I have been taking online classes this year from MasterClass, beginning with writers. There are classes taught by actors, directors, historians and business leaders. I have made it through James Patterson, Malcolm Gladwell, David Baldacci, Doris Kerns Goodwin and Bob Iger. Now I am on to Ron Howard and directing. It is a great way to hear from some of the top practitioners of their craft in a very intimate and entertaining format. I highly recommend this streaming service. I am greatly looking forward to learning from this site over the rest of the year. Over the next week, I will write about lessons from these online classes which can inform your compliance program, the Chief Compliance Officer (CCO) and the compliance profession. Today I want to begin with a concept set out by Howard in his directing class: do you set the light or work with it?

Howard said that when shooting money on a large budget with interior sets, a director may have the luxury to set the lighting for each and every scene. Setting the lighting may also be a luxury on exterior shots unless you have the budget for it. However, Howard noted that in Europe and most typically in documentaries, the director may not have the budget to create the specific lighting and the luxury to wait and make sure that Mother Nature cooperates. This means that the cinematographer has to work with the light provided.

This is a great metaphor for how a CCO might consider working and, more specifically, with a corporate compliance program. When I started in compliance, it was all lawyer-driven; Codes of Conduct, policies and procedures were all written by lawyers, for lawyers. These documents were designed to lay out the “thou shall nots” for the businessperson. This is classic design of a what is now recognized as a paper compliance program, most particularly wanted by those who desire to append a compliance defense to the Foreign Corrupt Practices Act (FCPA).

Howard articulated the principal of working with light means that the director may have to adjust the angle of the shot, the placement of the actors or in some other way deviate from what was originally planned. This informs your compliance program because it demonstrates what you might be able to do if you work with your business units to create a more effective compliance program. This is a key insight from design thinking as well.

This concept is one that any CCO can use in redesigning a compliance program. Your employees and third parties have a user experience in doing compliance that may be complex and interactive. You need to design a compliance infrastructure to the way people work so that doing compliance becomes burned into the DNA of a workforce. You should start with focusing on your users’ experience with compliance. For the compliance function, this could be centered on the touch points employees have with the compliance function and design around the users’ needs rather than simply lay out policies and procedures with no thought to how it might work in the field.

The next step is to develop examples to explore potential compliance resolutions. In other words, build a part of your system and test it from the users’ perspective. The example that Howard used in this chapter of his MasterClass was to change how you might shoot the actors based upon the real lighting conditions at the time of the shot.

While it may initially sound antithetical to the CCO or compliance practitioner, a key component for design thinking is a tolerance for failure. I realize that initially it may appear you cannot have failure in your compliance program but when you consider that design thinking is an iterative process it becomes more palatable. Just as a cinematographer might gage the outdoor lighting and the director might revise something as basic as actor positions, a CCO can use this process to have very focused decisions about what processes should and should not do. This means that if a compliance process is too complicated or requires too many steps for the business unit employee to successfully navigate, you may need to pull it back for refinement.

There are some challenges for a CCO to take this approach. First is that there must be a willingness to accept more ambiguity, particularly in the immediate expectation, for a monetary return on investment (ROI). A more functional compliance design may not immediately yield cost savings but it may be baked into the overall compliance experience. Second, a company must be willing to embrace the risk that comes from transformation. There is no way to guarantee the outcome so company leaders need to be willing to allow the compliance function to take some chances in directions not previously gone. Third is the resetting of expectations as design does not solve problems but rather unlocks intricate processes to deliver a better overall compliance experience. This in turn will make the company a better-run organization.

By using the lighting rather than simply staging the lighting, you can use design thinking to improve your compliance regime by building from the ground up rather than a legalistic top-down approach favored by most lawyers. It is not that a CCO is giving up control of compliance processes but by working with the lighting rather than staging it, you work with your employees, not simply a problem.

It may be some time before international business and compliance ever return to life the way it was before coronavirus. We may well be doing business very differently for some time going forward. It is not simply the role of a CCO to follow this trend. Compliance professionals need to get ahead of this curve and you need to be thinking about how you can deliver a best practices compliance solution in a different way now. I hope you will join me over this week to consider some different ways to think about your compliance program for the new world we are inhabiting.

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, 2020

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