Monthly Archives: March 2016

Why Anti-Corruption Programs Fail

In this Frontline Interview, Leslie Benton, Vice President of Advocacy and Stakeholder Engagement of the Center for Responsible Enterprise And Trade (CREATE.org), addresses the recent Create.org White Paper, Why Anti-Corruption Programs Fail, Turning Policies into Practices.

In this Q & A, Ms. Benton speaks to the following issues, and where they are not present, a compliance program is at risk:

  • Tone in the Middle: Where “the rubber meets the road” in a compliance program, and a significant reason, where it is not robust, as to why compliance programs fail, and fail to get implemented. Why? Because when people have questions or concerns about business decisions, they go to their supervisor’s not “higher up the chain.” Thus,  middle managers need to be  “empowered to provide the compliance message and to ensure that employees understand what they should do in the context of the risk they face.” Where middle-level managers are not embedded into a compliance program, “one bad message can cancel out all other messaging,” as line managers, more than higher level executives, deliver the message of  “what needs to get done” on the front-lines.
  • The Profile of the Compliance Function. Compliance needs to be an integral part of the business and needs to  have a seat at the business strategy table, as a part of being taken seriously. When compliance is part of the business discussion, it also demonstrates  support and visibility to the entire organization. Employees will then  see how compliance is a part of business development and has a strong voice in risk assessment. In other words,  “it’s a benefit and a part of doing business successfully.”
  • Addressing Competing Priorities and Incentives. Employees make difficult decisions in complex environments and at some level, “they were hired to grow the business.” In the field, they can face tremendous pressure to skirt the rules in order to get the job done. Thus, forward based personnel need to understand that “compliance is part of doing the deal.”  Incentives can put them into an untenable position, so compliance has an important role to help employees  understand  “that they will always benefit from doing the right thing.” How? By “compensating you to behave as we expect you to behave.”
  • Communication and Training. It is “vital that employees are receiving the compliance message from every level of the company.” As shared at a recent compliance symposium “ten minutes with the CEO is worth forty hours of training.” Training is critical to “creating a culture of integrity, and “atmosphere of openness and transparency.” Compliance leaders need to “show vulnerability and be open as human beings.”

In the concluding part of the interview, Ms. Benton addresses practical steps for implementing a compliance program, which include, “commit, communicate and embed.” In this segment, Ms, Benton speaks to the importance of:

  • Leadership commitment to embedding ethics and compliance across the company. Compliance needs to become “a part of the company DNA that’s supported by policies and procedures.”
  • Employees embracing training as a way to help them do their job, and that it is embedded into the business process.
  • Thinking about the corruption risk that you face and that “it’s not one size fits all” in terms of risk and compliance solutions.
  • Having compliance right size a program and to make certain that it is “calibrated to the risk that you face.” In other words, “Look at your highest risk and make certain that  the program fits and addresses those risks.”

In sum, as Ms. Benton concludes, “People like to work with companies with integrity and it leads to greater success.” Why not take advantage of best practices, lessons learned, and think about how your program can be indexed to these issues via this Create.org White Paper, which can be downloaded from the Create.org website at www.create.org

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Australia Raises its Anti-bribery Compliance & Enforcement Game

Australia Raises its Anti-bribery Compliance & Enforcement Game

The following post is by Ted Williams, Partner at Piper Alderman, link here, twilliams@piperalderman.com.au 

After broad international and domestic criticism of its efforts, the Australian Government is now showing an appetite for significant reform in the area of foreign bribery.

OECD criticisms

In 2012 the OECD Working Group on Bribery reported it’s serious concerns with Australia’s record of enforcement of foreign bribery laws, warning that the government should take significant action to “ensure that corporations cannot avoid criminal liability in practice”.

The Working Group’s April 2015 follow-up report noted progress, yet repeated earlier calls for reform in areas including corporate liability and false accounting.

Senate Inquiry: Business calls for consistency with international standards

In June 2015,  the Australian Senate commenced an inquiry into the adequacy of Australia’s ABC laws. That inquiry took submissions from over 40 interested parties.

