If you’re a non-American compliance officer working in the hazardous, lawless conditions of many countries, it’s not clear what can be done. But this much is certain — COs working to create a code in China or India and so many other places need to know they have global support from compliance officers everywhere.
The working conditions of non-American compliance officers are often outrageous, demanding sustained monitoring by compliance professionals from outside, and needing the support of global associations to provide the safety of public attention.
And that’s how a global Compliance Officer Code would help. It would at least assure COs everywhere, even in the tough environments that we’ve mentioned, that they’re on the right side of international standards even when they’re under attack by powerful forces.
This is a great discussion. But the weakness of any talk about Compliance Officer Codes is the failure to address the root cause: powerlessness. Any Code does not currently have the force of law or regulation (though there is some welcome new precedent for an SEC rule against misleading a CO). And violating a CO Code isn’t grounds as yet for debarment from the profession. So at some companies, management will exploit this weakness and continue to dominate the compliance function with impunity — code or no code.
The problem I’m talking about is not only for compliance officers and the compliance profession. It impacts businesses everywhere, and even the governments that try to regulate them. That’s why compliance officers pushing for adoption of global standards need the support of business associations, and of government agencies, NGOs, and even bloggers. Changing a global norm to protect one group (compliance officers) at the expense of another (non-compliant management) isn’t easy and can’t be done by one group or constituency alone.
Will companies be ready to sign a version of a CO Support Pledge:
We will not demote, terminate or retaliate against COs acting in good faith to reasonably enforce the CO Code. Conflicts over interpretation will be escalated up to our Board. We promise not to hire or promote unqualified, timid COs, and to collaborate to increase the power and professionalism of COs and their CO associations.
While a Compliance Officer Code is all for the good, COs need management’s help to lead a drive for industry associations to throw in their support, to press members to incorporate a version of the CO Support Pledge in a Board resolution or charter for the compliance function, and to rally support from governments and NGOs everywhere.
I believe there are many people at leading companies who would like to help, if asked. The first step, then, is whether compliance officers will create an advocacy organization to speak for them, and ask the business side to step up.
Michael Scher is a contributing editor of the FCPA Blog. He has over three decades of experience as a senior compliance officer and attorney for international transactions. He is affiliated with ethiXbase, the owner of the FCPA Blog. He can be contacted here.