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The importance of setting a good compliance example

Former U.S. Attorney for the Southern District of New York Preet Bharara (Image from YouTube)Preet Bharara gave the morning keynote at the second day of Compliance Week 2019. It was interesting because rather than a speech he did so with a one-hour Q&A format with Allen & Overy partner Gene Ingoglia facilitating the session through the role of the questioner.

He gave several lessons for the compliance practitioner and one struck me as very powerful. It was a lesson on why you should not walk up to the ethical line and try to firmly place your foot against it when doing business.

He used the analogy of someone who wants to drink alcohol right up to the state limit and then drive home. You might think such a person would have a breathalyzer at the ready but Bharara said you must go further than that simple metric. You would need to factor in such things as body weight, body mass, length of time for ingestion, length of time between alcoholic beverages, percentage of actual alcoholic content in the beverage (as opposed to simply the alcohol proof) and of course measurement of your actual blood alcohol through blood testing.

At this point, you might feel safe that the risk management strategies to drink up the limit, not go over so you can drive home are not only quite high but are also quite sophisticated. You would have to be expert in a wide variety of sciences and medical skills. However you might actually have these skills or you could learn them. Of course, the cost of being wrong and stepping over the line could mean a multi-year physical incarceration in the state penitentiary. Further, all of this might be for naught if you pulled over and tested with another breathalyzer which has a different calibration.

However there is another cost which Bharara identified beyond your own physical liberty. He said that your behavior might be observed by another less competent person who does not engage in the same robust risk management strategy that you use and simply drinks too much to drive legally. Further if enough people see you and copy the behavior it could be a serious health and safety problem and perhaps even but the drinking establishment at risk for shut down by state authorities for over-serving customers.

Bharara’s story illustrates several key lessons for the compliance practitioner. A company can rarely walk right up to the ethical or compliance line without expending significant cost and still running the risk of stepping over the line. Yet it was the greater team lesson which I found so powerful. That is, if others see someone going up to the line and not crossing it would they engage in the same rigorous risk management process or would they simply step over the line?


Tom Fox is the Compliance Evangelist™. He leads the social media discussion on compliance with his award-winning blog, The FCPA Compliance and Ethics Blog and eight podcasts; The FCPA Compliance Report, Compliance into the Weeds, Everything Compliance, This Week in FCPA, 12 O’clock High-a Podcast on Business Leadership, Compliance Report-International Edition, Countdown to GDPR and Across the Board. 

He’s the author of 12 books on compliance, ethics and leadership. His latest Amazon bestseller, “The Compliance Handbook” is available here.

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  1. Very interesting analogy that we might frequently check upon several organizations. The so called "measured risk" is not that known, is it? Can it be accepted or simply taken? Other words that could define such situation are: negligence.or underestimation.

  2. When there is an emergency, organizations and their leaders seem to be under the most pressure to go close to or over the ethical limit. I am reminded of the book, PLAYING TO THE EDGE, by Michael Hayden, who was director of the US National Security Agency after 9/11.

  3. Love the analogy, and wish I was there. In the compliance profession, we know so much of our job is about helping our employers and colleagues conduct effective risk management over their ideas. To extend the analogy a bit further, Compliance is often playing the role of designated driver, at times when it doesn't want to. Moreover, it is so dangerous when your inebriated friends leave the party without you.

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