. Make the Business Case for Compliance. Certainly business units might see short-term gains in engaging in corruption. But the compliance officer is positioned to make the business case about the long-term benefits. Above and beyond the obvious costs and damaged reputation associated with enforcement actions, there are other reasons to heed compliance. They are succinctly summarized by James Tillen, the Coordinator of Miller & Chevalier’s FCPA and Anti-Corruption Practice Group:
Although the risk of prosecution often drives companies to implement compliance programs, many recognize that compliance can result in other benefits. This includes improved employee morale, attracting business partners who are seeking to reduce their own risk, and reducing the economic waste associated with a lax compliance culture, such as the opportunity for employee fraud damaging the company and the elimination of unnecessary intermediaries. Establishing a reputation as a clean and compliance business also reduces the likelihood that government officials will solicit bribes from employees.
3. Build Compliance into Employee Evaluations. If a sales manager gets a “green” rather than an “orange” or “red” in the Compliance category of her annual employee review, and that designation gets her closer to bonus eligibility, she will be more likely to take compliance seriously. Charles Cain, Deputy Chief of the FCPA Unit of the SEC’s Enforcement Division stated at this month’s Compliance Week 2012 Annual Conference that the most successful compliance programs he has seen are the ones that create incentives for compliance in employee reviews.
Evaluations also create the opportunity to use competition to drive compliance. Sales teams are competitive by nature. If you want to make them more interested in compliance, measure them against other teams in the company. Give awards for compliance innovations. Highlighting successes will draw regular attention to the importance of compliance to your company’s business.
The potential downside to this approach is that compliance might get too wrapped up into personal interest. Compliance works best when it is part of a company’s culture. By monetizing it, you run the risk of undermining it. For example, you do not want to create disincentives for reporting. Evaluations should be structured to strike this careful balance.
4. Make Processes Easier. Compliance officers can make compliance less burdensome by removing obstacles and streamlining processes. A due diligence vetting and tracking system can be set up in a centralized location. A training program that is periodic can ease the burden on sales teams because it is predictable – they can more easily build the trainings into their schedules. Compliance audits can be built into internal audit’s annual plans. To the extent that the compliance office can take advantage of pre-existing company systems, they can reduce burdens. By reducing headaches, your program is more effective.
The FCPAméricas blog is not intended to provide legal advice to its readers. The blog entries and posts include only the thoughts, ideas, and impressions of its authors and contributors, and should be considered general information only about the Americas, anti-corruption laws including the U.S. Foreign Corrupt Practices Act, issues related to anti-corruption compliance, and any other matters addressed. Nothing in this publication should be interpreted to constitute legal advice or services of any kind. Furthermore, information found on this blog should not be used as the basis for decisions or actions that may affect your business; instead, companies and businesspeople should seek legal counsel from qualified lawyers regarding anti-corruption laws or any other legal issue. The Editor and the contributors to this blog shall not be responsible for any losses incurred by a reader or a company as a result of information provided in this publication. For more information, please contact Info@MattesonEllisLaw.com.
The author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author.
© 2012 Matteson Ellis Law, PLLC
Post authored by Matteson Ellis, FCPAméricas Founder & Editor
Comments
July 2nd, 2012 at 8:37 pm
[…] FCPAméricas next blog post, we will discuss ways that compliance officers can use the art of compliance to better engage […]