Monthly Archives: May 2017

From Bottom Bunk to Top Mind

From Bottom Bunk to Top Mind

I recently had the honor of being named to Compliance Week’s list of Top Minds for 2017, earning the title of “The Great Communicator” from Bill Coffin, Donna Rice, and the CW team. If you had told me in 2012, when I was sentenced to a Federal Prison Camp as part of a Plea Agreement for violating the FCPA, that five years later I’d be telling my story to E&C professionals around the world, and helping them to better calibrate real-world risks into their compliance and business practices, well, I would have found that hard to believe. Nevertheless, here we are. The Top Minds interview with myself and Bill Coffin, editor-in-chief, Compliance Week, can be found  here.

In April, I visited Amsterdam,  for the first time in over a decade,  to talk about bribery in the country where I bribed, and over the course of this year, I’ll continue my travels to connect and collaborate with the ethics and compliance community. The opportunity to now communicate with business and compliance leaders from around the world makes me think back to the winter of 2016, when I met Sean Freidlin from SAI Global,  for lunch in New York, not far from where we both grew up. During our lunch, we shared perspectives and I spoke to him about my experiences with bribery, corruption, ethics, and compliance.

Over the course of two hours and a gluten free meal, we discussed how doing the wrong thing, and getting caught by US and UK law enforcement, changed my life. I shared my experience relating to the risks of working with third parties in foreign countries, the psychology behind some of my decisions, the shift from rules-based to values-based compliance programs, and how compliance officers can help their employees when confronted with difficult situations like the ones I had experienced.

Below, you’ll find an excerpt from our interview. If you’re interested in reading the full interview, you can download a free PDF copy of our conversation here.  

SF: Do you consider yourself a good person?

RB: I do now, but I didn’t in 2007. There was a time, particularly when I was in my family business, when I had a good family life, but years later, due to no one’s fault but my own, I chose a path which ultimately ended up causing tremendous ruin, for myself, and my loved one’s. The dynamic of ‘win above all else’ took priority above all else, including family and spirituality. Today, I am grateful to have those bonds back in my life, and to enjoy the fellowship, friendship, and camaraderie of compliance professionals from around the globe.

But wherever my career and journey might take me, I will never again disconnect from the networks of those who care about me and my well-being. And I, theirs. That’s something I talk about often.

Today, more than ever, technology makes it easier for people to stay close to their personal networks.

For commercial teams who might read this, if you’re jet-lagged, sleep deprived, and struggling with an ethical or business decision far away from home – call your family!

Listen to them, stay close to them, and remember, if you go tip the wrong way in ethical decision making, those are the voices that you will lose, and those are the lives which will be devastated as the result of your conduct. Skype, Facetime, or text, whatever it takes, but listen to those voices! Then get on the phone and call your manager and compliance leaders!

SF: Why do you think people don’t think they’ll get caught when they give or take bribes or act corrupt? How do you justify doing something wrong when you know it’s wrong?

RB: There’s something called optimism bias. You think that the probability of you getting caught is less than someone else getting caught. You think “it can’t happen to me.” The most dangerous part of optimism bias is that the longer you’re not caught, the more you think you’ll never get caught. So I was really thinking of myself as invincible. Always on the move. Nobody is ever going to catch up with me. I thought I was successful and safe, but what I wasn’t counting on or thinking about was one of my intermediaries getting caught.

To continue reading my interview with Sean Freidlin, download a PDF of our full conversation here. To learn more about the psychology behind bribery and corruption, read this whitepaper from SAI Global.

 

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Promoting Ethics on the Front Line

Promoting Ethics on the Front Line

The following post is by Guendalina Dondé, Senior Researcher, Institute of Business Ethics

Encouraging employees to ‘do the right thing’ and apply their organisation’s core values is of utmost importance. How can this be achieved in practice by organisations that employ thousands of employees around the world, who might have to make difficult decisions every day in their job?

The global nature of today’s business means that trying to embed a set of ethical values consistently throughout the company – and around the globe ­– can be a challenge.  Just as it is not enough to merely publish a code of ethics and hope that it will ‘stick’, simply translating a code of ethics is not enough to ensure that the ethical values of HQ are communicated effectively and meaningfully to staff in other geographies.

Embedding ethical principles for business conduct throughout an organisation so that they actually influence culture, decision making and behaviour can be a challenging and lengthy process requiring sensitivity, patience and resources.

An excellent way to meet this challenge is by using ethics ambassadors.

What are Ethics Ambassadors?

