Monthly Archives: December 2015

Ethics Across the Generations

Ethics Across the Generations

In the latest edition of Business Compliance, guest author Guendalina Donde (Researcher at the Institute of Business Ethics)  writes about “Business Ethics Across Generations: Bridging the Gap.” (Available here for courtesy download) In her work, Ms. Donde breaks down “generations at work” in order to allow ethics and compliance practitioners to calibrate their approach to the characteristics of each generational group, “rather an adopting a one-size-fits-all program.

The groups, as defined by Ms. Donde, are as follows, along with a partial description:

  • Traditionalists (1922-1945): The ‘hard work in hard time’ generation, they “tend to be hardworking, financially conservative and cautious.” In addition, “they are not very risk-oriented and have great respect for authority.
  • Baby Boomers (1946-1964): The ‘live to work’ generation, “their long-term commitment is more to their job rather than to a specific organization and they seek personal growth, recognition, and gratification.
  • Generation X (1965-1982): The ‘work to live’ generation “they developed behaviors of independence, resilience and adaptability more strongly than previous generations, but also a little cynicism and distrust towards authority.”
  • Millennials (1983-2004): The ‘digital natives,’ “they were brought up with an ‘empowered’ parenting style, which encouraged them to express their opinions and to be self-confident.” In addition, “this group was also raised in a consumer economy and as such expects to influence the terms and conditions of their job.”

What does this all mean for today’s compliance challenges? According to Ms. Donde, “practitioners need to take these issues into account and develop tailored ways to encourage behaviors from each age group consistent with the organization’s core values.” As to how these groups and shared values can be promoted and leveraged, feel free to download the complete article (here), and read more about how organizations “will benefit from innovative ways of communicating the importance of doing business ethically.”

My appreciation to Laurenz Baltzer, Publisher, and Owner. Baltzer Science Publishers,  for sharing Ms. Donde’s work  with  the compliance community.

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Looking at Compliance From a Different Perspective

I recently had the pleasure of working with Leona Lewis on one of her Masters of Disasters Podcasts (here) and had the opportunity to ask her more about why she started the series. Leona responded,  “I started ‘Masters of Disaster’ to allow compliance, ethics and risk practitioners access to new ideas and perspectives by listening to the personal experiences of other practitioners in their fields. A lot like what we get out of in-person conferences, but weekly and free via the internet.”

Her latest podcast was with Nicole Rose, CEO, Create Training (here), and when I queried Leona about her interview with Nicole, she reflected,  “I thought Nicole Rose had a lot to share on her ideas about making training more effective and engaging through creativity. Her work shows that she has a clear point of view. But what really captured my imagination was the animation to the podcast. “

As Leona added, “It was fun to work with Nicole on the animation related to the podcast. It was great to see how animation brings the story to life.”

I had a chance to catch up with Nicole and to ask her why she created an animation to complement the podcast. Nicole stated “As you know, I absolutely love innovation, fresh ideas and finding new ways of presenting information. So when Leona suggested interviewing me through her podcast, the ‘Masters of Disaster,’  I was delighted. It was an opportunity to be able to explain my ideas, beliefs and inspirations and, on top of that, have a skilled interviewer facilitate this. Also, I am passionate about being able to disseminate compliance messages using social media. So a podcast fit in perfectly with this.”

Nicole added, “Obviously, I wanted to add some of our own personal touches to this interview, so a 3-minute short video seemed the perfect accompaniment to the podcast. This short video, which has the benefit of visuals, allows people to get the essence of the message across in a far shorter time than they would just by listening to the podcast. This fits in well with our ethos to train people quickly and effectively whilst engaging as many of their senses as possible.”

Nicole can be reached via [email protected]

Leona can be reached at [email protected]

Corruption’s Impact on the Rule of Law & Security:  Moving from the Vicious to the Virtuous

Corruption’s Impact on the Rule of Law & Security: Moving from the Vicious to the Virtuous

Today’s guest post is from James Cohen. James is a contributing as an independent expert on anti-corruption, international development, and security sector reform. He is based in Washington DC, and can be followed on Twitter at @JamesCohen82. His last post on Mapping Corruption (here), remains one of the most widely read posts’ on this blog.  Photo is by Lars Plougmann from London, United Kingdom – “Just say NO to corruption” found here.

