Donna Boehme – The Compliance & Ethics Blog – February 28, 2017
Ever since the news broke of various VW execs being arrested, including the US-based compliance “environment and emissions manager,” I’ve seen some mild hysteria from my networks. As Roy Snell pointed out, the VW manager wasn’t even a compliance professional. So I’d like to share my view that absolutely nothing about these developments should worry compliance professionals or CCOs. And former federal prosecutor Mike Volkov agrees with me.
This is not the thermonuclear case we in the profession all fear: a CCO being held personally accountable for an act not prevented, found, or fixed by the compliance program he or she oversees. No, this is not a case of a CCO being scapegoated, but a compliance professional (or maybe just an operations guy, as per Roy) being held personally accountable for his direct individual bad acts in support of the enormous and far-reaching VW emissions fraud, including:
- Conspiring to defraud customers.
- Lying to and misleading EPA and California regulators.
- Orchestrating a “massive cover-up” of the fraud by citing technical reasons for the emissions test discrepancies.
- Obstructing the fraud investigation by destroying documents related to the scheme.
- Importing these cars into the U.S. by means of false statements.
EthiTweeps, please read the news reports of the VW arrests very carefully. I think you will understand why I find this case considerably less troubling than some of the past rhetoric from the SEC regarding compliance officers. To those in our profession and my networks who are worried by the VW arrest, I remind you of these immortal words from our own Patrick Gnazzo at a company management conference (as once reported in a 2006 Business Week cover story on The New Ethics Enforcers): “Don’t lie, don’t cheat, don’t steal!”
Certainly, any effort by regulators or enforcers to hold a CCO responsible for corporate misconduct absent their own individual bad acts should prompt an instant response from the profession. But in the meantime, I have these suggestions to add to Pat’s simple admonition above:
- Choose your job carefully.
- Always remember your mandate, and take no actions in support of management misconduct that falls outside your mandate.
- Stay close to your Board, take careful notes, and be prepared to resign if you are commanded to take actions in support of management misconduct/illegal acts or that undermine the compliance program. Some examples:
- You are ordered to lie or cheat.
- You are ordered to falsely change a Board report, an investigation report, or prepare a false certificate.
- You are ordered to reveal confidential information or a confidential identity in violation of your Investigation Guidelines (Wait… you DO have Investigation Guidelines, right?)
- If you are fired for doing your job well,
- Take care of your family;
- Lead your team; and
- Talk to the Board on your way out.
- If scandal strikes and you are close to it, get your own independent qualified lawyer and advisors – and fast.
There you go #EthiTweeps, some simple rules to live by. If you have any questions or need more detail, write to me and I will respond. As I said, don’t worry about that VW arrest. We are not anywhere near a slippery slope! #ROWRR