Ethics ambassadors are employees selected to assist senior management in promoting and embedding ethics policies, codes of conduct and other related policies. The post of ethics ambassador may be full-time or may be taken on in addition to an employee’s day-to-day job. Ethics ambassadors are not part of the ethics function but will normally be positioned throughout the company – across business units, geographical locations and/or the hierarchy of an organisation, and form an informal ‘network’ of diverse employees with similar responsibilities.

They can provide local knowledge, language and case studies to help make the ethics programme relevant to the needs of the local operating environment. This encourages buy-in from employees and decreases the likelihood of misconceptions which can arise from faulty translations or a clumsy choice of wording; historical context can be important to the perceived meaning of a word and taking this into consideration is best done by someone familiar with the local culture.

Ethics ambassadors can also act as a local point of contact, so if an employee has a query or an ethical dilemma they can talk to a local person rather than a telephone helpline or a more formal contact within head office. Ambassadors may also deliver training, record and report issues and occasionally help conduct investigations into unethical behaviour. However, as their name suggests, it is as advocates for the ethics programme that ambassadors are most valuable.  As Richard Bistrong noted in a recent blog, “It’s about integrating compliance into routine work and goals, as opposed to the corporate voice of ‘compliance from afar’.”

Establishing an ethics ambassadors network which is distributed across the organisation – geographically, departmentally and hierarchically – can help ensure ethical values are part of ‘the way business is done around here’.

Ethics ambassadors: an important element of the ethics programme

An effective ethics programme is paramount to support an ethical culture based on the company’s core values. Ethics ambassadors can help to broaden the scope of a company’s programme, reaching out further into the organisation and promoting core values at local level. A recent survey by the Institute of Business Ethics indicates that companies with ethics ambassador networks operate more comprehensive ethics programme than those without.

Main elements of the ethics programme in companies with and without ethics ambassadors

Companies WITH ethics ambassadors Companies WITHOUT ethics ambassadors
A global code of ethics (or equivalent document) 100% 100%
A speak up (whistleblowing) line 96% 94%
Internal reporting on ethics performance 96% 67%
External reporting on ethics performance 87% 72%
Employee training on ethics 96% 89%
An ethics monitoring programme 87% 72%
A board level ethics committee 83% 44%
A management level ethics committee 65% 44%
External stakeholder engagement 78% 61%

In both groups, the code of ethics has become an essential element of a company’s ethics programme and all respondents report that their organisation provides this sort of guidance to their staff. However, companies with a network of ethics ambassadors appear to adopt a more advanced approach to embedding an ethical culture.

In particular, companies with ethics ambassadors seem to place more importance on reporting on their ethical performance – especially internally. Ethics training is also more common in this group. These results support the idea that ethics ambassadors have an important role to play in raising awareness and enhancing employee knowledge, and the acceptance and implementation of the ethics programme. Similarly, it is important to note that for the ethics ambassadors to fulfil their role effectively, they need to be supported by a number of tools and mechanisms.

Setting the ‘tone from the top’

Consistent ‘tone from the top’ and senior leader engagement, especially in the boardroom, is crucial to ensuring that core values are embedded within business practice. This survey shows that boards of directors seem to be increasingly aware of their role in promoting and taking responsibility for the ethical culture in their organisation.

A similar focus on these topics at board level can be observed in both subgroups, although companies with a network of ethics ambassadors tend to discuss such matters in the boardroom more often.

Companies with a network of ethics ambassadors are also more likely to have a board level committee dealing with ethics and culture. Through these committees, the board takes responsibility for dealing with the broader questions of ethics and corporate responsibility, helping to address non-financial risks.

Senior leadership engagement

These figures can be read in parallel with other indicators of the commitment to an ethical culture by senior leaders. An important result that emerges from the survey is that in companies with ethics ambassadors the board and the executive team are required to undertake mandatory ethics training more frequently than in other companies.

In addition, more companies with ethics ambassadors report that they include ethical considerations in performance appraisals of the board (71% compared to 60% of companies without ethics ambassadors) and of the executive team (90% compared to 80% of companies without ethics ambassadors). This will help to improve the general perception of the company’s commitment to ethical standards and, ultimately, trust in leadership.

Although the general picture in our sample is positive overall, the slightly higher engagement at board level registered among companies with ethics ambassadors seems to have an impact on corporate culture. 96% of respondents from these companies report that their companies have a supportive environment for ethics, compared to 88% in the other group.

Similar results emerge with reference to the engagement at the top. Senior leaders are described as very engaged in 70% of cases in companies with ethics ambassadors, while only 60% of respondents from the other group are as engaged. Surprisingly, it doesn’t seem that there is a significant impact on the engagement of the general workforce which is seen as ‘very engaged’ in 40% of cases in both subgroups. This might signify that, whilst in some organisations there is a strong driver from the top to promote the ethics message, it might take time to produce a change in practice at all locations and levels.

