In this special five-part podcast series, I am joined by Mikhail Reider-Gordon, Managing Director of Global Affairs at Affiliated Monitors, Inc. (AMI) the sponsor of this podcast series. In this series we discuss various aspects of monitorships, including why independence matters, the American Bar Association’s (ABA) Guidelines on Monitors, Gordon’s professorial career at the International Anti-Corruption Academy, cultural differences between international and US domestic monitorships and the continuing evolution in monitorships. In Part 4, we consider the cultural differences between international and US domestic monitorships.
As recently as last month, there was an international enforcement action, involving the US and Brazil where a monitor was required. This is but the latest example of not only international cooperation investigations, but international cooperation in enforcement actions. How do cultural differences and legal process differences affect the structures of monitorships, for individuals or entities and how do we begin to think through that issue?
Gordon noted that when structuring a monitorship of an entity or an individual, it can be an unknown. Some of the issues include how to approach and interact with all the stakeholders and how that is organized, as monitorships are heavily impacted by cultural considerations. Gordon stated, “I’ve lived in, worked in numerous countries and I can tell you that those legal processes, there are absolutely important cultural differences that have to be built in. For instance, I’ll take an example here in the US there really is not the same expectation that a corporation will take care of its employees beyond what is required under labor and employment law and safety laws. Yet in many other countries, employers may develop deep personal relationships with employees, really on a level that you and I might associate with familial relationships.” Obviously, this has impacts for monitorships with an international component.
Additionally, there may be separate monitorships from different sets of prosecutors. For instance, the Odebrecht corruption case mandated a US and Brazilian monitor. Gordon said that in such a situation, “as a monitor, we are appointed to help the organization remediate and approve. We need that buy-in, all the stakeholders.” Equally importantly, when a US based monitor is in other countries, considerations of cultural sensitivities, norms, values, are part and parcel of the design of the monitoring program. There can be “cultural values such as maintaining harmony within the organization, change how we approach interviews, dialogue with employees and managers, building consensus and so on. This can extend to seemingly basic monitoring elements such as asking and receiving questions. It can also be around how poor decisions can even be challenged within the company as in many cultures, they do not embrace challenging management even when employees know that what the managers are doing are violating the law.” All of these factors must be taken into consideration.
Another area, seemingly basic to the US corporate culture, is constructive criticism. Gordon said, “in another culture, we may need to deliver what would be deemed criticism is being deeply unpleasant. We may have to take that to a very private setting where no one else is going to witness it.” In the area of improvement suggestions, we will “not necessarily make those to a team where blame might be a portion to one individual without causing some damage. You have to be cognizant of that.” Another area which can present challenges is labor and employment laws around termination and whistleblowing. This is another area where it is “helpful for a monitor to have local understanding, local knowledge regarding what’s allowed under local law.” This often leads to the appointment of a monitor who does not need a long ramp up period because they are already familiar with these other cultural expectations and mores.
We concluded with Gordon’s thoughts on a US-based monitor working with foreign regulators. She said, “I think something that’s very important to remember. I think in some jurisdictions monitors are seen as the US waving a big stick and not taking into consideration local impacts”. Gordon believes that perception has shifted in the more recent years, but that a monitor must still be cognizant of the perception. A monitor must have an understanding around expectations and also help foreign regulators to understand “the monitor’s role, what we do, our independence and, and keep the dialogue open.” With such an approach, it can “help to give confidence to everyone, not just the regulators.”
I hope you will join us for our concluding episode 5, where we discuss the ever-evolving types of situations requiring a monitor.