One of Australia’s largest companies, BHP Billiton made a submission, reflecting on its investigation by the SEC in relation to the 2008 Olympics (which resulted in an SEC “declination”), noting that:

“the controls we had in place at the time were insufficient to satisfy the civil books and records and internal accounting controls requirements of theForeign Corrupt Practices Act 1977.”

BHP called for reform of Australian law to “increase international consistency in line with the OECD Convention on Combatting [Foreign] Bribery” and identified several reform measures including: harmonizing books/records and false accounting laws with international benchmarks; enhanced whistleblower protection (but without incentives); the introduction of Deferred Prosecution Agreements; and, publication of Australian Guidance in the manner of the US DoJ/SEC and UK’s SFO.

BHP’s submission echoes criticism that compliance to the standards of Australian law is inadequate to address the risk of exposure to the FCPA and the UK Bribery Act.

Recent Government Action

While Senate Committee is due to report in July 2016, the Australian government has not wasted time in responding to the latest OECD report:

  • In November 2015 new laws came into force which clarified that it was not necessary to prove intention to influence a particular foreign official in order to establish a foreign bribery offence.
  • On 29 February 2016, further laws as to false accounting came into effect. While not going so far as the ‘books and records’ provisions of the FCPA, (proof of “deliberate” or “reckless” falsification is still required under Australian) they represent a clear step in that direction.
  • On 16 March 2016, at the OECD Anti-Bribery Ministerial Meeting in Paris, Australian Justice Minister announced a discussion paper canvassing the introduction of Deferred Prosecution Agreements (DPAs) for Australian corporate law offences (including securities fraud, market manipulation, and foreign bribery).

DPAs: a proven game-changer

The introduction of DPAs would be a landmark step in the development of Australian corporate and foreign bribery laws. Plea bargaining presently has no formal role in Australian law. This reflected the traditional position in the UK, which changed with the 2014 reforms there following the Bribery Act 2010.

As has been seen in other jurisdictions, DPAs would significantly alter the balance in foreign bribery prosecutions in Australia, where thresholds for conviction are very high. There has been only one successful conviction under Australia’s foreign bribery laws, which were enacted in 2009.

Investigations step-up

In step with recent law reform, Australian prosecuting authorities are also demonstrating renewed vigor. On 14 March 2016, the Australian Federal Police confirmed an investigation into reports of payments in 2010 by Tabcorp Limited (a top 100 Australian company) of $200,000 to a consultancy associated with the family of the Cambodian Prime Minister. The case has drawn widespread media interest. The CEO of Tabcorp at the time of the alleged payment, Mr Elmer Funke Kupper had since become the chief executive of another company, ASX Limited, responsible for the operation and governance of the Australian Stock Exchange. On 21 February 2016, Mr Funke Kupper was reported to have resigned from his position as CEO with ASX Ltd in order to focus on criminal investigations being undertaken in Australia and the United States.

Stakes have been raised

Although the effectiveness of these reforms is yet to be seen, there is no doubt that deliberate steps are afoot to bring Australian ABC laws closer to international benchmarks.

If ever there was a time for Australian companies to bring their anti-bribery compliance up to best-practice standards, that time would be now.

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Why all this hostility to compliance training?

The following article is written by Julian Fenwick, Managing Director, GRC Solutions, www.grcsolutions.com.au

The old methods of compliance don’t work anymore. That’s the general argument made in a white paper entitled The Future of Compliance Training written for the adaptive e-learning company Better.

We all understand the frustrations commonly associated with compliance training – the very frustrations that typically make audiences hostile towards this kind of enforced training. After all, compliance is a “bolt on”, a fixture that people have to apply on top of their day jobs.

Nobody really wants to do compliance training; it’s a mandatory feature of their work that takes time out of people’s work day to complete.

For large organisations, the opportunity costs associated with requiring employees to sit through compliance training can run into the millions. The resentment that employees may feel towards this mandatory training increases when the training is something they feel competent in – in particular if they have already undertaken the training in previous years.

But as noted in this video interview,  an adaptive learning ecosystem can bring the “employee and compliance department to a better place.” How?

By “personalizing the learning experience”, as I explain in the interview. Adaptive training identifies the learner’s knowledge gaps, upfront, through a rigorous pre-test and hence, only provides training on those gaps. Topic areas in which the learner  demonstrates competence are removed from that individual’s training requirements.

