7K0A0246A couple of weeks ago, I had a guest post from Maurice Gilbert, the Managing Partner at Conselium Partners LP entitled “Why is it so hard to hire compliance practitioners?. There were many questions posed to me based upon Gilbert’s guest post. This led me to propose to Gilbert a series of podcasts, which would lead to a five-blog post series around hiring in the compliance space. As one of the nation’s top search firm’s for C-Suite and Compliance executives, Gilbert was well-suited to answer a long list of questions that I have often wondered about with regard to hiring for compliance; from both the corporate and candidate perspective.

So today I will begin a five-part series based upon my interviews with Gilbert. If you are interested in listening to the full podcast series, which goes into much more detail, I will be releasing these over the next three Tuesdays on my new site fcpacompliancereport.com and my YouTube channel – FCPA Compliance and Ethics. The podcasts are also available on iTunes under the FCPA Compliance and Ethics Report. Today, I will focus on Gilbert’s thoughts from the hirer or company perspective going into the process.

Gilbert believes that it behooves any company to find the right Chief Compliance Officer (CCO) or compliance practitioner for the right position. But to do so, a company needs to fully understand and appreciate what it needs from such a position going forward. Unfortunately, many companies do not have this insight at the beginning of the recruitment process. The process often begins with the company supplied job description, which Gilbert noted is “typically a legacy of various things that are not even updated. It’s a hodgepodge of things that maybe began a few years ago, but it needs to be updated to reflect what’s going on in the company at that particular moment. You have certain business risks. You have certain regulatory risks…. You need to be attentive to those risks so that you could build your profile about what those risks need to be addressed presently.” Moreover, “what you’re going to get in a company job description is just a litany of things that actually could be quite disjointed and may not necessarily make sense for what you’re going to be asking the person to do.”

Gilbert will bring the key company stakeholders into an initial meeting to help them understand the process. Obviously this will include Human Resources (HR) and others involved in the internal hiring process for the company. Gilbert gets them to rethink their approach to focus on what they will ask the new hire to accomplish because typically there is a disconnect between what the company thinks it needs and what it really needs.

The next step is developing an appropriate job profile. Gilbert will ask the key stakeholders to give him a list of four things they would like the new hire to accomplish in the first year of employment. By limiting to this to four, Gilbert not only ends unrealistic expectations but helps winnow down the inevitable “laundry list of, “We’d like the professional to accomplish 30 things within the first year.” Many of which, are inconceivable. They have to be done in the course of several years. When we’re listening to the response, we, again, are counseling our client as to whether that makes sense or if that’s an unreasonable, let’s say, expectation.”

Gilbert gave an example of a recent search he headed for a client. One of the things he was able to develop at this initial meeting was that the company wanted the CCO “to spend the first two, three months evaluating her staff, to see if she has the appropriate team in place for the rest of the journey. By the way, she’s traveling all over the world doing just that. Evaluating her staff.” However that task alone could take several months. The company also wanted the CCO to perform a comprehensive risk assessment forthwith as well. It is simply not realistic to expect such disparate and time consuming tasks to be performed so quickly, all the while the new CCO would be expected to travel to company locations across the globe.

Another important issue in this initial meeting is the professional growth opportunities that the company will present to any candidate. Gilbert explained that this is something companies do not always appreciate in the hiring process. Yet, as he explained, a company is trying to get a seasoned executive to leave a position so they need to have an attractive package ready to present. It is more than simply salary and benefits. Gilbert said, “we have to capture data such as, “What are career growth options once a person steps in and does a good job for three, whatever, years?” We have to capture data. “What is the culture of the company? What is the culture of the compliance department? What are the hot buttons and the management strategy, if you will, of the hiring authority? How does that person like to interface with the individuals?”

A final query to the company is around the sourcing of candidates. Gilbert needs to know if there are any particular competitors, or companies, which the client feels are hands off for sourcing candidates from and before he leaves this meeting he needs to know the companies that his client does not want Conselium to recruit from.

