FCPAméricas Blog
Siemens Speaks to FCPAméricas, Part 2: Changing Compliance Culture at a Major Multinational
4.04.2013
More than four years have passed since Siemens settled charges of international anti-corruption violations. Now, Siemens speaks to FCPAméricas about its experiences improving its anti-corruption compliance program. This is the second post in a three part series. See Part 1 here and Part 3 here.
In the interview, Siemens’ Deputy Head for Compliance Investigations, Mark Gough, explains to FCPAméricas some of the things that the company has done to change its compliance culture, and how it can tell that the culture has changed (FCPAméricas has previously discussed these issues here).
FCPAméricas: How has your compliance program evolved since 2008?
Over the last few years, we have been successful at moving many of the controls from compliance back to the business units as the business really owns compliance and compliant behavior. Take gifts and entertainment as an example. We started with a detailed scorecard system that had to be filled out for every gift or entertainment with anyone, even if it was just a cup of coffee. It was extremely restrictive. Now, we only require the scorecard for expenses related to meetings with government officials. Everything else is left up to the business unit’s own judgment, because they now know what behavior is expected. At first, the risk had to be tightly controlled. Then, bit-by-bit, we were able to withdraw as the business assumed compliance ownership on many issues throughout the company. This progress was reflected in 2012, when the SEC / DOJ appointed Compliance Monitor wrote their final report on the health of compliance in the company – they said our efforts were commendable and gave us a clean bill of health. However, they left us with a message – “Remain vigilant”!
Also, in the early days after the scandal, the business looked at Compliance as unnecessary, as something that may have made them uncompetitive, with a negative impact on its bottom line. This argument does not exist anymore at the company. It is universally understood that the small cost that goes along with building and maintaining a compliance function is nothing compared to the harm that can result without such a program in place. The business has also had more exposure to the practicalities of risk management in terms of violations of the FCPA or similar legislation. If the only access you have to a compliance program is web based or one face to face discussion per year, it is hard to see the value in compliance. But when you are directly involved, you understand it and this is the strength that comes from the business taking more responsibility for risk.
We have seen attitudes shift. At first, we would get emails from managers around the company complaining that their employees were mistreated during internal investigations or that investigations take too long. Now, those same leaders send us unsolicited emails saying that our processes are working, they praise the compliance function for being fair, professional, and efficient and address risks to their operations. This is a cultural shift. It is also seen in internal reporting of possible violations. At first, most people made their reports anonymously. Today, there are many more people choosing to identify themselves because they know they will be treated fairly and will be protected from harm.
Part 3 of this series discusses compliance innovations developed by Siemens.
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@2013 Matteson Ellis Law, PLLC
Post authored by Matteson Ellis, FCPAméricas Founder & Editor
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April 6th, 2013 at 12:07 am
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