Today I begin a new podcast series with recovering screenwriter, Jay Rosen. The Podcast series is entitled Popcorn and Compliance-at the Movies with Tom and Jay. In this new offering from the Compliance Podcast Network, Jay and I will consider compliance, business, leadership and life lessons from the movies. We will look at both contemporary and classic movies. We will begin with one of our favorite series, Star Wars.
We begin with Episode IV – A New Hope. One of the plotlines is that the Galactic Empire has created a Death Star with enough firepower to destroy a planet. The Rebel Alliance is determined to destroy the Death Star and has blueprints detailing the defensive posture of the Death Star. A computer analysis determines a weakness in the Death Star’s defensive shield. At one point, the Death Star’s commander, Grand Moff Tarkin, played by Peter Cushing, is told there is a ‘risk’ in the Rebel’s plan of attack. Tarkin dismisses this risk as insignificant. Of course, Luke Skywalker then proceeds to exploit this risk and destroy the Death Star.
Tarkin’s incorrect assessment of this risk was lethal. It informs how you evaluate compliance risk under the FCPA or an economic sanctions regime. Failure to appreciate risk can lead to some very serious and perhaps lethal consequences.
Whether you utilize one approach or another, analyzing the results of your risk assessment is as important as doing the risk assessment. With the recent Department of Justice (DOJ) remarks around how they will review the effectiveness of compliance programs during an enforcement action to determine potential credit or even granting a declination, the stakes have never been higher. Of course, for Grand Moff Tarkin, his refusal to analyze the risk assessment presented to him was fatal.
What does the geographic area you conduct business in mean for your company’s risk? This is beyond the Transparency International-Corruption Perceptions Index (TI-CPI) for payments to corrupt local officials, although that could certainly come into play. What if you have to make payments to criminals to secure your supply chain and the safe movement of your employees. What is the liability for a company which puts its employees in such a high-risk environment?
If you do not ask those questions and then pay attention to the answers, you may find yourself in the same position as Grand Moff Tarkin.