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« Some SEC employees hold banned stock, trigger ethics review | Main | Russia shows signs of reversing its bribery culture »
Wednesday
Jan222014

Compliance officers stand alone, but not apart

The correspondent wrote:

“In my job for the University, I am often alone in my efforts to convince the management and trustees of the system of the need for a comprehensive compliance initiative.

"In a presentation to the Trustees, I explained specifically about the FCPA ramifications of our international activity.  I also submitted a formal proposal carefully outlining the needs, steps, rewards, penalties, and cost estimates. Unfortunately, funding is not forthcoming.

"It is hard to believe that an institution as large as the University does not have a compliance hotline, let alone a compliance program. However, your blog entry has inspired me to renew my quest once again.”

*     *     *

That feeling of “going it alone” is a common one for compliance officers. If you have felt this way, you are not alone (ironically). You might be too isolated, but you are not alone. An occupational hazard, the question is how to face it, unless it’s already dangerous or career suicide. No compliance officers must be a martyr to the cause.

So a suggested step one: Stay Connected. It’s critical to morale and to refusing to give in or give up. By the way, it’s not just us: Advocates for many good causes say the same thing.

Sharing your obstacles via a blog, as you did, connects COs to each other. Consider joining a compliance association or pioneer better-networked compliance communities wherever you live, like Guanajuato, Mexico, China or Anywhere USA.

In addition to morale boosting, other compliance officers usually have practical advice. In that spirit, here are three pieces of advice from me, and hopefully others will write in, as we all stick together:

  • Asking an organization to launch a whole compliance program at once can be too much.  It happens all the time. Run the risks and build on small steps, wherever possible.
  • Have an ally-building strategy, in this case among students or faculty or one like-minded Dean. A recent boot camp for students generated interest and drew in local COs.
  • Explain patiently but firmly using case studies what laws may be violated and the risks of prosecution.  Though they wear the ‘halo’ of academia, universities are not exempt from terrible scandals or from regulations requiring compliance programs. Then you can explain the positives.

Thanks again for your letter. Though feeling alone sometimes, please stay connected.

_____________

Michael Scher is a contributing editor of the FCPA Blog. He has over three decades of experience as a senior compliance officer and attorney for international transactions. He is affiliated with ethiXbase, the owner of the FCPA Blog. He can be contacted here.

Reader Comments (2)

Unfortunately most companies try to analyze risk based on dollars. If the cost of implementing a full blown compliance program (import, export, FCPA, etc...) taps into revenue good luck obtaining funding. What many of the leaders do not understand is that the fines and penalties go directly to the bottom line, on the other hand perhaps they do understand this and are willing to take the risk - moving the violation to willful, which then moves the fines and penalties to criminal.

As regulations continue to change to better meet the needs of the global community as will enforcement. Thus I end with this: to all CEO's, CFO's and Boards - take heed of the importance of a full blown compliance program take the time to learn the requirements of Import, Export, FCPA, etc.... understand your companies practices surrounding these requirements ensure your annual budget allows for Compliance.
Are your products marked with proper Country of Origin? Have you aligned your inter-company transfer pricing with the rules of Valuation? Do you know who you are doing business with?
January 25, 2014 | Unregistered CommenterVanessa
This story sounds familiar and it is one I have heard a number times from fellow practitioners. Compliance can seem like a lonely practice especially if you are not working in a large organisation with an in-house compliance team to share with. Convincing the Board or Chief Execs to part with money is a hard job, especially where the return on investment is difficult to demonstrate. Do you job right and no one in the business notices a thing so was it money well spent? Do your job wrong and the business has issues which are then your fault.

My suggestion is to continue to try to educate the decision makers. Planning an awareness training you can run cheaply which shows their heads are on the block can work. Regarding the loneliness, finding a local group of compliance officers you can network with will help. You get someone to talk to and they may have some good suggestions on how to tackle your issues.
January 31, 2014 | Unregistered CommenterDarren Hickman

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