Conclusion

Although ethics ambassadors can be found in very diverse organisations, the IBE survey highlights some features that such companies have in common. Ethics ambassadors tend to be more common:

  • among organisations with a large number of staff, as they bring local knowledge to the design and functioning of the programme as well as achieve greater consistency in its implementation;
  • in companies with a more mature ethics programme, where strengthening the ethical culture of the organisation is a priority;
  • where senior leaders seem to be more engaged with ethical standards and the board more involved in conversations on sustaining the organisation’s values and ethical culture; and
  • in companies that aim at engaging with all employees more closely and raise awareness on each of the main building blocks of the ethics programme.

Creating a culture of openness, where ethical dilemmas are disclosed and discussed will go some way to mitigate against integrity risk; ethics ambassadors may help mitigate that risk.

Further data can be found in the IBE’s latest Business Ethics Briefing.

The IBE Good Practice Guide Ethics Ambassadors provides a detailed description of what ethics ambassadors are and how they can be used effectively in promoting an ethical culture, giving guidance on creating and motivating a network of ethics ambassadors. It also includes a set of practical tools for training and evaluating the efficacy of ethics ambassadors.

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Can one really track the FCPA?

Can one really track the FCPA?

The following Q & A is with Harry Cassin, CEO, Recathlon LLC, the parent company of the FCPA Blog.

RB: Hi Harry, first, a little about you. How did you get to the FCPA world?

HC: My father is the founder and editor-in-chief of the FCPA Blog. We’ve worked together for 10 years. I’ve had an incredible opportunity to see the changes in the compliance community and the FCPA landscape during that time. It’s a really exciting place to be.

RB:  What is FCPA Tracker?

HC: FCPA Tracker scans for and analyzes public disclosures by companies about FCPA-related investigations. Where available, our analysts pull out over 20 unique fields for each investigation that our users can use to crosscheck against other investigations.

RB: Who owns FCPA Tracker?

HC: FCPA Tracker is owned by Recathlon LLC, it’s a publishing company that also owns the FCPA Blog, and other publications.

RB: Why did you start FCPA Tracker?

HC: FCPA Tracker was initially developed as an internal research tool built to the specifications of the FCPA Blog staff for very specific research purposes. As the product developed and grew, we offered it to a few key organizations who had expressed previous interest in accessing the data now contained in FCPA Tracker.

RB: When did you launch FCPA Tracker?

HC: These initial users were really impressed with the product and found a tremendous amount of value in it within their organizations. After hearing this positive feedback, we began to roll out FCPA Tracker to the public in early April.

RB: What do people use FCPA Tracker for?

HC: This is something that has surprised us. We developed FCPA Tracker with a specific use in mind, but our clients approach the same data set with different uses in mind. People have told us they use it for research, for internal company due diligence, for client monitoring, business development, and so on.

RB: Who uses FCPA Tracker?

HC: Due to the nature of the content, we don’t disclose any information about our current corporate or government users.

RB: Who is a typical user of FCPA Tracker?

HC: Our typical user is part of an enterprise team at a Fortune 500. We do have individual and government licenses, but the average user of FCPA Tracker is a team of people.

RB: Do you have trial periods?

HC: We’ve made public a single active company from the FCPA Tracker system. We also have public pages that detail what FCPA Tracker is, and the information that’s published. None of our users have needed training on how to use FCPA Tracker. It’s extremely intuitive and easy to use.

RB: Who are FCPA Tracker Competitors?

HC: We think this is a unique compilation of information that can’t be found anywhere else. There may be law firms that produce similar material for specific clients on a bespoke basis, but we’ve never come across one.

RB: What do users get when they subscribe to FCPA Tracker?

HC: In addition to access to all the investigations, companies, and information fields such as agent’s names, subsidiaries involved, countries mentioned, agencies, and so on, users receive email alerts for all new and updated investigations.

It’s surprising how many updates there are for the disclosures. We’ve added six new FCPA-related investigations disclosed in the past two weeks.  That’s a significant change in the FCPA landscape. In other words, the information is very dynamic and changes frequently. That’s why users are so happy with FCPA Tracker and why we’re so excited to bring this information to companies that want it.

RB: What is the source of the information in FCPA Tracker?

HC: We rely entirely on primary documents. All entries are based on disclosures in SEC filings or self-disclosures by non-issuers where available.

RB: Thank you, Harry. So, for anyone who wants to contact you to get more information on FCPA Tracker, how should they proceed?

HC: The best place to learn more about the product is https://fcpatracker.com. If specific question arise, I recommend contacting us directly through the website.

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