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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Compliance is an exercise in uncertainty. That’s why we embrace it

It’s a big part of compliance that’s rarely spoken of, but uncertainty is always there. Compliance professionals constantly deal with it. They transform it into something more concrete and definite — more certain. Here’s what I mean.

In Harry’s 23-minute 1-2-1 breakout interview with William H. Erickson, the chief compliance officer at Supernal, they talk about sponsored travel and what’s permitted or forbidden.

“It’s tricky,” Erickson says, “because it’s not a bright line that once you cross it’s bad but before that line it’s totally ok.”

That describes most compliance questions. Is that a bribe or not? Hmmm.

If there were always a bright line between legal and illegal, acceptable and unacceptable risk, we wouldn’t need people with special expertise. Anyone could do the compliance job, even ChatGPT.

But there’s almost always uncertainty. And when in doubt, compliance professionals can’t just say no. Defaulting to no would cripple the company or, more likely, prematurely end the compliance professional’s career.

How do compliance professionals find the way from uncertainty to concrete and defensible answers, either yes or no?

Back to Erickson.

The first step, he told Harry in their discussion about sponsored travel, is to ask a very powerful question: Why?

Why did they have to come to our factory? Ok, fine. But why did they have to fly into Paris two days before rather than coming right to our facility. It sounds silly, it sounds very basic. But when you start asking all those questions, you really get to the heart of the matter.

You might still need to make a judgment call, he says. But often, asking why enough times brings a clear answer.

The answer might be yes. The travel is contractually required, and the agenda is limited to business-related activities. Therefore it’s compliant.

Or the answer might be no. There are too many days without a business agenda at the front or back end, accompanying family members or unrelated people with no business purpose for being there, or an intermediary is funding the travel, removing the company’s ability to control the budget and set the trip’s agenda.

Asking why before a problem happens is the upstream version of the 5 Whys, a method to find root causes. I talked about the power of the 5 Whys in another post.

Instead of waiting until there’s a problem, it’s a great idea to use the 5 Whys (or however many Whys it takes) to uncover facts relevant to a pending compliance decision. It’s prevention instead of cure.

But facts alone don’t necessarily create certainty. The next step for compliance professionals is to apply precedent, usually from prior FCPA enforcement actions. Are there facts close enough to yours to create certainty?

The DOJ and SEC brought enforcement actions against companies that, for example:

  • funded a $12,000 birthday trip for a government decision-maker from Mexico that included visits to wineries and dinners
  • spent $10,000 on dinners, drinks, and entertainment for a government official
  • arranged a trip to Italy for eight Iraqi government officials consisting primarily of sightseeing and giving each of them $1,000 in walking-around money, and
  • funded a trip to Paris for a government official and his wife that mainly was sightseeing in a chauffeur-driven vehicle.

From what you learned asking why, are facts from enforcement actions analogous to or different from what your business folks are proposing?

At this point, compliance officers will hope to be standing on solid ground, ready to say yes or no and defend their decision.

They’ve  used their training, tools, and experience, and transformed uncertainty into something more concrete and usable.


Uncertainty in the job is something I’ve been noticing for a long time.

A few years out of law school, I interviewed with the general counsel of Aramco for a law department post in Dhahran that I ultimately got. Describing the requirements during the interview, he said: “In this job, you have to be comfortable with uncertainty.”

Aramco’s ownership was in transition then, and there were constant questions about who the client really was and what laws applied to the company and its contractors. Dealing with that uncertainty was what the job was all about.

I’ve noticed that people react to uncertainty in different ways. For some, it’s upsetting and they don’t want any part of it.

But others flourish in uncertainty. It forces them to keep an open mind, ask a lot of good questions, think hard about what they’re hearing, and come up with defensible decisions.

That’s what compliance officers bring to the table. It’s how they contribute to their company’s safety and success.

And it’s what brings them personal satisfaction and professional rewards.

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