Welcome to Episode 9 of Compliance Man Goes Global podcast of FCPA Compliance Report International Edition. In this episode, we will focus on things, which actually could kill compliance in the organization. We will explore this matter in a plain language so to say and in the simple game form. Moreover, to make the podcast handy and more appealing we attach respective illustration from the Compliance Man illustrated series, created by Timur Khasanov-Batirov.

For those of our listeners who are not aware of our format, in each podcast, we take two typical concepts or more accurately misconceptions from an in-house compliance perspective. We check out if these concepts work in emerging jurisdictions. For each podcast, we divide roles with Timur, a practitioner who focuses on embedding compliance programs at high-risk markets. One of us will advocate the concept identifying pros. The second compliance man will provide arguments finding cons and trying to convince the audience that we face a pure myth. As a result, we hopefully will be able to come up with some practical solutions for in-house compliance practitioners.

Myth #1 Absence of support from top management could kill compliance as a concept in the organization. Tim, would you agree with this statement?

Tim Khasanov-Batirov: I think we should define whom we consider a top management and what we mean by support. If we start with a question of top management, I would think that there is no need to expect appreciation or kind attitude to compliance from everyone among senior management. It will never happen. You obviously want to have an understanding of what you have been doing among your company’s decision-makers. Still, it does not lead to full support for everything a compliance officer is proposing. I believe it is about values. If key stakeholders appreciate integrity and compliance that something which really matters for a compliance officer.

The second question is about support. Based on my practice there is no way to have daily support from everyone in the organization. If compliance person maintains good working relations with employees from different levels of corporate hierarchy, that makes operationalization of compliance program more effective. What is your opinion, Tom?

Tom:  A couple of things come to my mind, Tim: First and foremost, There are several key issues why top management support is more than simply critical, it is mandatory. It is senior management that sets the priority for a company and if they are not committed to compliance and ethics, everyone in the organization will understand it. I often provide the example of Regional VP who said the following: If I violate the Code of Conduct, I may or may not be caught; If I violate the Code of Conduct and am caught, I may or may not be disciplined; If I miss my numbers for two quarters I will be fired. If senior management focuses only on numbers, that will be communicated throughout the organization.

Yet another key issue I would like to touch upon is the question of trust. When a compliance officer is promoting a compliance initiative across the organization, they could be successful if employees embrace it. He has to demonstrate that they have been doing the right thing rather than just executing corporate compliance requirements. You can achieve this result if people trust you. If there is no trust neither senior management nor employees will support compliance. What must a compliance officer do to get trust? Just be risk-oriented, try to suggest ethical solutions to achieve business tasks, be open-minded, and feel interested in corporate processes. In other words, you must operationalize compliance to make it a part of the very DNA of your organization. You have to become a trustworthy partner in order to get the level of support required for effective execution of the corporate compliance program.

Myth #2. Bad corporate culture can kill Compliance in the organization. Tim, will you agree with this concept?

Tim: I agree that culture of non-compliance could kill the compliance idea in the organization. I believe that no matter if it is a big corporation or a small firm the culture starts from the CEO. There is always someone in the organization who is not a fan of compliance. It is fine unless CEO himself does not support ethics. In this case, you have no chance to survive. In our attached issue of the Compliance Man illustrated series, we have depicted challenges, which compliance professionals face. However, in my view issues like decrease of the department’s headcount or budget are something, which cannot stop compliance officer.

Tom: I believe that strong ethical culture is a key factor for building a solid compliance program. From a practical perspective, I think surveying personnel about their attitude towards integrity could give you a real picture of the state of culture in your organization. Another point to mention is the necessity to understand views of managers who due to their job responsibilities pose compliance risks, those in high-risk positions. This may be heads of construction or procurement teams as they interact with governmental officials. In an ideal scenario, they share your values or at least strictly follow respective compliance procedures. In the worst case, your efforts in embedding compliance program could be diminished by ignorance from actors which play a critical role in its effectiveness.

Thus, as key takeaways from today discussion, which is inspired by the famous Unstoppable video of Sia, I think we can mention the following:

  • A compliance officer should be ready to overcome difficulties at all stages of compliance program execution. The best way to do it is to obtain trust from key stakeholders, win minds and hearts for compliance and never give up. Just be unstoppable.

Tom Fox and Tim Khasanov-Batirov are here for you.

Join us for the next episode of Compliance Man Go Global episode of FCPA Compliance Report International Edition. Let’s bust more corporate compliance myths with us.

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