[Editor’s note: What follows is a reply to a recent letter from a reader in China.]
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Dear Compliance Officer,
You asked for advice about what is the job of a compliance officer?
You wrote to the FCPA Blog after reading that the CO in China of a giant Western company who warned his bosses about corruption in the sales of medical equipment may have been fired, “retaliated against.” You are upset and confused. That is very understandable. It is a “normal” part of the compliance job to be shocked by corruption when it is very bad and very close to you. The important thing is that you are not “shocked into silence,” but instead speak up as you have done.
Your letter is clear even though you write from China and English is not your Mother Tongue. I apologize that I write back to you in English and not in your Mother Tongue. But today we are speaking the “same language” when it comes to discussing the hard job of being a compliance officer. This is new. I am happy that after more than three decades of working in law and compliance, COs around the world are talking to each other about the problems they have in common. So to begin with, part of the job is taking part in discussing the compliance profession and helping each other build it up.
In the old days of compliance there were no blogs, no way to get in touch, and no way to expose bribery by writing about it publicly. “Impunity” is an important word — people who pay bribes or take bribes expect to be above the law and above public disapproval, to act without fear of public shaming. By writing a letter to a publication like the FCPA Blog asking for advice, you help to end or limit impunity. So thank you for your letter.
You have asked an important question that I hope many compliance professionals reading this post will also write about. All of us in or concerned with the compliance profession need to discuss and debate where the compliance profession is going and why.
When I had my first job long ago, there were only lawyers and no compliance officers, no compliance departments and no professional codes. In fact, the FCPA was generally not enforced. Now there are more and more compliance officers, but it is still not clear what are the standards for doing a truly professional job. Like doctors or lawyers, or like many trades or crafts, a good compliance officer needs to be part of a “profession” with its own high, professional standards. We need to debate and create professional codes and standards.
Let’s take the difficult situation mentioned in your letter. Based on actual investigations or media reports, we know that some high-ranking executives of well-known global companies might decide to expand sales and profits by using alleged bribes to build more stores, to win contracts to service fleets of aircraft, or to sell more products to doctors.
When compliance officers discover a campaign of corruption, what is the “professional” action to take? Better yet, ask the question another way: What is the unprofessional thing to do? Is it unprofessional to ignore corruption by managers who outrank you and could fire you for just doing your job? When compliance officers are in this situation, they think about what losing their job will mean to their children, their careers and even to their safety. The point is to think about this situation with other compliance professionals before it actually happens. There should be a common understanding about what is the professional thing to do, how to do it and why.
I will now answer your question as I see it and hope that others will debate my answer and share their advice too. The job of a professional compliance officer is to TELL THE TRUTH. Tell the truth to the sales force, to the head of compliance, to the law department, to the top executives and finally, if necessary, to the Board that runs the company. This simple rule is much more complicated than it seems.
To tell the truth, you must first get all the facts by a thorough and careful investigation. And then you must know the laws and ethical standards that apply, including the company’s Code of Ethics. To be able to tell the truth, you will need help.
You need help from marketing and sales employees who trust you to help them compete fiercely in the marketplace, but who will stop a business practice when you say it is not permitted. They will also tell you when business is too good — when the profits are based on bribes and hidden on the books like legitimate business. The audit and legal officers will help you decide what is permitted and will back you up, so respect and make friends with other professionals.
To tell the truth to top management and to the Board, you need convincing evidence and clear thinking to show that you are protecting the company from a terrible mistake and that your intention is to help, not harm, the company. And you need the courage of your convictions plus all the trust and popularity you have developed over the years. You cannot be seen as playing politics or just trying to push your career.
You need to be able to explain to top executives or the Board why corruption is illegal, and how it will absolutely be uncovered eventually and punished. You must also create motivation by explaining why corruption violates worldwide norms of decent behavior, your company’s Code of Ethics and its business interests.
This is a tough profession, and it’s not for everyone. But please note: many companies — maybe even most companies — really do welcome good compliance professionals. You do not hear about companies that are not in trouble and not in the news. Their compliance professionals are encouraged to do their jobs and they do. Compliance professionals choose to work and stay at this kind of company where they can have long careers and the satisfaction of meaningful professional work done right.
I hope you will keep raising important questions for discussion. Thank you and stay in touch.
Michael Scher is a contributing editor of the FCPA Blog. He has over three decades of experience as a senior compliance officer and attorney. His work for major companies in New York and the Middle East includes military procurements, international trade contracting, supervision of national sales forces and trainings for compliance with related laws, like the FCPA or AML. Miami-based, he assists companies in trainings and work shops and FCPA-related projects or investigations. In addition to English, he speaks French and Hebrew. Contact him here.