I found these points quite illuminating for several reasons. First, the company was not clear on what it wanted the new CCO to accomplish and had not thought through what it would need to commit to in terms of resources to have these goals accomplished. The second demonstrated the communications flow facilitated learning on the part of both parties, i.e. for the client this was to have a realistic expectation of the new role and for Gilbert it was to help develop an appropriate Job Profile. It also demonstrated the collaborative nature of the relationship. By engaging in this process Gilbert is able to move from simply a third party executive search firm to a trusted advisor to the client. By having such a relationship Gilbert and his company, Conselium, are able to deliver a much more focused and valuable service beyond the typical generalist experience available inside a corporation in the hiring process.

From these discussions, Gilbert will develop a Job Profile and present to the company to have them sign off on not only the package of what they are looking for in a candidate, but also the package they will be willing to present. Gilbert related that through the capture of and agreement with these points, he is ready to begin the next step, which is to tell the compelling story about the job position on behalf of his client. Tomorrow I will take a look at candidate sourcing.

Maurice Gilbert may be reached via email at maurice@conselium.com.

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, 2015

DawkinsDaryl Dawkins died yesterday. To anyone who followed the National Basketball League (NBA); Dawkins will always be remembered with the brilliant Stevie Wonder-derived moniker – Chocolate Thunder. I will also remember him for three things. First he was one of the very rare high school stars who went straight to the NBA with no college stop and was successful. The second was when he squared off to fight Maurice Lucas of the Portland Trailblazers during the 1977 NBA finals. Let’s just say Dawkins slaps at Lucas did not come close to hitting their mark. Number 3 was his thundering dunks, particularly one in a game against the Kansas City Kings at Kemper Arena on November 11, 1979, Dawkins threw down such a massive dunk that the backboard shattered. Then three weeks later he did it again.

As noted Dawkins was one of a very few high schoolers to NBAers who did even passably well. His contemporary Bill (Pugh) Willoughby had some success with Atlanta and, of course, Moses Malone had a Hall of Fame career, later taking those now Dawkins-less Philadelphia 76ers to the NBA promised land in 1983. I thought about Dawkins and his lack of college seasoning while reading the absolutely disgusting story of Art Briles, the University of Baylor, its football team and the saga of Sam Ukwuachu.

Jessica Luther and Dan Solomon have been following this sorry spectacle. In an article in Texas Monthly, entitled “Silence at Baylor”, they wrote, “That Ukwuachu transferred to Baylor in May 2013 because he had been kicked off the Boise State team for a previous incident of violence involving a female student; that Ukwuachu claimed after the transfer was announced that Baylor’s coaches “knew everything” about what happened in Idaho; and, as indicated by court documents obtained by Texas Monthly, the two programs had some communication regarding Ukwuachu in which Boise State officials expressed reticence about supporting the player’s efforts to get back on the field.”

Art Briles, the Baylor head football coach, claimed that he was never informed from anyone at Boise State about Ukwuachu’s prior incident, even implying they had covered it up. Yet Chris Petersen, then head coach at Boise State and now head coach at the University of Washington, said he had fully disclosed to Briles the details about Ukwuachu. Petersen said in a statement, ““After Sam Ukwuachu was dismissed from the Boise State football program and expressed an interest in transferring to Baylor, I initiated a call with coach Art Briles,” Petersen said. “In that conversation, I thoroughly apprised Coach Briles of the circumstances surrounding Sam’s disciplinary record and dismissal.” It is known that Boise State did not support any waiver that would have allowed Ukwuachu to play immediately for Baylor upon his transfer. In the fall of 2014 Ukwuachu sexually assaulted a female soccer player. Ukwuachu was indicted and convicted this month of second-degree sexual assault. His sentence – 180 days in jail and 10 years probation.

Briles and Baylor have claimed they are really the aggrieved party here because if Coach Petersen or anyone at Boise State had told them that Ukwuachu had been disciplined or dismissed from the Boise State team for sexual assault they would never have given him a full scholarship to Baylor. This means Briles and Baylor would have simply ignored the football facts that Ukwuachu was a Freshman All-American and highly recruited high school athlete. Indeed in early June of this year, Baylor defensive coordinator Phil Bennett said at a luncheon in Fort Worth for the Baylor Sports Network, that he expected Ukwuachu to play this year. This was in the face of a trial scheduled to begin some two months later.

