What is risk and how should it be evaluated? What is the data that should be reviewed to determine if an increase in sales is based on unethical or even illegal behavior? Finally, what happens when you migrate company personnel who have been involved in such illegal or unethical behavior to other locations, does their nefarious conduct spread throughout the organization or is it curtailed? In this episode Matt Kelly and I explore some of these questions and others.
Every Chief Compliance Officer (CCO) and compliance practitioner understands that the sales side of a business is where the highest risk is located because that is most generally the side of the business which generates the most money and potential profit. Yet looking at sales numbers are not something which compliance professionals will generally have access to as a part of a compliance program.
Sales spikes in low performing regions can and should be reviewed by a wide variety of disciplines within an organization, including compliance. One would think that companies would want to know and understand the reasons for any sales increase so that it could be determined if such strategies might work in other areas of a company’s operations. This is true for the compliance function as well. As far back as the December 2012, in the Eli Lilly Foreign Corrupt Practices Act (FCPA) enforcement action brought by the Securities and Exchange Commission (SEC), I raised the issue that a dramatic sales increase should be reviewed by compliance to determine if there were any corruption issues involved. This same logic works for sales in the US over products as benign as debit cards. Moreover, if you consider whether the issue should be reviewed by a Board of Directors, it certainly would be material for one state region going from worst to first in sales.
One CCO told me that every time he hears an employee who wins a sales award for making numbers wildly far above plan, he wonders what might have led to such remarkable attainment. Sales spikes is data that increasingly becomes more important for compliance to consider. Just as the Key Energy FCPA enforcement specifically mentioned transaction monitoring around massive increases in gift giving in a geographic region where sales had spiked.
What is the Federal Acquisition Regulation (FAR)
What’s the differences with DFARs?
What types of companies should be concerned?
Why should they be concerned?
This episode is dedicated exclusively to where FCPA enforcement, SEC enforcement, the compliance profession and compliance programs may be headed under the Trump administration, with a dash of anti-trust enforcement and EU Privacy Shield.
For Volkov’s post, “A New Administration: A New FCPA Enforcement Regime?” click here.
For Kelly’s posts, see the following:
For Armstrong’s blog post, “What does the election of President Trump mean for compliance?” click here.
For Rosen’s blog post (and great riff off of The Clash) “Should I Stay or Should I Go?”, click here.
The members of the Everything Compliance panel include:
For additional reading check out some of the following posts:
Show Notes for Episode 30, week ending November 18, 2016-the Thanksgiving edition:
In this episode, Matt Kelly and I take a deep dive into a couple of issues surrounding the new Trump administration. The first is the 'Trump Risk' disclosure that several companies have made since the election. The second is around Dodd-Frank and the SEC going forward. When Trump speaks about repealing Dodd-Frank, it means easing rules for capital formation, not the whistleblower program or other more traditional compliance related roles and issues. We discuss Paul Adkins, who is heading up the Trump transition at the SEC and what his prior tenure at the SEC may portend. Finally we discuss why the SEC whistleblower program is not going away but there may be a change in focus from the current aggressive approach under Chairman Mary Jo White. We wave good-bye to Kevin O'Connor who was in then out on the Trump DOJ transition team. For more reading see Matt's blog posts:
In this episode, I visit with white collar defense specialist Sara Kropf, founder of the Kropf Law Firm. She discusses defending corporate executives and employees who are caught up in corporate internal investigations which may be turned over to the government. She discusses how the Yates Memo has changed the relationship between such employees, their counsel and the company. She blogs at Grand Jury Target blog.
Some of the issues we explore include the following.
Show Notes for Episode 29, week ending November 11, 2016-the Brave New World edition:
In this episode, Matt Kelly and I take a deep dive into how the SEC may look under the Trump administration and what it may portend for FCPA enforcement. We consider how companies currently under investigation or engaged in negotiations for a resolution may position themselves during the final months of the Obama administration. For additional information check out Matt Kelly's blog post on the subject, click here- Five Post-Election Points for CCOs to Ponder.
Show Notes for Episode 1
At the SCCE 2016 Compliance and Ethics Institute, I sat down with four of the top compliance commentators in the field for my first roundtable-style podcast. It was so successful that I persuaded the gang to come back together every couple of weeks for a formal podcast, which is entitled Everything Compliance. The premier episode is available for your listening pleasure today. I will post a new episode every two weeks.
I host these four well-known compliance practitioners and commentators:
The format is a roundtable discussion where I throw out a question to one commentator to lead the discussion. From that starting point we will all join in. I also include an “On My Mind” segment where each participant discusses what is on the forefront of their mind. This podcast is longer than my others, coming in at around 60 minutes, which allows us to explore the week’s issues in depth.
In the inaugural episode we discuss the following subjects:
For Volkov’s post on conflicts of interest (COI) in internal investigations after the Yates Memo, click here.
For Kelly’s blog post on the intersection of CEO pay and Chief Compliance Officers (CCOs), click here.
For Rosen’s blog post Designing Your 2017 Ethics, Compliance & FCPA Conference Schedule, click here.
This new podcast Everything Compliance joins the four other podcasts I have on different aspects of compliance. The original FCPA Compliance and Ethics Report focuses on the nuts and bolts of compliance. Unfair and Unbalanced - is a podcast I do with SCCE CEO Roy Snell. In it we focus on wide ranging issues for the compliance profession. Compliance into the Weeds - is a podcast I do with Matt Kelly where we take a deep dive into the weeds of a compliance issue, typically technology, internal controls or GRC. We both indulge our inner geekiness in this podcast. Jay Rosen and I wrap up each week in FCPA, compliance and ethics with This Week in FCPA. All of these podcasts are available to you on my site, FCPAcompliancereport.com, and are available on iTunes under the same name.
In this second part of a two-podcast series, taped live at SCCE’s 15th Annual Compliance & Ethics Institute, Roy and myself get a chance to interact with a live audience and bounce from topic to topic, discussing:
In this podcast Matt Kelly and I take a deep dive into an area rarely discussed in the compliance space, namely budgeting. How should you think through the budgeting process; how does your company benchmark against its peer; how can you determine the proper amount of budget for your company's compliance department. We explore these and other questions on this podcast. For additional resources see Matt Kelly's blog post "Finding the Right Compliance Budget for You" on his site, radical compliance.com.
Show Notes for Episode 28, week ending November 4, 2016-the High Anxiety edition
In this episode, I visit with Duke Law School Professor Samuel Buell about his book Capital Offenses-Business Crime and Punishment in America's Corporate Age. We explore some of his theories on why corporations are so difficult to prosecute, what corruptly means under the FCPA and his ideas on potential reforms.
In this part one of a two-part podcast, taped live at SCCE’s 15th Annual Compliance & Ethics Institute, Tom & Roy get a chance to interact with a live audience and bounce from topic to topic, discussing: