I recently had the opportunity to visit with Don Stern, Managing Director, Corporate Monitors and Consulting Services at Affiliated Monitors, Inc. (AMI) for a five-part podcast series on working with monitors. (AMI is the sponsor of the series) The series will post on my social media platforms, including this site, Libsyn, JDSupra and iTunes next week. I know it is a series you will not want to miss. In Episode II of the podcast series, we discuss the positive impact using a monitor can have on an organization. I wanted to give a preview to this most interesting podcast series and highlight a key reason to work with monitors in this blog post.

Interestingly many of the benefits of a company in working with a monitor come from answering the employees fears and concerns. Many employees are intimidated by attorneys and some even feel guilty about themselves and their work even though they have done nothing wrong. Often employees do not feel like they can trust the company, particularly if the company does not employ the Fair Process Doctrine or institutional justice as a core value of the organization. Other employees feel validated and when they can open up to outsiders, it can be a cathartic experience for employees. For the larger organization, the monitor can tell the company what it does not know and provide a much needed “Big Picture” impact; delivering insight on how the company can be run more efficiently and profitably. The bottom line is that the benefits in using an independent monitor can be as behavioral and psychological as compliance and legal.

Stern described the impact of working with a monitor is present at several different levels. The first is a very personal, at the employee level. He said, “I’ve seen this time and time again when we will sit with either an individual employee at different levels, it could be at a lower level, it could be at the CEO [Chief Compliance Officer] level. The employee will feel validated and in some ways innocent. It sounds odd to say that because you would think that if the company was working properly that each employee would have an opportunity to sort of say their piece,  describe observations and things that they were experienced. Unfortunately, that is not the way the real world works when people have concerns and fears of retaliation and the like.”

Stern has found after doing an interview or a focus group, they will sometimes say, “I have been wanting to say these things to somebody and I hope that, this is not attributed this to me. I’m not looking for you to go back to anybody and say that “I said this, but I hope that you will take what I have said and what others have said and make some suggestions to the company.”” The bottom line is that a key impact from working with a monitor is that the monitor listens and “I do think that employees feel better kind of explaining their perspective on what’s happening internally in the company.”

Another important reason all of this works is if an organization uses a truly independent monitor. This means one which is not the lawyer for the firm or with the company’s regular outside counsel. This is something most employees more fully appreciate, as talking to “outsiders who  coming in, who they do not interact with on a day to day basis.” Even if the monitorship is required under an enforcement action and in the in the context of a government settlement, Stern has found that if the monitor makes it clear they are independent from the government, employees are more likely to not only open up but also appreciate the experience.

These concepts tie directly into the Fair Process Doctrine, which most generally holds that if the process is fair, people are more likely to accept undesired outcomes. An independent monitor, who does not perform ongoing work with the company, will certainly be perceived as more fair. As Stern noted, “it’s just human nature.”

This independent nature also gives the monitor the ability to impact the company by helping it turn the page on any conduct which may have gotten it into trouble in the first place. This is particularly true where a company has gone through an enforcement action and resolved the matter with the government and is now ready to move on in a positive way. Stern said that employees typically want to feel good about the organization they work for, they want to be proud of who they work for. Stern said, “time and time again, people aspire to work for a company that they feel good about. They want to tell their spouse, they want to tell their children. They want to feel good. When the neighbors asked them, who do they work for and when companies get into trouble, they liked the fact that the page is being turned and that once again, that can be very proud of where they work.”

This independence from the government also works to positively impact the work of a monitor. Stern noted that although an independent monitor has “an obligation to report to the government faithfully as to what we are seeing; the good, bad and the ugly; an independent monitor is not beholding to the government.” Stern’s experience has been “at the end of the day they respect us, and they recognize that it’s in their interest for us to be independent. If we’re in the company’s pocket and we do whatever the company wants at the end of the day, the government will see right through that and it’s not going to be a good outcome.”

The bottom line is that the positive impacts of working with a monitor can happen on many levels. Obviously for a company which has recently concluded an enforcement action, a monitor can yield many benefits to improve a compliance program. Yet some of the greatest benefits may be more behavioral and psychological to the company’s employees. Not only can talking to a truly independent outsider be cathartic for employees but the entire process can help to reinstill a sense of pride in who they are, who they work for and what the organization means.

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, 2018