All of this was overlaid by a university which, if not trying to suppress all this news about Ukwuachu, certainly did nothing to alert its student body that a scholarship athlete was on trial for sexual assault. Moreover, according to Luther and Solomon in Texas Monthly, “Meanwhile, the details about the investigation conducted by Baylor that came out during the trial reveal one that was shockingly brief: It involved reading text messages, looking at a polygraph test Ukwuachu had independently commissioned – which is rarely admissible in court – and contacting Ukwuachu, Doe, and one witness on behalf of each of them.”

I thought about all this sorry state of affairs at Baylor in the context of the Foreign Corrupt Practices Act (FCPA) and anti-corruption compliance programs. There is a clear reason why the responsibility should be on any company which wants to employ a third party to act on its behalf to do thorough due diligence on that agent. If this was not the situation, companies would make claims similar to those made by Baylor Coach Briles that “no one told me about Ukwuachu.” If Briles had accepted his responsibility for bringing a player into the university and onto his team, he might have understood the importance of knowing who you are dealing with going forward.

It is incumbent that a company evaluates and addresses its risks regarding third parties. This means that an appropriate level of due diligence may vary depending on the risks arising from the particular relationship. So, for example, the appropriate level of due diligence required by a company when contracting for the performance of Information Technology (IT) services may be low, to reflect low risks of bribery on its behalf. Conversely, a business entering into the international energy market and selecting an intermediary to assist in establishing a business in such markets will typically require a much higher level of due diligence to mitigate the risks of bribery on its behalf.

Our British compliance cousins of course are subject to the UK Bribery Act. In its Six Principles of an Adequate Procedures compliance program, the UK Ministry of Justice (MOJ) stated, “The commercial organisation applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organisation, in order to mitigate identified bribery risks.” The purpose of this principle is to encourage businesses to put in place due diligence procedures that adequately inform the application of proportionate measures designed to prevent persons associated with a company from bribing on their behalf. The MOJ recognized that due diligence procedures act both as a procedure for anti-bribery risk assessment and as a risk mitigation technique. The MOJ said that due diligence is so important that “the role of due diligence in bribery risk mitigation justifies its inclusion here as a Principle in its own right.”

The onus put on companies too not only do compliance but to ‘Document, Document, and Document’ that effort provides the incentive needed to comply with the law. If there was not such an incentive, you have would have corporations crying out now like Baylor Coach Briles that it was the responsibility of the school and team which dismissed him to alert them about Ukwuachu’s past misdeeds. Fortunately for FCPA compliance and the greater anti-corruption compliance community, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) do not see things in such a light.

As to Chocolate Thunder, at one point in his career Dawkins said that he was an alien from the Planet Lovetron. Alien or human, I hope you will join me in wishing a smooth trip to the great hereafter to one of the NBA’s most unique characters.

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, 2015

HeroSometimes a hero can make a difference. But you do not have to be a John Wayne type-hero to make such a difference. The reason is the world is made up of real people and John Wayne heroes only exist in the movies. Even in the international fight against bribery and corruption, the stand of one person can make a difference. It could be as simple as saying “I am not going to pay bribes.” Yesterday I read two articles in the New York Times (NYT) which illustrate how regular people and their non-Hollywood regular actions can make a difference in the fight against corruption.

Earlier this week, a true hero died near Brussels. According to her NYT Obituary, Augusta Chiwy was a “Belgian nurse whose unsung bravery in saving countless American soldiers wounded in the Battle of the Bulge was belatedly celebrated in 2011.” A British historian named Martin King had found the amazing story of a Belgian immigrant, who was visiting her family in Bastogne when the Germans attacked in December 1944, an Army doctor named John Prior, “knocked on the door of her father’s house. “He told me that he had no one left, that his ambulance driver had been killed,” she recalled. She volunteered, along with a friend, Renee Lemaire, even trading her bloodstained clothes for an Army uniform, which would have subjected her to death if she were captured.”

Yet through her efforts, along with those of her friend Ms. Lemaire and those of Dr. Prior who all working on triage during the entire siege, “Men lived and families were reunited due to your efforts,” said Col. Joseph McGee, who commanded a brigade of the 101st Airborne Division at Fort Campbell, Ky., the unit whose paratroopers were surrounded during the fierce midwinter siege.” Dr. Prior noted, in a 1972 article for The Onondaga County Medical Society Bulletin, “The presence of these two girls was a morale factor of the highest order.” Chiwy’s only comment was “What I did was very normal. I would have done it for anyone. We are all children of God.” Heroism indeed.

