The SCCE Compliance & Ethics Institute could become the focus for an annual debate within the compliance field about the critical issues ahead. In honor of the SCCE’s 10 years of supporting compliance officers, here are my top ten suggestions for next year’s SCCE agenda:
10. How to Fire a Compliance Officer – When compliance officers are fired just for doing their jobs, that’s retaliation. On the other hand, a compliance officer can be rigid, incompetent or insubordinate when the chief ethics and compliance officer makes a reasonable call. Should firing a compliance officer be done in a special channel not the usual HR process, for example, after a board or other high level review? How can the CECO and the company both protect compliance officers from retaliation and also weed out non performing compliance officers? For more thoughts about the importance of this issue, see my post here.
9. Compliance is a “System” Not Just a Company Program – When the system works, companies change course and adopt better business practices, if only initially to avoid the SEC”s Office of the Whistleblower. When should the SCCE be the Lion of Compliance, for example, by filing amicus, “friend of the court” briefs, versus engaging in quiet diplomacy through its many allies, including former DOJ/SEC officers? How about an amicus in the Walmart case and a challenge to the DOJ’s surprising policy of ignoring in pleas or settlements in non-FCPA cases, whether a company had no compliance program or only a paper one, in which case the penalties go up and vice versa?
8. Does the SCCE need a Government Relations Department? – Joe Murphy, Director of Public Policy and Donna Boehme can’t do it all alone. Should the SCCE have a dedicated Government Relations Department to parallel those in most companies and industry associations?
7. Second Generation Compliance: A Business Solution to a Business Problem: The problem is the never-ending scandals from lapses in business integrity and operational failures. The solution is second generation compliance — a new business discipline and not a subset of the law department. This requires new thinking, for example: Is compliance a business discipline or a profession like law? What’s the best way for the SCCE to collect and systematize the body of business knowledge compliance officers are creating on the job by trial and error? Does relying exclusively on legal-based standards in the Federal Sentencing Guidelines, the DOJ/SEC Hallmarks, and the United States Attorneys Manual hold back compliance thinking? Instead, should compliance officers start incorporating the sophisticated business models developed by top consulting firms and business schools? I also discussed these issues in Part Four of this series.
6. Does the business of compliance need a compliance officer? – Anti-corruption is a growing, profit-generating business. It is subject to conflicts of interest and temptations to do lawful-but-awful business. Does the anti-corruption field need regulation, compliance programs and chief compliance and ethics officers?
5. No More Retaliation Against Compliance Officers – In the context of any potential resolution by the DOJ with Walmart, the company’s deferred- or non-prosecution agreement should set a precedent that the feds will not settle unless the company promises no retaliation against compliance officers who are just doing their jobs. A DPA could require anti-retaliation charter provisions and a board resolution adopting the SCCE Code of Ethics. I discussed the retaliation issue in this post.
4. Caremarking the Board in Delaware – Again in the Walmart context, its board allegedly sided in bad faith with Walmart’s 2006 senior management in replacing an effective compliance program with a just-invented one intended to cover up reports of bribery, the opposite of the Caremark standards. A win for the plaintiffs on this point in the Delaware litigation could require an amicus brief but could shape board oversight, the lynch pin of CECO power, for years to come.
3. The Shame of the Settlement? – The DOJ allows companies to pay fines into the U.S. Treasury and escape prosecution under pre-trial agreements without doing anything for the countries where the bribes took place. Cynics have asked why the DOJ doesn’t “share the profits.” If Walmart is found to have committed FCPA violations, will the DOJ permit the company to settle with a fine and a deferred prosecution agreement, and keep the stores allegedly obtained through bribery. Or will the DOJ work with Walmart on true remediation — perhaps to create a fund, as Siemens did with $100 million, to promote compliance and repair the damage done?
2. Collective Action – Especially in high growth, high corruption-risk, emerging markets, the company is stuck with the choice of cheating verses giving up market share and profitable business, unless all competitors agree not to cheat. The SCCE should invite European friends like the legendary OECD leader and Basel Institute President Mark Pieth to explain how collective action works. For example, rather than paying bribes through a faux consultant, all competitors, with help from a facilitator could sign an agreement not to cheat and instead use a consultant who’s policed by a neutral party. Resolved for SCCE debate: Compliance programs and the people who run them should help business executives create collective actions. Remarkably, Siemens does this now, over and above its $100 million initiatives fund coordinated through the World Bank. (See Annual report, p.226 and Mark Pieth’s essays, Collective Action, p.177). I discussed this issue in my post here.
1. Help Compliance Officers Receive the Credit They Deserve – Like the Men in Black, every week compliance officers head off disasters and fix things behind the scenes. The public never hears about their successes. How can the SCCE get that story into the headlines and explain why compliance officers deserve more credit and support?
What’s on YOUR 2015 SCCE agenda?
Michael Scher is a senior editor of the FCPA Blog. He has over three decades of experience as a senior compliance officer and attorney for international transactions. He can be contacted here.