Welcome to the Day 4 of the five-day podcast series Jay Rosen and I are producing in honor of the latest Star Wars movie The Last Jedi. Each day over this week, Jay and I will review a Star Wars movie and discuss it from the compliance perspective. Today, we consider Episode VII, The Force Awakens and disruption in compliance.

The full series schedule is:

Monday, December 18, Part I- IV-a New Hope and risk.

Tuesday, December 19, Part II- V-The Empire Strikes Back and due diligence.

Wednesday, December 20, Part III- VI-Return of the Jedi and effective training.

Thursday, December 21, Part IV- VII-The Force Awakens and disruptive innovation in compliance.

Friday, December 22, Part V-Rogue One and the myth of the rogue employee.

Today I consider the first ‘new’ Star Wars movie entry, Episode VII – The Force Awakens. I say it is a new Star Wars movie as it was the first one not created by LucasFilms, as George Lucas had sold his company to Disney, which produced the 2016 entry into the Star Wars oeuvre. It was directed by JJ Abrams and told the story of the Star Wars universe some 30 years after the destruction of the last Death Star.  It is this disruptive nature of the Star Wars franchise that I will focus on today as it relates to disruption innovation in compliance.

The film introduced several new characters: Rey, Finn and Poe Dameron, Kylo Ren and the First Order, a successor to the Galactic Empire. The film was largely one giant search for Luke Skywalker who had gone into isolation after his failure to re-establish the Jedi order. In addition to introducing the new characters, we are reunited with Han, Chewbacca and Princess Leia, who is now General Leia Organa. The First Order has developed new weapon, Starkiller, a deliciously worthy successor to the Death Star; the Rebel Alliance majorly disrupts the weapon and the First Order by destroying it, in the film’s climactic battle.

One of the key things the Department of Justice (DOJ) has communicated over the past few months is the importance of doing compliance rather than having a paper compliance program in place. In releasing the new Foreign Corrupt Practices Act (FCPA) Corporate Enforcement Policy, the DOJ emphasized the clear delineation of factors they will consider in determining if a company has an operationalized best practices compliance program in place in the context of a FCPA enforcement action. All of this has required disruptive innovation in compliance beyond the simple paper compliance program which until recently was seen as the norm.

Compliance is a process. Compliance programs should evolve as business risks change. Just as disruptive innovation tends to focus on process, your compliance program should focus on your overall business process to be successful.

Compliance 3.0 is very different from compliance programs of the past decade. Compliance is moving from a solutions shop where all compliance functions are centered in the legal or compliance department to a process function where the front-line business team can use technology and other tools to operationalize compliance. The 2017 Evaluation of Corporate Compliance Programs focused on how well a company operationalizes compliance into the business functions. The authors point to new business models as disruptive and I think this concept translates into how compliance can be burned into the DNA of an organization rather than simply sitting in the corporate office in the US.

Not all disruptive innovations succeed as disruption is only one step in both the creative and growth process. The key concept is what former SCCE President Roy Snell says are the three goals of any compliance program; to prevent, find and fix issues. This is how compliance differs from legal, whose job is to protect the company; from compliance whose mission is to monitor, obtain the data and then use the data as a feedback loop back into the company.

As many compliance practitioners are lawyers, we are naturally reticent to embrace such change, however I think the pronouncements of the DOJ throughout the year have made even clearer the need for continued evolution of anti-corruption compliance going forward. In The Force Awakens, there were numerous disruptions. We saw the death of one of the most beloved characters in the series, Han Solo, the growing awareness by Rey of her powers and the return of Luke Skywalker. It totally disrupted the First Order and destroyed its most lethal weapon.

Join us tomorrow where we consider Rogue One and the myth of the rogue employee.

May the podcast be with you this holiday season.

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