Yet there is another kind of heroism also portrayed in yesterday’s NYT. It was the heroism of the citizens of Guatemala as detailed in an article by Azam Ahmed, entitled “Guatemala’s Corruption Investigations Make Swift Strides”. The heroism was demonstrated by “Jorge Castiglione, a 70-year-old engineer with a thinning ponytail, has gone to the Plaza de la Constitución here to support what has become a ritual in this nation: weekly protests calling for the resignation of the president and an end to political impunity.”

For while no one, certainly not the citizens of the country, thought that they could see the possible end of corruption, a small step was taken in the name of anti-corruption last week when an investigation extended to the top levels of the country’s government. Ahmed reported, “On Friday, the nation’s former vice president was arrested, and prosecutors claimed that the president, Otto Pérez Molina, was the chief beneficiary of a fraud ring that siphoned millions of dollars in customs revenues while basic public services suffered.”

Most interestingly the investigation began over a case which, under US law, might well have fallen within the rubric of facilitation payments under the Foreign Corrupt Practices Act (FCPA). Ahmed said, “The initial case, known as La Línea, involved customs stations across the country taking bribes from importers to reduce the amount of duties paid. More than 20 top officials were arrested in a scheme that prosecutors said drew in a quarter of a million dollars a week, the same scheme they accuse Mr. Pérez Molina of leading.” However that was only the beginning of the rotten leaves unturned in the investigation. Ahmed wrote, “another scandal emerged. This time, the authorities were accused of skimming millions off a contract meant to provide dialysis treatment for patients with kidney problems, among other things. Local papers reported that more than 13 patients died as a result of negligent treatment, connecting the corruption to actual lives.”

There are many in the US, from The Donald on down, who seem to think that corruption is simply a part of the way those people do business. The problem with that analysis is at least twofold. First it does not even consider the invidious nature of corruption. This view holds that it is really just a victimless crime or better yet, simply another way to get ahead – cheat your way to the top. Or the converse, only losers don’t pay bribes to get favors in return. The second problem is that if US companies buy into such logic, they not only feed the narrative but become part of the problem as well. Just think of the Lockheed and other US corporate corruption scandals that led to the original passage of the FCPA.

Nonetheless for US companies these developments in Guatemala should serve as a very large wake-up call for their Central and South American operations, if, indeed, they needed one. Obviously Petrobras is on everyone’s mind now as the world’s current top poster child for bribery and corruption. For US companies, this means that their Brazilian operations could come into Department of Justice (DOJ) and Securities and Exchange Commission (SEC) scrutiny. The increased in anti-corruption scrutiny has moved part and parcel with increased political activism by citizens such as Jorge Castiglione in Guatemala. Ahmed noted, “A wave of political activism has emerged in Brazil, Chile, Ecuador, Honduras and Peru. Feeding the swell of discontent, experts say, is a growing middle class with greater expectations.” It is also clear that corruption is a large problem in many of these countries as well.

This confluence of factors that were present in Guatemala; the newly aggressive anti-corruption investigations coupled with the increase in political protests mirror those which occurred in Brazil over the past couple of years and may become more prevalent in other countries in the region. US companies need to understand that many of these most ardent anti-corruption prosecutors and investigators have had legal or other training the US. Further, the DOJ has for a number of years been training prosecutors in other countries on techniques to investigate and combat corruption. Once again witness the well-known Brazilian prosecutors from Operation Car Wash; they had US legal training. It would not be surprising at all if they are sharing their information with the relevant US authorities.

Of course, US companies could take the direct route and simply not pay bribes and not violate the FCPA. But doing compliance takes a corporate will, requiring commitment and work. If you do not have such commitment, you may find yourself in FCPA hot water in areas of the world waking up to the fact that they can actually fight bribery and corruption. Sometimes it only takes a hero to make the difference.

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, 2015

Mini CooperThe price of oil hovers near $40 per barrel. There are all manner of responses suggested to this drop from nearly $100 per barrel just a short time ago. Yet the price of oil has long been much more than a political conversation, sometimes it leads to innovation. Today we celebrate the birth of the British Motor Corporation’s (BMC) newest car, with the launch of the small and affordable – at a price tag of less than $800 – Mark I Mini. The diminutive Mini went on to become one of the best-selling British cars in history.

