Apr 13, 2015

Compliance Benchmarks & Standards: A Round Table Discussion

I recently had the opportunity to read a very interesting and engaging Round-Table Discussion in the 2-2015 Issue of the Journal of Business Compliance (Baltzer Science Publishers. Editor-in-Chief: Anthony Smith-Meyer) titled Benchmarks and Standards. As a regular contributor to the Journal, I asked the Publisher, Laurenz Baltzer, if he would allow me to make the article available to my readers and non-subscribers, and he was kind enough to grant permission, which can be done via a link here with my gratitude.

The Round-Table participants represent a well-experienced panel from a number of fields, including some familiar names from previous blog post such as Scott Killingsworth (Partner, Bryan Cave (profile here) and a member of the Journal of Business Compliance Editorial Board), as well as Alexandra Almy (Certification Manager, Ethic Intelligence), who I had the pleasure of seeing via video at the OECD Integrity Week. But please read the work for the reflections and profiles of the entire panel

As Anthony Smith-Meyer asks in his introduction, “How far can we go in meaningful guidance as to how businesses should govern themselves, take decisions and manage their risks?”

What caught my attention is how benchmarks and standards influence those at the front lines of international business who confront corruption risk in their work, as well as the compliance professionals who are tasked with supporting them to manage that risk. If benchmarks and standards that are designed to govern and chart compliance are all bringing some value, or, as Mark Compton (Partner, Mayer Brown and BC Editorial Board Member), states “Good advice is never counterproductive,” is there a point of diminishing returns? As Anthony Smith-Meyer asks “At what point does good advice become counterproductive? Or is it a case of the more the merrier?” Perhaps that dilemma is well addressed when Pinsent Masons Partner (and my interlocutor at a 2014 UK compliance symposium) Barry Vitou proclaims in a blog post of his own (link here): “If your anti-bribery policy is more than three pages, it probably won’t work.”

I think a good reflection on the debate comes from Alexandra Almy, who states, “the compliance and ethics community is indeed facing a plethora of guidance, recommendations and best practices on the issue, which can be quite understandably overwhelming.” Indeed, and if it is overwhelming to those in the C-Suite and home offices who are compliance professionals and who write these policies, how about for those at the field level, who do not have such professional backgrounds, but who are clearly tasked to grow the business? As Scott Killingsworth well states “Compliance is about influencing the behavior of individual, free willed human beings on a large scale in the face of temptation and pressure, which is a little different from, say sterilizing a knee implant.” Furthermore, Scott points to what I call the “least common denominator (LCD)” syndrome, which I have experienced in other industry standards, where a “certification-based regime may, in effect, encourage companies to do exactly the minimum necessary to achieve certification, and no more.”

So, where is the sweet spot between fatigue and the LCD? I will be uncharacteristically brief, and invite those interested to “jump ship” to the Journal of Business Compliance article and to read more! (link here).

3 Comments


  1. I enjoy reading your posts, Richard. Please indulge my perspective on this. I do not believe that hierarchal corporate regimes can self-govern without external audit and guidance simply from the perspective of human nature. Top executives agree and most often form non-evidence based decisions over 85% of the time according to HBR research. So, organizations do not really need to justify decisions in a meaningful way to stakeholders. They are trusted with little oversight and even accountability. There needs to be external constraints. When the odds of getting caught in noncompliance or corruption is pretty good and appropriate sanction is given, then decisions will obviously be influenced. In the end of the day, self-interest over the enterprise interest drives non-compliance. So, constraints must affect self-interest. Another thing is that compliance must also be the “easiest” avenue with respect to processes and audits.

  2. I am under the impression that compliance industry has generated so much both good and just white noise at this point, so it appears to have become somewhat counterproductive. People started paying less attention to the issue because it has become too much. There is a mutually shared feeling that a lot has been done and no one needs to do anything any longer. I fully agree with Barry Vitou that a three pager cuts it, and the time has come to distill major points from mountains of data and findings. The only problem is how to sift through all that stuff to retain most valuable insights and messages. The compliance universe has to begin contracting now because its further expansion serves no purpose other than stroking a few egos here and there.

  3. Richard: I happen to agree strongly with Mark Compton of Mayer Brown…good advice is never counterproductive. We, at Infortal Worldwide, work very hard to provide within our investigative due diligence cases “Actionable RecommendationsTM” and feel strongly enough about the uniqueness to actually trademark this approach. In fact, we work hard with our clients to communicate the following approach
    a) understand the results they’re seeing and
    b) what actions, if any, they should consider next and
    c) how significant the findings are in the context of ABAC

    So in essence “good advice” provides clarity and the confidence to act!

    Thanks for posting!

    Mike

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