No country is free from the risk of corruption, but from Ukraine to Afghanistan, from Nigeria to Iraq, the tide is turning on the acceptance of corruption as a benign issue that ‘greases the wheels of bureaucracy.’ Rather, corruption is now recognized as gravely contributing to global insecurity, manifesting in human rights violations, and even being considered a human rights violation itself. Corruption drives citizen grievance and mistrust towards the state by corroding rule of law institutions. Corruption compromises the security sector, rendering it unable to respond to threats or making it a threat itself. Finally, corruption enables rule of law spoilers – criminals, terrorists, and kleptocrats – to thrive.

Tunisia and Mali are two poignant examples of states that reached a breaking point due to the vicious cycle of their corrupt systems. The outcries of their citizens’ grievances became enmeshed with and fed regional insecurity. Governments and citizens are working towards avoiding these breaking points, striving to convert vicious cycles of corruption to a virtuous cycle of accountability and rule of law.


Citizens are generally well aware of the extent of corruption in their countries. They encounter it on a daily basis through many small and large interactions. They know to expect bureaucrats asking for a bribe to provide a government service. They see their government officials riding in fancy cars and living in grand houses though promises of aid and development are nowhere to be seen. While the public works within corrupt systems in order to make ends meet, their grievances and a sense of injustice builds.

In Tunisia, entry into the market economy was limited for much of the population under former President Zine El Abidine Ben Ali, with the ruling family exercising a heavy hand in controlling and directing much of the economy. The rigged system and the repressive authoritarianism that protected it led many frustrated Tunisians to overthrow the old regime through peaceful protest.

Although Mali and its former President, Amadou Toumani Touré, were hailed by the international community as democratic leaders in Africa, the explosive rebellion in the north and subsequent coup in 2012 demonstrated the level of grievances in marginalized populations and security personnel. Even a sizable portion of the population welcomed Touré’s exit. This was all built on years of resource mismanagement and impunity.

As official corruption at the top corrodes and captures governance institutions, corruption within law enforcement and the justice system undermines the rule of law in particular. Police become predatory, and courts become inaccessible for many citizens who cannot afford bribes to get access to justice. These two institutions are commonly perceived to be among the most corrupt around the world. As was the case in Tunisia and Mali, the state loses legitimacy as citizens see the face of the rule of law as self-serving.

Endemic corruption in both Tunisia and Mali was constructed by governments more interested in self-profit and preservation than an equitable rule of law. To their own peril, and the stability of the region, resentment over corruption was left to simmer until one young fruit vendor in Tunisia had enough of playing the game. His match set off the ramifications of corruption that are still playing out.


In addition to creating security threats by undermining governance and building grievances, corruption also compromises the security sector’s ability to address threats. The military, police, intelligence, and border guards all face corruption risks such as patronage, the sale of positions, and plundering salary and procurement funds.

Patronage and positions-for-sale enable a cycle of corruption where security leadership is primarily concerned with trading favors and paying debts for their positions. This leaves underpaid staff at the front lines without proper equipment and a leadership unprepared or unmotivated to address threats. This was the confluence of circumstances surrounding the Malian military’s collapse in 2012. Demoralized soldiers who had their equipment funds pilfered by top brass were up against well-armed and motivated rebels forcing the soldier’s retreat in frustration – mostly at their own leaders.

Mali is an example that demonstrates corruption’s ultimate end in undermining the security sector, but run of the mill corruption among police or border guards also undermines security by creating gaps in their ability to detect and stop threats. In response to attacks in Sousse and the Bardo Museum, the Tunisian government is building a series of new barricades along its border with Libya to try and stop terrorists. Despite the money going into the new system, there are various personnel risks. This could be a few border guards prone to corruption undermining the whole system, allowing terrorists to slip by with low-level smugglers.


Finally, as corruption enrages citizens and undermines state security, it allows the spoilers of the rule of law to thrive.

The Sahel and Maghreb hold pathways for smugglers moving drugs, people, and weapons from West and Central Africa to the Mediterranean. Sophisticated smuggling routes and the cover of the dessert’s open and sparsely populated terrain, still require corruption to effectively allow movement. It is in criminal and terrorist networks’ interest to corrode governance institutions and perpetuate a weak rule of law. Giving security officials and politicians a cut of the criminal profits keeps eyes turned away and even provides cover. The former Malian government played with this dangerous temptation to its own detriment, colluding with organized crime in the north of the country, who in turn worked with terrorist organizations during the 2012 insurgency.