Yet it was an energy crisis that led to the development of the Mini. The story behind the Mini began in August 1956, when President Gamal Abdel Nasser of Egypt nationalized the Suez Canal in response to the American and British decision to withdraw funding for a new dam’s construction due to Egypt’s Communist ties. The international crisis that followed led to fuel shortages and gasoline rationing across Europe. Sir Leonard Lord, head of BMC, wanted to produce a British alternative to the tiny, fuel-efficient German cars that were cornering the market after the Suez Crisis. His response was released on this date in 1959 and it has remained a British classic to this day.

I thought about Lord’s thoughtful response to a political and energy crisis when I read this week’s Corner Office column in the Sunday New York Times (NYT), where reporter Adam Bryant profiled Mark Toro, Managing Partner and Chairman of North American Properties – Atlanta Ltd., in an article entitled “Who Will Do What by When?. Toro had some interesting observations, which I thought would be useful for the Chief Compliance Officer (CCO) and compliance practitioner in working towards a best practices compliance program.

One of the more prescient concepts from Toro was one passed on from his father who was a mechanical engineer. Bryant wrote, “My father had another great saying: “You worry about the wrong things.” It was kind of his version of “Don’t sweat the small stuff.” There are very important things in life, so let’s spend our time on things that are relevant and consequential to the mission, whatever your mission is, as opposed to all the other noise that’s out there, because there’s lots of noise.” As a CCO or compliance practitioner you need to understand not only what is important in terms of resource allocation but also from an anti-corruption risk perspective for your organization.

Equally insightful was an early business lesson on leadership. Once in a moment of machismo, Toro literally pounded a meeting table with his fists to emphasize a point. When the person who was the subject of the tirade left the meeting, Toro said, “my boss looked at me and said, “You didn’t see it, did you?” I said, “What?” He said, “About five minutes into your tirade, he sat back and he was done listening to you.” Toro found this to be an “early lesson in self-awareness and how you impact others. It was not easy to develop, but I worked on it.”

Toro is a very results driven leader. Yet it is not the maniacal devotion to data analytics that he rewards. He believes in allowing his employees to commit to something and then follow through with the commitment. Toro said, “There are only two types of people in the world: people who do what they say they’re going to do when they say they’re going to do it, and people who don’t do what they say they’re going to do when they say they’re going to do it.” The key is that you ask for a commitment to do something, complete a task or an assignment and then there is accountability for that person.

Interestingly Toro suggests that being a creator is a way to get ahead in business. When asked about what he would tell college graduates, one of the things that will set you apart is to create. He stated, “Whether you’re a writer, a painter, a real estate developer, create something from whole cloth and do not be an intermediary. If you create value, you will be rewarded well beyond anything you could do from being in a middleman role, which makes you beholden to those who truly create the value.”

However it does not end at that point. Baker Hughes CCO Jay Martin has said that the difference in mediocre and great is in the execution. Toro obviously agrees when he said, “The process of conception, planning and execution is also hard for most people. And it’s the last part where people typically have trouble, because execution is about doing what you say you’re going to do.” Finally, he noted a key component of any CCO or compliance practitioner position, to manage compliance projects. Any program, policy or procedure implementation or enhancement is a project. It will require conception, planning and execution. Toro observes, “My perspective now is that everybody’s a project manager, no matter what business you’re in, and everybody’s a salesman. The people who can marry those two skill sets will always have an edge.”

Toro’s perspectives and the British Mini are lessons in project management including conception, planning and execution. The development of the Mini began in 1957 and took place under a veil of secrecy; the project was known only as ADO 15. After about two and a half years, a relatively short design period, the new car was ready for the approval of Lord, who immediately signed off on its production. The Mini Cooper followed a few years later, engineered by the racecar builder John Cooper, which became a favorite of Mini enthusiasts worldwide.

How iconic is the Mini? By the year 2000, 5.3 million Minis had been produced. Around that same time, a panel of 130 international journalists voted the Mini “European Car of the Century.” An interesting outcome to an energy issue from the 1950s.

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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, 2015