If you were the compliance officer for the largest company in Atlanta in 1965, the CEO might have asked you about Martin Luther King winning the Nobel Peace Prize and a dinner sponsored by the mayor in his honor. The mayor said the business community of Atlanta, still racially segregated, hadn’t bought any tickets and the dinner could be a fiasco.
What if anything would you advise the boss to do? And, more to the point, might you respond with annoyance that this is “not your job.”
In King’s birthplace, Atlanta Georgia, museums tell the story of this legendary showdown in the business community. King and his civil rights movement weren’t welcome in Atlanta and throughout the South. In the wonderful movie, Selma, the horrifying violence is portrayed as it was. Nobel Prize winner or not, most of the business community wanted nothing to do with the young preacher and his band of ordinary citizens who were “making trouble.”
But the CEO of Coca-Cola told the business community:
“It is embarrassing for Coca-Cola to be located in the city that refuses to honor its Nobel Prize winner. We are in international business. The Coca-Cola Company does not need Atlanta. You all need to decide whether Atlanta needs the Coca-Cola Company.”
Hours later the event was completely sold out. The CEO subsequently received many awards for his support of the nascent civil rights movement.
As far as I know, the Coca-Cola Company in 1964 did not have a compliance program or a chief ethics and compliance officer. Today, however, we’re witnessing an historic moment of change in the business community. Compliance officers are now untethered from law departments. These compliance professionals 2.0 are defining what their roles will be concerning integrity, compliance with laws, and counseling senior management. Is it ever their job to urge senior management to take a moral position equivalent to backing Martin Luther King in 1964?
Where should the line be drawn for companies and their leaders about the moral issues we face today? I don’t have all the answers. But I’m suggesting that while compliance professionals are defining their new role, they shouldn’t avoid considering redrawing the moral boundaries between their company and society.
The business community and multinational companies increasingly enjoy control over global resources and political power rivaling many national governments. Do they have a moral obligation to use their resources and power to fight corruption? Should they assist the global rising middle class of entrepreneurs who say “I want a legal life?” Should they join the fight against kleptocracy that destroys institutions, personal freedom, and whole nations.
Some regulators and enforcement agencies already suggest that banks and other firms should be prosecuted for not taking enough responsibility in the “network against network” war between civilized society and organized crime rings and terrorism. Will the law soon require compliance officers to enlarge the moral borders between a company’s operations and the wider community?
As depicted in Selma, in 1964, even the president of the United States suddenly had to face his moral obligation to support the civil rights movement. And the CEO of one of the world’s best known corporations had to acknowledge the problems of segregation and take responsibility for being part of the solution.
As recently as the 1990s, bribery was tax-deductible in some of the world’s major economies. Now we’re seeing the Second Generation of compliance — independent professionals performing a distinct corporate function with a focus on legal compliance and integrity. We should not be surprised at how far their responsibilities may proliferate. Indeed, in my opinion, we should welcome it.
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.