Corruption also allows the theft of the state and impunity amongst officials that drives citizen grievances. The Ben Ali regime rigged Tunisia’s economy for his close network’s favor, stashing ill-gotten gains in overseas accounts through various opaque financial flows and shelters that Tunisians are struggling to work through today. So far almost 80 million dollars US, planes, and property have been recovered. But this is just the tip of the iceberg, as the Tunisian government now looks to ensure a smooth political transition by offering amnesty in exchange for stolen funds. This action has spurred new frustrations from citizens about a lack of justice.


Tunisia and Mali are just two of a number of country examples where corruption undermines the rule of law and threatens state and citizen security. While both Mali and Tunisia are taking a number of initiatives such as bolstering legislation and empowering oversight bodies, they, and many other countries, have much work to do to reign in corruption and its effect on state stability. The following are recommendations to improve governance to address corruption and its impact on fragility:

A. At an institutional level, effective and independent oversight is crucial to upholding the rule of law. This includes ensuring oversight bodies have the appropriate mandate, funding, staffing, and legal framework for carrying out their jobs. Budget transparency is a further crucial component of accountability with open data platforms as a positive trend. Security and defense budgets, however remain difficult to open. While there is a need for some secrecy, these budgets are often notoriously used for theft due to their lack of public oversight.

B. Civil society and citizens at large need be involved in oversight as well. Citizens resigned to believing not much can be done about corruption, or that only a fool will stick out their neck, find ways to work within a corrupt system until a possibly dangerous breaking point. Civil society needs to help articulate the kind of good governance and rule of law citizens want and create a ground swell to show citizens that accountable government is possible.

C. Additionally, government information needs to be accessible. While open data initiatives are progress, citizens need to be able to use that data to make change. Further, information for accountability comes from access to information laws and freedom of the press. These tools create a robust oversight system, but are often under threat due to their impact on corruption networks and authoritarian regimes.

D. At the global level, the impact of illicit financial flows on the rule of law and security are gaining traction. Governments need to continue to dismantle the tools illicit networks exploit, such as tax havens and shell companies, without harming beneficial  financial flows such as remittances.

E. Finally, tackling corruption, just like all reform processes, is political as well as technical. Challenging a deeply corrupt system will create powerful losers who commit human rights violations in order to keep that power. This should not cause avoidance due to sensitivities, but rather it implies smart and tactful approaches to addressing ‘grand corruption.’

The vicious cycle of corruption is already undergoing a global change in perception. People in other countries saw Tunisians demand something better from their government and the results of waiting to break that cycle until a dangerous point are playing themselves out. Moving to a virtuous cycle of good governance and rule of law helps avoid a worsening downward cycle of violence.

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International Anti-Corruption Day: everybody has a role to play in tackling corruption

International Anti-Corruption Day: everybody has a role to play in tackling corruption

Today’s guest post for International Anti-Corruption Day is by Adrian Phoon, Head of Content for GRC Solutions. GRC Solutions is an online compliance training market in the Asia Pacific region. With their Compliance Learning Management System, Salt Web, and other innovative solutions, they help hundreds of companies navigate complex legal and regulatory environments and build resilient organisational cultures.

It blights lives, and blunts social and economic growth. And the efforts to stamp it out are enforced by some of the severest laws in the world.

Corruption is the broad term we use to describe dishonest conduct or the abuse of power by a person for personal gain. Arguably the best-known form of corruption is bribery.

Every year, the costs of corruption are said to amount to USD$2.6 trillion globally, with an estimated $1 trillion paid in bribes. One estimate indicates that private sector corruption alone accounts for US$515 billion annually.

December 9 is International Anti-Corruption Day, a United Nations initiative designed to raise awareness about the risks and consequences of corruption. Sponsored by the UN Office on Drugs and Crime (UNODC) and the UN Development Program, it attracts widespread engagement and support internationally.

To mark last year’s campaign, UN Secretary-General Ban-Ki Moon said, “To dismantle corruption’s high walls, I urge every nation to ratify and implement the UN Convention against Corruption.”

“Its ground breaking measures in the areas of prevention, criminalisation, international cooperation and asset recovery have made important inroads, but there is much more to do.”

