Earlier this week, Matt Kelly broke the story of  Secretary of Defense James Mattis Memo on Ethics to all Department of Defense (DoD) employees, in a blog post entitled “Secretary Mattis’ Insights on Ethics”. On Wednesday, Matt and I devoted an entire Compliance into the Weeds podcast (Episode 49 – The Mattis Memo on Ethics) to the subject, discussing the substance of the Memo and speculating as to the reasons for its issuance and very soft release. I was so impressed by the Memo and its significance to the compliance practitioner and wider compliance profession that I decided to post a blog on it.

The Memo itself comes in at around 250 words and is worth citing in its entirety as to be one of the best statements of doing ethics that I have read in one place in some time. It is entitled “Ethical Standards for All Hands” and it reads as follows:

            Those entrusted by our nation with carrying out violence, those entrusted with the lives of our troops, and those entrusted with the enormous sums of taxpayer money must set an honorable example in all we do.

            I expect every member of the Department to play the ethical midfield. I need you to be aggressive and show initiative without running the ethical sidelines, where even one misstep will have you out of bounds. I want your focus to be on the essence of ethical conduct: doing what is right at all times, regardless of the circumstances or whether anyone is watching.

            To ensure each of us is ready to do what is right, without hesitation, when ethical dilemmas arise, we must train and prepare ourselves and our subordinates. Our prior reflection and our choice to live by an ethical code will reinforce what we stand for, so we remain morally strong especially in the face of adversity.

            Through our example and through coaching of all hands, we will ensure ethical standards are maintained. Never forget our willingness to take the oath of office and to accept the associated responsibilities means that every citizen who have never met us trust us to do the right thing, never abusing our position nor looking the other way when seeing something wrong.

            I am proud to serve alongside you.

            /s/ James Mattis

I want to go through it in detail. The opening paragraphs lays out the basic values of the US military: duty, honor and country. It then moves to the “ethical midfield” which is a phrasing I have heard once before when performing a risk assessment for a US energy company at their Singapore office. The head of the office told me “There is enough money to be made in the middle. I don’t have to go to the sides where I can get in trouble.” That formulation struck me then and has always stuck with me since that time.

Yet Mattis seems to be using more of a soccer or a football metaphor. Nevertheless, I found the same analogy, which is the closer you get to the ethical sidelines, the easier it is to have a misstep that would put you out of ethical bounds. He ends this paragraph with “Doing what is right at all times, regardless of the circumstances, or whether anyone is watching.” Many people say that is precisely what ethics is, is doing the right thing when no one is watching. Here, we have the secretary of the largest military on Earth saying that. It simply cannot be more powerful.

The next paragraph is about training and to ensure that each DoD employee will do what is right without hesitation. To do so, they must in the military parlance for education “train” to “prepare ourselves and our subordinates.” This seems to almost echo the Department of Justice’s (DOJ’s) Evaluation of Corporate Compliance Programs around training. In Prong 6 Training and Communication it asks the following question, Form/Content/Effectiveness of Training Has the training been offered in the form and language appropriate for the intended audience? How has the company measured the effectiveness of the training? Here it seems Mattis is spot on that training must be real world based to give DoD employees the same ethical situations they will face in their jobs, which we know from the first paragraph includes “carrying out violence”.

The final sentence of this paragraph states, “Our prior reflection and our choice to live by an ethical code will reinforce what we stand for, and that we will remain morally strong in the face of adversity.” This final sentence seems to have drawn inspiration from the Preamble to the Foreign Corrupt Practices Act (FCPA) itself which said the law was passed in part, because bribe payments were not only “unethical” but also “counter to the moral expectations and values of the American public”. Moreover, such commercial bribery, tended “to embarrass friendly governments, lower the esteem for the United States among the citizens of foreign nations, and lend credence to the suspicions sown by foreign opponents of the United States that American enterprises exert a corrupting influence on the political processes of their nations”. Which is a way of saying that by having, training on and modeling high ethical standards, the US military will demonstrate the values of the country they defend.

In the penultimate paragraph the first line really struck me. It reads, “Through our example and through coaching of all hands, we will ensure ethical standards are maintained.” Here, he really seems to be focusing on the fact that it is not just your duty to engage in ethical behavior and ethical standards, but you Mr. General, Mr. Colonel, Mr. Lt Colonel, Mr. Major, Mr. Captain, Mr. First Lieutenant, Mr. Second Lieutenant, Mr. Sergeant, and/or Mr. Corporal must train the people below you. You must coach and model on ethics to all hands at all times to ensure that ethical standards are maintained. I thought Mattis was putting the onus to not only engage in ethics personally, but commanding to each leader that you are responsible for your fellow soldiers as well.

Finally, there is Secretary Mattis’ closing line I am proud to serve alongside you. Talk about a way to personalize yourself to your employees and to set the tone from the top. When was the last time you saw a Chief Executive Officer (CEO) or a Chief Compliance Officer (CCO) for that matter end a communication saying, “I am proud to work alongside you”?

How can a CCO or compliance practitioner use this document? Here I can only quote from Kelly’s blog post to say commit it to memory and “Try busting out language like that in your next meeting with the audit committee.” I would only add that you should bust it out anywhere else you have the chance. Thank you, Secretary Mattis.

 

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2017

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