FCPA Compliance Report

Yesterday I considered the need for due diligence in the management of third parties. Today, I want to take a deeper dive and explore the levels of due diligence. Due diligence is generally recognized in three levels: Level I, Level II and Level III. Each level is appropriate for a different level of corruption risk. The key is for you to develop a mechanism to determine the appropriate level of d...

In this episode, I visit with Adelle Berger, who recently became the Chief Integrity Officer at Louis Berger. Some of the topics we discuss are: Why is her title “Chief Integrity Officer” as opposed to Chief Compliance Officer or Chief Ethics and Compliance Officer?; What is the role of a CCO around integrity or how does she see her role at Louis Berger different that a traditional CCO?; Does she...

Most companies fully understand the need to comply with the FCPA requirements around third parties as they represent the greatest risks for an FCPA violation. However, most companies are not created out of new cloth but are ongoing enterprises with a fully up and running business in place. This means they may need to bring resources to bear to comply with the FCPA while continuing operating an ong...

The next step in the five-step process is the Questionnaire. The term ‘questionnaire’ is mentioned several times in the 2012 FCPA Guidance. It is generally recognized as one of the tools that a company should complete in its investigation to better understand with whom it is doing business. The questionnaire should be mandatory step for any third party that desires to work with your company. I tel...

In this episode Matt Kelly and I take a deep dive into the recent kerfuffle involving United Airlines and its policy which prevented to teenaged girls from boarding a flight wearing leggings. Was United within its rights to exclude the passengers for inappropriate dress? Is the policy valid? Did the gate agent receive appropriate training to make their decision? In the world of today, social media...

The Evaluation, in Prong 10, Third Part Management asks, “What was the business rationale for the use of the third party in question?” This question is one of the most basic tools to operationalize your compliance program and should form the basis of your third-party risk management process.  It is common sense that you should have a business rationale to hire or use a third party. If that third p...

In this episode I visit with John Hanson (AKA 'the Fraud Guy') who is also the founder of the International Association of Independent Corporate Monitors (IAICM). He discusses why he founded the group, the needs it hopes to address, the resources available to members and others  and how someone can apply for membership. the Association's website is icicm.org. For additional information you can con...

Day 1- The Third-Party Risk Management Process This month, I will consider the risk management of third parties in an operationalized compliance program. As every compliance practitioner is well aware, third parties still present the highest risk under the Foreign Corrupt Practices Act (FCPA). The Department of Justice Evaluation of Corporate Compliance Programs devotes an entire prong to third pa...

I conclude my One Month to Operationalizing your Compliance Program series by discussing how you can put your compliance program at the center of corporate strategy. An article in the Harvard Business Review (HBR) by Frank Cespedes, entitled “Putting Sales at the Center of Strategy”, discussed how to connect up management’s new sales plans with the “field realities.” Referencing the well-known Sam...

Show Notes for Episode 46, for the week ending March 31, the On the Road to Prague Edition  In this episode, Jay and I have a wide-ranging discussion on operationalizing compliance through business processes. We discuss:  Why powerful people fail to stop bad behavior by their underlings. Click here for the article. Some policy management lesson, courtesy United Airlines. Click here for Matt Kelly’...

The Evaluation of Corporate Compliance Programs, Prong 6, Incentives and Disciplinary Measures states:  Incentive System – How has the company incentivized compliance and ethical behavior? How has the company considered the potential negative compliance implications of its incentives and rewards? Have there been specific examples of actions taken (e.g., promotions or awards denied) as a result of...

In this episode I visit with Brandon Essig, a former DOJ prosecutor when the Yates Memo was released. He discusses the impact of the Yates Memo inside the DOJ and the triage that prosecutors use on cases in response. For Brandon's blog post on the topic on Linkedin, click here.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Even with a great Tone-At-the-Top and in the middle, you cannot stop. One of the greatest challenges of a compliance practitioner is how to affect the ‘tone at the bottom’. In an article in the Spring 2012 Issue of the MIT Sloan Management Review, entitled “Uncommon Sense: How to Turn Distinctive Beliefs Into Action”, authors explored the “often overlooked, critical source of differentiation is [a...