Everyone has a role to play in stamping out corruption, a point made in a statement released by the UNODC.

It states that “people can – and should – inform themselves about what their Governments are doing to tackle corruption and hold elected officials responsible for their actions.”

“Actions are also key – reporting incidences of corruption to the authorities, teaching children that corruption is unacceptable and refusing to pay or accept bribes,” it continues.

The costs of engaging in corrupt conduct are huge. One person who knows this more than most is Richard Bistrong. A former sales executive, Richard was sentenced to 18 months in prison for bribery. His crime involved attempting to win contracts from the United Nations and several foreign countries by bribing officials.

Prior to his prison term, Richard spent five years as a US/UK government cooperator and witness, agreeing to go undercover as part of his cooperation agreements with the FBI and City of London Police.

Today, he’s an anti-bribery and corruption consultant, speaking regularly about his experience and the toll it took on his life and the lives of his loved ones.

“During the many years when I was working in the field of international sales, I was aware that I was engaging in illegal behaviour,” he says.

“However, at that time in my life, I wasn’t thinking about getting caught and did not think I would get caught.”

Anti-corruption measures are enforced by strict legislation worldwide, including the Prevention of Corruption Act in Singapore and section 70 of the Commonwealth Criminal Code in Australia.

The US Foreign Corrupt Practices Act has continued to attract high-profile international cases. To cite just two, in 2015 there has been a USD$19 million settlement by pharmaceutical company Bristol-Meyers Squibb and a $14 million case involving Japanese conglomerate Hitachi.

The UK Bribery Act has also drawn scrutiny for its recognition of a broad range of offences. This includes the offence of failing to prevent bribery by a third party, which sits alongside the traditional offences of bribing (including the bribery of foreign public officials) and receiving bribes.

Recently, a Scottish cabling systems supplier Brand-Rex Limited the first company to fall foul of this offence since the Act took effect in 2011.

Every year, independent body Transparency International publishes a Corruption Perceptions Index which ranks countries in relation to perceptions of corrupt practices from the least to the most corrupt.

While the top of the list tends to remain consistent, the 2014 list contained some surprises. Singapore fell from the top five for the first time to seventh place. Australia slipped out of the top 10 altogether.

As one report by the Organisation for Economic Co-operation and Development (OECD) explains, corruption increases the cost of doing business, leads to waste and the inefficient use of public resources, perpetuates poverty and undermines the rule of law.

Drawing attention to corruption through education and training – equipping people with the practical means to identify what it is exactly, avoid corrupt conduct and report it through the proper channels – is crucial to tackling it.

Contact GRC Solutions here to find out more.

International Business Attitudes to Corruption: Past & Present

International Business Attitudes to Corruption: Past & Present

The following interview is with John Bray, Director (Analysis), Control Risks.

RB: John, thank you for joining me for this interview. As the main author of the Control Risks “International Business Attitudes to Corruption Survey 2015/2016” (download here), could you share some of your background and experience?

JB: I’m currently based in Singapore, but I work internationally and across commercial sectors: this year my most satisfying assignments have been in Iraq, Myanmar and India. Most of my work is with international companies, but I’ve also worked on projects with NGOs and multilateral agencies such as the World Bank, and value those different perspectives.

At an earlier stage in my career, I led what is now Control Risks’ Global Risk Analysis (GRA) team in London. My background in political risk continues to inform my view of the anti-corruption agenda. Commercial bribery isn’t simply a legal or a compliance issue: we need to take a broader political and social view in order to understand and tackle it.

RB: Well,  first, I wanted to share that the Survey, and I read many, the first one where I have seen a significant attempt to deep dive into what this all looks like from the front-lines of international business. Congratulations, as I think this perspective is one which is desperately needed in the compliance discourse. So, my first question, is what do you see as the significant changes in your 2015/2016 Survey from earlier editions?

JB: Our first substantive International Business Attitudes to Corruption surveys were in 2002 and 2006. At first sight, the scale of the problem has scarcely diminished. In our most recent survey, 30% of respondents said that they had failed to win contracts where there was strong circumstantial evidence that the successful competitor had paid bribes. In 2002, the response to a similar question was that 27% of companies had lost business to corrupt competitors in the previous year, and 39% had suffered a similar fate within the previous five years.

However, there are some positive changes. Companies from countries with a strong enforcement record appear to be more – not less – willing to invest in high risk environments. For example, in our 2006 survey 38% of US companies said that they had been deterred from an otherwise attractive investment opportunity because of the risk of corruption. This year the figure was only 29%.

We think that this is because US companies have learned how to factor the US Foreign Corrupt Practices Act (FCPA) into their business calculations, and to turn it to their advantage. For example, integrity due diligence shouldn’t be seen as just a tick-box compliance requirement: you can make better decisions if you understand who your business partners really are.

RB: Richard Fenning, CEO, Control Risks, in the introduction, states “there is a dangerous gap between the perceived effectiveness of a (compliance) program and the reality on the ground.” Danger is a strong word, so what do you see as those greatest dangers?

JB: The biggest dangers are complacency and disconnect between head offices and frontline managers. This relates to the need to take a broad view of corruption rather than understanding it simply as a compliance problem that can be fixed through a few simple rules and powerpoint presentations.

RB: I am often asked if ‘Western’ anti-bribery laws put US and EU-based multinationals at a competitive disadvantage. It seems from your findings that extra-territorial anti-corruption laws have now moved from an “unfair handicap” to “making it easier for good companies to operate in high-risk markets.” The report finds that 81% “agree with the general proposition that international anti-corruption laws improve the business environment for everyone.” That seems to be a seismic as opposed to a subtle change. How do you think companies are making that a reality?

JB: One of the most striking findings of the survey was that this positive view of extra-territorial anti-corruption laws was shared by respondents working for local companies in high-risk countries. For example, as many as 97% of respondents in Nigeria agreed that the laws “improved the business environment for everyone” as did 87% in Mexico and 89% in Brazil and 80% in India. The implication is that the international laws made up for some of the deficiencies in their own environments.

However, the institutional anti-corruption agenda is still “work in progress” and a range of different actors need to play their part in reinforcing it. The most important contribution of individual companies stems from way that they themselves conduct business, setting the right example in their commercial operations.

This doesn’t mean that companies should carry the entire burden. We need governments to fulfil their own role in achieving a “level playing field” for good companies. If this isn’t happening, companies should say so – most likely through business associations and chambers of commerce.

RB: The Report states that “reliance on a legalistic approach to compliance can be dangerous” adding that “a legalistic approach to business integrity is not sufficient- and could even be counterproductive.“ Given the proliferation of legal contributions to the anti-bribery compliance discourse, this might seem counter-intuitive, so can you drill down as to the why?

JB: Good laws and good lawyers are essential, but the anti-corruption agenda doesn’t stop with them. The most important question is how to put good legal principles into practice. Finding solutions requires the participation and specialist skills of people from a range of different disciplines.

For example, in the construction and engineering sectors many of the greatest corruption risks lie at the project execution stage and not simply when companies are bidding for contracts. The potential for delays in execution is a major commercial risk, and companies are more vulnerable to demands for bribes from dishonest officials when they are racing for a deadline. However, if they are known to pay bribes, the quality, and safety of their projects will come into question. Lawyers can’t fix these kinds of problems on their own: you need engineers working within a common company culture that refuses to compromise either on legal matters or technical quality. The two go together.

RB: In the Report you highlight an incident in India where a facilitation payment was demanded. However, when the third-party supplier “stopped paying the bribes,” while there was short-term disruption, ultimately, the public official performed the service according to his responsibility. Do you think that Western organizations are too often “scared” to stand up to such small bribes, and embrace your “tough approach,” figuring they would rather “roll the dice” and make the payment?

JB: We favor a considered approach, not just a tough one. Sometimes demands for small bribes are truly part of the informal ‘system’. If that is the case, you need to understand how the system works – and who benefits – before tackling it. At a minimum, this typically includes being prepared to accept short-term delays, as in our case study, until the message gets across: “This company really isn’t going to pay, so there is no point in asking.”

All this requires hard work on the companies’ part. In our experience, more and more companies are prepared to make the effort. However, there are several factors that may make them slow to do so.

The first is the ‘disconnect’ that we discussed earlier. Senior management may not know – or may not wish to know – about the small payments. There may also be a perception that small bribes ‘don’t matter’, and we still hear that one just has to accept them because they are ‘part of the culture’. We don’t agree. If large Western companies pay small bribes they reinforce malpractice rather than acting as a positive agent for change.

