Compliance 2.0: DOJ Pushes the Compliance Agenda

Michael Volkov – Corruption, Crime & Compliance – April 24, 2016

The FCPA Paparazzi have a thick head and a stubborn chin. They just do not understand the significance of Compliance 2.0 to corporate governance and they blindly adhere to simplistic, yet unexplained, solutions to complex problems – kind of sounds like a presidential candidate we all know.

Without getting into politics, which I avoid here on this blog, DOJ’s recent FCPA guidance on voluntary, disclosure, cooperation and remediation sets out an ambitious push on ethics and compliance programs. Of course, the new remediation elements apply only to those situations where companies are seeking cooperation and disclosure benefits, along with implementation of a remediation plan.

The new compliance elements represent validation of the Compliance 2.0 model, which has been advanced by leading compliance strategists, such as Tom Fox (here), Donna Boehme (here), Roy Snell (here), and Joe Murphy (here). Unlike many in the FCPA Paparazzi, they have been pushing new and innovative compliance strategies for years that flow from the elevation of an independent compliance function in global companies.

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The Empowerment of the CCO: Old Ways Die Hard

Michael Volkov – Corruption, Crime & Compliance – April 6, 2015

“Why not go out on a limb? That’s where the fruit is.”  — Will Rogers

” Change is the law of life and those who look only to the past or present are certain to miss the future.”  — John F. Kennedy

The compliance profession continues to evolve and grow.  More lawyers and law students are seeking knowledge and training in the field of ethics and compliance.  There is a reason for that.

Donna Boehme, a leader in the ethics and compliance field recently wrote an important column on Compliance 2.0, and the death of Compliance 1.0. (Here and Here). Michael Scher, another compliance leader, has several important postings on this issue on the FCPA Blog (Here and Here).

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Defining Compliance 2.0: Key Compliance Partners (Part 5 of 5)

Michael Volkov – Corruption, Crime & Compliance – December 4, 2015

I always use the “Streetcar Named Desire” line to describe the challenges a  Chief Compliance Officer faces – CCOs depend on the kindness of strangers.  It is a little bit of an exaggeration but bear with me. CCOs are not superheroes and cannot by themselves ensure an effective ethics and compliance program.

An effective compliance program depends on a positive working relationship among the key compliance functions in a company. CCOs have to work closely with the General Counsel, the Internal Auditor, Human Resources, CFO and Comptroller, Information Technology, Security, Procurement, Senior Leadership Team, and of course, the CEO.

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Defining Compliance 2.0: Senior Leadership (Part 4 of 5)

Michael Volkov – Corruption, Crime & Compliance – December 3, 2015

Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.~ Vince Lombardi

Like so many areas in life, a successful ethics and compliance program depends on teamwork. My last two postings, Parts 4 and 5, will highlight these essential partners – senior leadership and key compliance functions.

In a company culture, teamwork is vital. There is always room for individual accomplishments and rewards but when it comes to ethics and compliance, teamwork is an essential piece. A compliance program depends on joint acceptance, activity and commitment – most importantly by business leaders in the company.

I have seen too many companies that focus primarily on the performance of the board, the CEO and the CCO, and ignore the valuable contributions that senior executives can make to an ethics and compliance program.

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Defining Compliance 2.0: The CCO (Part 3 of 5)

Michael Volkov – Corruption, Crime & Compliance – December 2, 2015

These are heady days for Chief Compliance Officers. Over the last 20 years, the CCO has moved from the backwater of corporate offices to the front and center of the power structure.

We now have debates over the independence of the CCO from the legal function, the reporting obligations and the relationship between the CCO and the board.

There is no question that CCOs have gained in the corporate structure. But CCOs have to be careful on two important fronts – they cannot overpromise on results, and they have to deliver in tangible ways on the business side of the equation. If CCOs mess up big time, or if they fail to communicate realistic expectations, CCOs will quickly suffer the budget ax and retribution from the board and CEOs in response to any major legal violation or reputational issue.

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Defining Compliance 2.0 — The CEO (Part 2 of 5)

Michael Volkov – Corruption, Crime & Compliance – November 30, 2015

Do the right thing. It will gratify some people and astonish the rest. – Mark Twain

We all know the obvious – a CEO’s commitment to ethics and compliance is critical to the success of a compliance program. A CEO who stands up and speaks about the company’s culture of compliance is more than a breath of fresh air – it can be the lifeblood of a compliance program.

A Chief Compliance Officer either has the support of the CEO or does not. There is no in between in this area. If you work at a company where the CEO has a signed letter in the front off your Code of Conduct and a videotaped recording of him or her talking about the importance of ethics and compliance — you do not have  a CEO committed to ethics and compliance.  A CEO who is committed to ethics and compliance has to back up his or her words with real actions – not just directions and orders, but personal actions.

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Defining Compliance 2.0: the board (part 1 of 5)

Michael Volkov – Corruption, Crime & Compliance – November 29, 2015

If you read through compliance writings, blogs, articles, white papers, and other sources, you will see the term “Compliance 2.0” bandied about.  It is a term that has yet to be defined but is taking on a life of its own – a reflection perhaps of the growing and continuing momentum behind the ethics and compliance function.

This series is an attempt to put some meat on the bones (yes, just after Thanksgiving) and advance the discussion around the new model for ethics and compliance.

In the last three years, compliance has been at a “standstill” in terms of defining the elements of an effective ethics and compliance program. The Justice Department and SEC’s FCPA Guidance was a watershed event in defining an effective ethics and compliance program, along with the UK Bribery Act’s adequate procedures, and continuing work from the OECD and other non-profit organizations. But in the end, it was DOJ and the SEC that have moved the compliance function to a new era, fueled by aggressive enforcement actions and political pressure to provide guidance to the business community.

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Compliance 2.0 and Trends: Culture and Technology

Michael Volkov – Corruption, Crime & Compliance – November 18, 2015

Compliance has to continuously improve – as companies innovate, so do critical foundation functions like compliance.

The forces of change on corporate governance and compliance were unleashed years ago. There is no way to put the genie back in the bottle – the wave is continuing to grow and so long as corporate misconduct continues, corporate compliance will continue to reinvent itself in new ways.

The days of paper policies, token gestures towards compliance, and half-hearted attempts to follow compliance requirements are gone. New ideas are brewing thanks to a compliance profession committed to innovation and compliance businesses developing new technologies to leverage compliance resources.

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