As I end this month of the Land of 1000 podcasts, I conclude with a week of King Arthur and his Roundtable themed-podcasts. It turns out there are many compliance lessons from the entire oeuvre of Arthurian legends. Many of the tales can inform your (modern day) compliance program. I begin with King Arthur and some leadership lessons that might apply to a Chief Compliance Officer, compliance practitioner. Today we consider Arthur’s Pentecostal Oath and your corporate Code of Conduct.
One thing for which King Arthur is remembered are his chivalric knights. He helped create this legend, in large part, by establishing a Code of Conduct for the Knights of the Round Table. The King required each one of them to swear an oath, called the Pentecostal Oath, which was Arthur’s ideal for a chivalric knight. The Oath stated, “The king established all his knights, and gave them that were of lands not rich, he gave them lands, and charged them never to do outrageousity nor murder, and always to flee treason; also, by no mean to be cruel, but to give mercy unto him that asketh mercy, upon pain of forfeiture of their worship and lordship of King Arthur for evermore; and always to do ladies, damosels, and gentlewomen succor upon pain of death. Also, that no man take no battles in a wrongful quarrel for no law, ne for no world’s goods. Unto this were all the knights sworn of the Table Round, both old and young. And every year were they sworn at the high feast of Pentecost.” (Le Morte d'Arthur, pp 115-116)
Interestingly, the Oath first appeared in Sir Thomas Malory’s LeMorte d’Arthurand in none of the prior incarnations of the legend. In Malory’s telling, after the Knights swore the Oath, they were provided titles and lands by the King. The Oath specifies both positive and negative conduct; that is, what a Knight might do but also what conduct he should not engage in. The Pentecostal Oathformed the basis for the Knight’s conduct at Camelot and beyond. It was clearly a forerunner of today’s corporate Code of Conduct.
The foundational document of any compliance program is its Code of Conduct. This requirement has long been memorialized in the US Sentencing Guidelines, which contain seven basic compliance elements that can be tailored to fit the needs and financial realities of any given organization. From these seven compliance elements, the DOJ has crafted its minimum best practices compliance program, which is now attached to every DPA and NPA. These requirements were incorporated into the 2012 FCPA Guidance, the Evaluation of Corporate Compliance Programs and new FCPA Corporate Enforcement Policy. The US Sentencing Guidelines assume that every effective compliance and ethics program begins with a written standard of conduct; i.e. a Code of Conduct. What should be in this “written standard of conduct”.
The substance of your Code of Conduct should be tailored to the company’s culture, and to its industry and corporate identity. It should provide a mechanism by which employees who are trying to do the right thing in the compliance and business ethics arena can do so. The Code of Conduct can be used as a basis for employee review and evaluation. It should certainly be invoked if there is a violation. To that end, I suggest that your company’s disciplinary procedures be stated in the Code of Conduct. These would include all forms of disciplines, up to and including dismissal, for serious violations of the Code of Conduct. Further, your company’s Code of Conduct should emphasize it will comply with all applicable laws and regulations, wherever it does business. The Code needs to be written in plain English and translated into other languages as necessary so that all applicable persons can understand it.
The DOJ expects each company to begin its compliance program with a very public and very robust Code of Conduct. If your company does not have one, you need to implement one forthwith. If your company has not reviewed or assessed their Code of Conduct for five years, I would suggest that you do in short order as much has changed in the compliance world. What is the value of having a Code of Conduct? I have heard many business folks ask that question over the years. In its early days, a Code of Conduct tended to be lawyer-written and lawyer-driven to “wave in a defense situation” by claiming that “see we have one”. But is such a legalistic code effective? Is a Code of Conduct more than simply, your company’s law? What is it that makes a Code of Conduct effective? What should be the goal in the creation of your company’s Code of Conduct?
Just as the Pentecostal Oathwas required to be sworn out each year, you should have your employees recertify their adherence to your Code of Conduct. Moreover, just as King Arthur set his expectations for behavior your company should do so as well.