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FCPA Compliance Report

Tom Fox has practiced law in Houston for 30 years and now brings you the FCPA Compliance and Ethics Report. Learn the latest in anti-corruption and anti-bribery compliance and international transaction issues, as well as business solutions to compliance problems.
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Mar 29, 2017

Even with a great Tone-At-the-Top and in the middle, you cannot stop. One of the greatest challenges of a compliance practitioner is how to affect the ‘tone at the bottom’. In an article in the Spring 2012 Issue of the MIT Sloan Management Review, entitled “Uncommon Sense: How to Turn Distinctive Beliefs Into Action”, authors explored the “often overlooked, critical source of differentiation is [a] company’s beliefs” and provided techniques on how to tap into these beliefs. The authors listed seven approaches that they have used which I believe that the compliance practitioner can use to not only determine ‘Tone at the Bottom” but to impact that tone. They are as follows: 

  1. Assemble a group. You need to assemble a group of employees who are familiar with the challenges of doing business in a compliant manner in certain geographic regions. Include both long-time employees and those who are relatively new to the organization. The authors also suggest that if you have any employees who have worked for competitors or for other organizations in your industry you include them as well.
  2. Ask questions. You should ask the members of this group to articulate their basic assumptions about your compliance model, about the management model, about your company’s business model and the future of the industry in general. Ask them to do this individually and not as a group.
  3. Categorize the responses. Now comes the work by the compliance practitioner or compliance team. These assumptions will usually fall into two groups. The first is assumptions that everyone agrees upon-the common beliefs. The second is those assumptions that only a few of the participants will identify – this is what the authors call the “uncommon beliefs”.
  4. Develop tests for common beliefs. For those beliefs that are labeled common - you should consider how you know these to be true? The authors caution that simply because the group may believe that the company operates a common industry or that we “do it because it has always been done this way” is necessarily a “hard fact.” Consider what test you could perform to verify the common belief that you desire to test. The authors note that the purpose here is to “identify the ‘common nonsense’ beliefs that everyone holds that are not actually hard laws of nature.”
  5. Develop tests for uncommon beliefs. Here the authors suggest that you need to consider why some people think that these beliefs are true. What is the information or experience that they have drawn upon? Is there any way for you to test these uncommon beliefs?
  6. Reassemble the original group. You should reassemble the original group and have them consider the beliefs that were articulated by them individually in the context of your compliance model and how both your company and your industry do business. Lead a discussion that attempts to identify any assumptions or beliefs that ‘are quite possibly wrong, but worth experimenting with anyway.”
  7. List of Experiments to perform. The authors believe that the outcome of the first six steps will be “a list of possible experiments [tests] to conduct” to determine the validity of the common and uncommon beliefs. These tests can be accomplished in the regular course of business, through a special project with a special team and separate budget. You should agree on the testing process and review your testing assumptions throughout the process. This process can and should take some time so do not set yourself such a tight time frame that it cannot be fully matured.

By engaging employees at this level, you can find out not only what the employees think about the company compliance program but use their collective experience to help design a better and more effective compliance program. Employees want to do business in an ethical manner. Given the chance to engage in business the right way, as opposed to cheating; will win the hearts and minds of your employees almost all the time. By using the protocol suggested by the authors you can not only find out the effect of your company’s compliance program on the employees at the bottom but you can affect it as well. 

Mike Volkov said in an article entitled, “Mood in the Middle Versus Tone at the Top” that “Even when a company does all the right things at the senior management level, the real issue is whether or not that culture has embedded itself in middle and lower management.  A company’s culture is reflected in the values and beliefs that exist throughout the company.” To fully operationalize your compliance program, you must find a way to articulate and then drive the message of ethical values and doing business in compliance with such anti-corruption laws such as the FCPA from the top down, throughout your organization. 

Three Key Takeaways

  1. How is your compliance embedded at the bottom of your organization?
  2. Use of social media can help set the tone at the bottom.
  3. A company’s culture is reflected in the values and beliefs that exist throughout the company-make certain you assess it and use that information going forward. 

This month’s podcast series is sponsored by Oversight Systems, Inc. Oversight’s automated transaction monitoring solution, Insights On Demand for FCPA, operationalizes your compliance program. For more information, go to OversightSystems.com.

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