This approach helps to improve a learner’s speed to competence – the time within which an individual acquires proficiency in a topic area – by only giving them valuable information. It can trim training times by removing content that is redundant, repetitive, or a regurgitation of pre-acquired knowledge.

In the interview, I reference one of Better’s clients which requires 110,000 people worldwide to undertake anti-money laundering training in eight languages. That’s a mammoth effort by any reckoning, but it’s one that Better’s unique system handles easily.

These features are among the many reasons why GRC Solutions recently acquired Better. Better’s multi-language capability and the ease with which it enables clients to tailor content to their own workforce’s job roles and levels of learning makes, the system truly adaptive.

The learning methodology that underwrites Better’s platform pivots on “treating individuals with respect.”  As I observe, the focus on speed to competence means that employers can potentially cut out the basics from their workforce’s training, being content where competency has been demonstrated through ‘testing out.’ Accordingly, that allows concentration upon “more sophisticated information.”  The result-  less time and frustration, with more engagement and retention.

A strong case can be made that adaptive learning improves individual competence and memory retention. Not only that. It’s good for companies who insist that new starters learn the company’s particular way of doing things, even when such new hires have some acquired competence in the topics from elsewhere (like their former employer). And it’s good for employees who wish to deploy their time and efforts to learning new things rather than spend more time going over the same content, year in, year out.

From this perspective, adaptive learning doesn’t just neutralize traditional hostility towards compliance training; it provides a platform to positively engage employees.

To find out more about Adaptive Compliance Training, and GRC’s recent acquisition of Better Inc,  feel free to contact  Julian at Julian.Fenwick@grcsolutions.com.au

How Adaptive Compliance Training Reduces Fatigue

In this video interview (part III of IV), GRC Solutions  Managing Director, Julian Fenwick, shares the value of Adaptive Compliance Training in today’s e-learning environment. In this short compelling video, Julian addresses how Adaptive Compliance Training:

  • Delivers content in a more effective manner, saving organizations a substantial amount of time/hours in their compliance training programs while at the same time increasing effectiveness and retention.
  • Calibrates training to address “what is remembered and what is forgotten” to deliver relevant content to the individual learner.
  • Can be used for any form of training, across subject matters, jurisdictions, and languages.
  • Can be edited by the organization to ensure that it is properly calibrated to the specific needs of a workforce.
  • Converts stale training into interactive and relevant content, thereby increasing engagement and retention.
  • Uses existing technology and learning platforms, thus allowing ease of implementation, while at the same time offering technology platforms to bring the ‘training to the user’ as to how they learn, and where they learn,  via smartphones, tablets, etc.

To learn more about Adaptive Compliance Training, feel free to contact Julian Fenwick at Julian.Fenwick@grcsolutions.com.au

Challenges and Trends in Anti-Bribery Risk Management

In the second part of our interview, GRC Solutions (www.grcsolutions.com.au) Managing Director, Julian Fenwick, shares his experience and practice with respect to anti-bribery risk management.  In this interview, Julian addresses:

  • The temptations to ‘cut corners’ where forward positioned sales staff come under sales and performance pressure.
  • The importance of viewing anti-bribery compliance as part of being a responsible global citizen.
  • How short-term rewards increase short-term risk.
  • The importance of ethics, as to guide people where there are no written policies, rules and/or procedures.
  • How tone ‘from the middle’ often speaks louder than ‘tone at the top.’
  • Why organizations often take on ‘bad business’ to make their numbers.

Julian also shares his experience with the GRC Solutions SALT  Compliance Learning Management System, as to better enable multinationals to:

  • Align ethics and compliance and to keep them aligned.
  • Understand the importance of giving compliance a seat at the remuneration and strategy table.
  • Galvanize commercial teams to think of compliance as their partner instead of a roadblock.
  • Articulate ethical values as more than “something which hangs on a wall.”

As Julian shares, compliance needs to be tailored to the local cultural narrative, where business teams operate. It is not a one size fits all challenge or solution. It requires an understanding of how values can impact training, across regions, and the importance of jurisdictional and non-jurisdictional messages and training. Julian can be reached at Julian.Fenwick@grcsolutions.com.au