 RB: In your “Strategic Approach to Anti-Corruption: Five Recommendations” the first is to “Integrate Corruption Risk Into Strategic Planning.” When I speak to this issue, my own reflection is that if risk isn’t baked into strategic planning, then compliance is left with the unsavory task of “catching falling knives.” What’s your view? 

JB: I like the expression, and of course I completely agree. To take a more positive view, though, companies do learn from painful experience. It’s easier to make the case for a strategic view to a company that has already had to go through the pain of cleaning up a major compliance lapse. Of course, it’s best to learn from other people’s experience rather than suffering it yourself.


RB: The second recommendation is “seek out low-risk opportunities in high-risk markets.” John, that’s brilliant, as we all too often hear of “all or none” when it comes to country risk. I was wondering if you think a ripple benefit might be longer-term engagement? In other words, if an organization establishes an ethical foothold in a country, even if relatively small, does that become a potential ‘ethical beacon’ as demonstrating to the various ministries (as well as to employees and consultants) that the organization is committed to ethics, sustainable business, and that “it can be done.”

JB: Yes, the ‘ethical foothold’ approach has several benefits. It demonstrates commitment to the country concerned; it makes it easier to build up the right contacts; and, if all goes well, it can lead to a gradual expansion that is all the more secure because it is based on a considered approach to risk, and not a snap business decision.

All this is easier to say than to put into practice. Over the years, Myanmar is one of the countries that I’ve followed particularly closely, and I’ve been working there again this year. I’m fully convinced of the positive role that responsible business has to play in building up the country, but it takes time to generate the supporting government institutions that companies need. There are no short-cuts.

Finally, let’s talk incentives. You state, “senior managers may need to accept a short-term reduction in sales targets following a tightening of anti-corruption policies.” A colleague of mine once shared that he said to his manager, that due to the reasons that you just addressed, that he wanted to talk about a revenue adjustment as calibrated to the regional risk model. The manager responded, “we are a public company, we don’t do sales reductions.” John, from my perspective, that’s where this whole enterprise “hits the crossroads” as Scott Killingsworth shares. Do you REALLY think that organizations are willing to make those adjustments in the face of corruption reality, and recalibrate their forecasts and revenues to bake in that risk?

JB: Yes, I do. Obviously, not all organizations are prepared to recalibrate as you suggest, but many are. This is the kind of test that decides whether a company is first- or second-rate, and whether it is far-sighted enough to be successful over the long term.

It may be easier to make my case by thinking of other words such as ‘quality’. I’ve recently been working for a company that shut down production in a key factory for ten days while it fixed a problem with quality. It probably didn’t ‘need’ to do this – there had been no external complaints – and of course, it has taken a hit in short-term sales. I’m impressed. I see the same commitment to quality as extending to other areas, including compliance. If you take a long-term view, you shouldn’t compromise on any of them. I am confident that this approach pays off, commercially as well as ethically.

RB: Well, thank you for your time. Is there anything you would like to add, and how can people get in touch with you?

JB: I’d like to end on a hopeful note. International business corruption is a highly complex political, social and legal problem. This is what makes it so fascinating to work in this area. However, it can be tackled. Sometimes there will be major advances, perhaps from a new piece of legislation or a government reform. However, in our own experience, positive changes are more likely to be incremental, the result of hard work by specific individuals and companies tackling particular problems with ingenuity and integrity. I am convinced that both the smaller and the larger battles can be won.

I can be contacted on my company e-mail: [email protected]

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Is it possible to combine Art, Law and Compliance?

The following guest post and video is by Nicole Rose, CEO and Founder, Create Training.

Given that Richard has so openly and honestly told his story in our animation, Richard Bistrong: Why we say yes, I thought it only fair to briefly tell mine.

At the age of 18 I decided to study Law rather than Art. At 21 I qualified to become a Lawyer and started my first role. Then at 30 I recall discussing with a colleague how wonderful it would be to ‘give it all up’ and study art. At 35 I moved from London to Melbourne to do so. Then, two years ago I founded Create Training. Today, at the cusp of turning 41, I am fulfilling my life long dream and using my artistic and legal skills to tell stories that people can relate to. Here’s my story told in my own inimitable way. I hope it inspires others to realize that anyone can change their trajectory.