In this episode I visit with Jonathan Armstrong on his views on the new DOJ Evaluation of Corporate Compliance Programs. Armstrong provides a detailed analysis of some of the key differences between how compliance is operationalized in the US as opposed to the UK and EU countries. He explains how the enhanced requirements for root cause analysis, risk assessments and investigations and the supplem...

The Evaluation of Corporate Compliance Programs makes clear, a company must have more than simply at good ‘Tone-at-the-Top’; it must move it down through the organization from senior management down to middle management and into its lower ranks. This means that one of the tasks of any company, including its compliance organization is to get middle management to respect the stated ethics and values...

In this episode, we take a look at a recent speech given by NY Fed Chairman William Dudley in London where he addressed improving corporate culture. Dudley provided three recommended steps. First, a bank must decide on its purpose and core values—or, as Dudley put it, “What are you for?” Second, after this identification of purposes and values, you can measure how well the workforce is striving to...

Under the Evaluation of Corporate Compliance Programs, Prong 2, it states: Senior and Middle Management Conduct at the Top – How have senior leaders, through their words and actions, encouraged or discouraged the type of misconduct in question? What concrete actions have they taken to demonstrate leadership in the company’s compliance and remediation efforts? How does the company monitor its senio...

In  this episode, I visit with Erica Salmon Bryne, EVP at Ethisphere on the 2017 World's Most Ethical Companies honorees. Erica goes into how the corporate compliance programs are evaluated, what the companies disclose to Ethisphere and how the winners consistently demonstrate compliance is good for business. Check out more information on Ethisphere's site by clicking here.  Learn more about your...

  In this episode, Jay and I have a wide-ranging discussion on why good compliance and is good for business. We discuss:  LRN Ethics and Compliance Program Effectiveness Report. Click here for Report. Ethisphere’s 2017 World’s Most Ethical Companies. Click here for Report. Why good compliance is good for business. See Tom’s blog post. Women in compliance: A key to organizational diversity. See art...

The Department of Justice Evaluation of Corporate Compliance Programs states, in Prong 10, Third Party Relationships:  Management of Relationships – How has the company considered and analyzed the third party’s incentive model against compliance risks? How has the company monitored the third parties in question? How has the company trained the relationship managers about what the compliance risks...

The Evaluation, in Prong 10, Third Part Management asks, “What was the business rationale for the use of the third party in question?” This question is one of the most basic tools to operationalize your compliance program and should form the basis of your third party risk management process.  It is common sense that you should have a business rationale to hire or use a third party. If that third p...

This episode is dedicated to the Justice Department’s Evaluation of Corporate Compliance Programs, which was released in February. In this episode, Jay Rosen and Jonathan Armstrong provide next insight. Listen to last week’s Episode 8 for commentary from Matt Kelly and Mike Volkov.    Jay Rosen, reporting from the ABA White Collar Conference in Miami, considers the view from the vendor perspective...

From the Department of Justice’s (DOJ) Evaluation of Corporate Compliance Programs:  Autonomy and Resources  Stature – How has the compliance function compared with other strategic functions in the company in terms of stature, compensation levels, rank/title, reporting line, resources, and access to key decision-makers? What has been the turnover rate for compliance and relevant control function p...

In this episode I visit with Susan Divers from LRN on the firm's 2016 Ethics and Compliance Program Effectiveness Report. Highlights include:Why did LRN do the report? What did it hope to determine? A summarization of its key findings. Why a focus on structural elements of a compliance program is no longer sufficient. Why a check the box analysis not adequate for judging program effectiveness. Fin...

Prong 6, Training and Communication, of the Justice Department’s Evaluation of Corporate Compliance Programs reads, in part:  Form/Content/Effectiveness of Training – Has the training been offered in the form and language appropriate for the intended audience? How has the company measured the effectiveness of the training?  Most companies have not considered this issue, the effectiveness of their...