It has often struck me that one of the things the compliance function must do is to internally market its role in a company. By this I do not mean the internal competition for funding that occurs annually, although that is certainly something which the compliance function must also go through. The internal marketing function of compliance is to get employees not only to understand the message of compliance but, even more so, to think about and use compliance in their day-to-day operations. I recently heard a podcast on social media marketing which had some concepts I thought applicable to the compliance function and its internal marketing role within a company.
The podcast is on the Social Media Examiner site, which brands itself as “Your Guide to the Social Media Jungle.” The podcast, entitled “Social Sharing: How to Inspire Fans to Share Your Stories” is hosted by Michael Stelzner, Chief Executive Officer (CEO) and Founder of the site. Stelzner interviews Simon Mainwaring, author of We First: How Brands and Consumers Use Social Media to Build a Better World. Mainwaring is a consultant who has worked with brands like Nike and Motorola and is hosting the upcoming “We First Social Branding Seminar” in West Hollywood in a few days.
The focus of the podcast was on the use of social media by your employees and customer base to increase market share. However, Mainwaring said something that struck me as key to building a successful compliance program. He was discussing your employee base as one of your most key marketing resources because they are your first and best line of advertising. He said that to allow them to market successfully there are three key components, (1) Let your employees know what you stand for; (2) Celebrate their efforts; and (3) Give them a tool kit of different ways to participate. I think each of these concepts can play a key role for the compliance practitioner in internally marketing their compliance program.
I. Let Your Employees Know What You Stand For
In the FCPA Guidance, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) said that the basis of any anti-corruption compliance program is the Code of Conduct as it is “often the foundation upon which an effective compliance program is built. As DOJ has repeatedly noted in its charging documents, the most effective codes are clear, concise, and accessible to all employees and to those conducting business on the company’s behalf.” That well known @CodeMavencc, Catherine Choe, has said that she believes “Two of the primary goals of any Code are first, to document and clarify minimum expectations of acceptable behavior at a company, and second, to encourage employees to speak up when they have questions or witness misconduct.”
But more than the Code of Conduct, does your company really communicate that it stands for compliance? Obviously formal anti-corruption training under the Foreign Corrupt Practices Act (FCPA) is important but I think that more is required to reinforce that your company has a culture of compliance throughout the organization. In other words, are you communicating what you stand for and not simply the rules and regulations of a compliance program?
II. Celebrate Their Efforts
Once again the FCPA Guidance speaks to the need to incentivize employees in the company realm. The Guidance states, “DOJ and SEC recognize that positive incentives can also drive compliant behavior. These incentives can take many Guiding Principles of Enforcement forms such as personnel evaluations and promotions, rewards for improving and developing a company’s compliance program, and rewards for ethics and compliance leadership. Some organizations, for example, have made adherence to compliance a significant metric for management’s bonuses so that compliance becomes an integral part of management’s everyday concern.” But more than simply incentives, it is important that “[M]ake integrity, ethics and compliance part of the promotion, compensation and evaluation processes as well.”
Mainwaring’s concept means going beyond incentivizing. To me his word ‘celebration’ means a more public display of success. Financial rewards may be given in private, such as a portion of an employee’s discretionary bonus credited to doing business ethically and in compliance with the FCPA. While it is certainly true those employees who are promoted for doing business ethically and in compliance are very visible and are public displays of an effective compliance program. I think that a company can take this concept even further through a celebration to help create, foster and acknowledge the culture of compliance for its day-to-day operations. Bobby Butler, Chief Compliance Officer (CCO) at Universal Weather and Aviation, Inc. has spoken about how his company celebrated compliance through the event of Compliance Week. He said that he and his team attended this event and used it as a springboard to internally publicize their compliance program. Their efforts included three separate prongs: they were hosting inter-company events to highlight the company’s compliance program; providing employees with a Brochure highlighting the company’s compliance philosophy and circulating a Booklet which provided information on the company’s compliance hotline and Compliance Department personnel.
III. Give Your Employees a Tool Kit For Compliance
Obviously a key component of any effective compliance program is an internal reporting mechanism. The FCPA Guidance states that “An effective compliance program should include a mechanism for an organization’s employees and others to report suspected or actual misconduct or violations of the company’s policies on a confidential basis and without fear of retaliation.” The Guidance goes on to also discuss the use of an ombudsman to address employee concerns about compliance and ethics. I do not think that many companies have fully explored the use of an ombudsman but it is certainly one way to help employees with their compliance concerns. Interestingly, an interview in the Wall Street Journal (WSJ) today, with Sean McKessy, Chief of the SEC’s Office of the Whistleblower, he stated that “What I hear is that companies are generally investing more in internal compliance as a result of our whistleblower program so that if they have an employee who sees something, they’ll feel incentivized to report it internally and not necessarily come to us.”
But, more than a reporting tool for compliance, there are other ways a company can help employees do business in a compliant manner. One commercial tool which immediately comes to mind is Navigator, developed by the firm of Stroz Friedberg LLC, which the firm calls “a groundbreaking mobile and desktop application that makes your compliance program come alive! It automates clear answers and approval processes, and even offers data analysis for enhanced decision-making. The Navigator “app” is custom-tailored to each client and offers an array of benefits to any organization seeking easier ways to drive a positive corporate compliance culture.” I have seen this tool and it is way cool.
Yet there are other tools which are available, at no cost, and can be downloaded onto a mobile device such as a smartphone or iPad. These include the O’Melveny & Myers LLP Foreign Corrupt Practices Act Resource Guide; which concentrates solely on the FCPA and is primarily a new vehicle to distribute content it already makes available upon request. This content includes O’Melveny’s FCPA Handbook and O’Melveny’s In-House Counsel’s Guide to Conducting Internal Investigations. In addition, the app features five resource sections that serve as an interactive, illustrative directory with titles ranging from ‘O’Melveny Authored Client Alerts’ to ‘DOJ Opinion Releases.’
Another approach is found in the Latham & Watkins LLP’s AB&C Laws app which takes an international approach to anti-corruption and anti-bribery laws and its scope is international, with the content focused on organizing and easing access to statutes and regulatory guidance according to specific fields of interest, from legislative frameworks to extra-territorial application to enforcement and potential penalties. It also includes official guidance such as steps (where available) that can be taken to reduce the risk of liability for bribery and corruption.
There is much to be learned by the compliance practitioner from the disciplines of marketing and social media. These three concepts are useful to aiding companies in getting their sales pitches out and can be of great help to you, the compliance practitioner, in communicating marketing throughout your company as well.
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© Thomas R. Fox, 2013