In this episode of Across the Board, I visit with Amii Barnard-Bahn.  She is a strategic advisor to Boards of Director and executive coach to many C-Suite members. She specializes in accelerating the success of C-Suite executives and partners with leaders and teams to help scale their business. She has shaped company culture and strategic initiatives as an executive at Fortune 20 companies, smaller businesses and nonprofits, leading multiple functions; including Human Resources, Legal, IT, Communications, and Compliance. Today’s topic is the ongoing turmoil at Tesla around its founder and CEO Elon Musk and his ‘funding secured’ tweet from the corporate governance perspective.

Some of the topics we discuss are:

  • What should be the role of the Board going forward?
  • What type of Board Chair is needed to make the Board truly independent?
  • Why a compliance professional needs to be named to the Board.
  • How does either (1) the Board or (2) the company get control over Musk’s personal twitter account?
  • Do his other actions: (1) long term lack of sleep; (2) smoking during a public appearance; (3) calling the lead rescuer for the Thai Boy Scouts a ‘pedo’ give rise to other concerns the Board should address?
  • Should Musk still have a Board seat?

 

 

Game 4 of the ALCS is in the books and the Astros had yet another hiccup on their march to back-to-back championships as Boston took the game on an unbelievable play to end it.  Even with this loss the Astros are still only three wins away from going back to the World Series. Yet our sports-themed week continues but from a more tangential angle today as we pay tribute to Morice Fredrick “Tex” Winter, one of the greatest basketball minds over the last 50 years. Winter’s greatest development was the Triangle Offense, which he convinced a nascent Coach Phil Jackson to use in Chicago. They then jointly convinced Michael Jordan to implement it on the court and the result was six National Basketball Association (NBA) championships. Jackson and Winters then headed off to the LA Lakers and convinced both Kobe and Shaq to use and the result there was another three NBA championships (Jackson and Kobe won two more after Winters retired and Shaq left LA). Winters and the Triangle inform Part II of why design thinking should be used to innovate in a compliance program.

In Winter’s New York Times (NYT) obituary, Phil Jackson said, “I wasn’t a very good coach and didn’t have a lot of knowledge, and he had a lot of knowledge. He’s like the mind of the basketball gods.” Michael Jordan said of Winter, “I learned so much from Coach Winter. He was a pioneer and a true student of the game of basketball. He was a tireless worker, always focused on details and preparation, and a great teacher.” The Triangle Offense focused on process and fundamentals, over playground moves and was a forerunner of the space and pace offense at Miami with LeBron James and the motion offense currently used by the Houston Rockets.

I thought about Winter and his passion for process in innovation in the context of the recent Harvard Business Review (HBR) article, entitled “Why Design Thinking Works”, by Jeanne Liedtka. Yesterday I began a consideration on why design thinking can be such a powerful tool to create a fully operationalized best practices compliance program. Today we consider some of the steps you should take in that process.

According to the Interactive Design Foundation, there are five stages in design thinking which they derive from the model proposed by the Hasso-Plattner Institute of Design at Stanford. It is the leading university when it comes to teaching Design Thinking. The five stages of Design Thinking, according to Hasso-Plattner Institute, are as follows: Empathise, Define, Ideate, Prototype, and Test. Liedtka notes that each step has “a clear output that the next activity converts to another output until the organization arrives at an implementable innovation.”

This change comes through the customer experience or the discovery process, which in the compliance world translates to the employee experience and is a key reason that design thinking is so successful. Liedtka identifies three areas. The first is immersion and this allows the designer to consider the project from the perspective of the end user. The key is to understand the user’s needs which may not be expressed and may also reflect the designer’s own biases. Further, in addition to data a designer may take into account, immersion “in the user experience provides raw material for deeper insights. In sense making, the designers take the most important data inputs and literally have all key stakeholders comment on it. This commenting takes the form of small notes or questions which can be put on Post-It notes. These notes are then aggregated, sorted into clusters and mined for insights. In the alignment prong, the synthesized information is then put into “possibilities” rather than constrained by the status quo. This allows truly innovative ideas and solutions not to be overtaken by “safe incremental ones.”

The next step is idea generation. It begins with the step of emergence where more participants work to build on the ideas generated from the final phase of employee discovery. It is not a negotiation of ideas and concepts of differences. The key here, as Liedtka notes, is that “Champions of change usually emerge from these kinds of conversations, which greatly improves the chances of a successful intervention.” The final step in this process Liedtka labels as Articulation. In it, take all of the ideas which have come through the process to this point and “question their implicit assumptions.” Liedtka believes that if these assumptions are not challenged, then the persons advocating the ideas will only do so from their perspective of “how the world works”.

Liedtka states that at the end of the idea generation process, “innovators will have a portfolio of well-thought-through, though possibly quite different, ideas. The assumptions underlying them will have been carefully vetted, and the conditions necessary for their success will be achievable. The ideas will also have the support of committed teams, who will be prepared to take on the responsibility of bringing them to market.” Liedtka labels the final step as the testing experience. It is not simply a confirmation of the design but rather “It’s about users’ iterative experiences with a work in progress”. In this phase, Liedtka identifies two components. The first is pre-experience and it is “creation of basic, low-cost artifacts that will capture the essential features of the proposed user experience. These are not literal prototypes—and they are often much rougher than the “minimum viable products” that” you can test with your employees. The next step is learning in action and these are real world experiments to not only test viability but to help reduce your employees fear of change.

Tomorrow I will have some concluding thoughts about the use of design thinking in compliance and hopefully report the Astros have started their three game run.

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

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a deep dive into the Benczkowski Memo and what it means for not only the monitor selection process but for compliance officers who may be in front of the Justice Department in a FCPA investigation.

Some of the highlights from this podcast are:

  1. Will there be corporate monitors going forward?
  2. Tom argues this memo sets out a road map for any company under FCPA investigation to avoid a monitor.
  3. Matt wonders if this memo will assuage mergers and acquisition liability for inadequate pre-acquisition due diligence.

We unpack of all these points and consider strategies going forward.

For more reading: see Matt’s piece New DOJ Policy on Corporate Monitors and see Tom’s blog posts Astros Heading to Back-to-Back as DOJ Announces New Monitor Policy and Back-to-Back (again): More on the Benczkowski Memo.

 

In the Episode, I visit with Eric Feldman, Senior Vice President at Affiliated Monitors, Inc.  Eric and I discuss some of your reflections, observations and highlights from the Converge18 conference with recently concluded in Denver. Some of the highlights include:

–The conference focused on the action piece of what compliance professionals need to accomplish.

–A key theme which literally began on the first keynote on the first day, from Patrick Quinlan, CEO of Convercent was organizational justice. Feldman believes that this is not enough discussed at compliance conferences as it serves as a foundation for credibility of senior leadership in an organization and helps drive a strong ethical culture throughout a company.

–Another interesting concept discussed by Feldman and myself was brand reputation and brand protection, another key theme at the conference. General Counsel and legal departments are tasked with brand protection but in this case of hyper-social media, that strategy may well lead to loss of brand reputation. A compliance professional should work to enhance brand reputation and move your brand forward, not simply circle the wagons.

For other reviews of Converge18 see Tom Fox’s blog post on the FCPA Compliance and Ethics Blog, Reflections on Converge18  and Matt Kelly’s blog post on Radical Compliance  Dispatches from Converge 2018.

The reigning World Series Champions, the Houston Astros storm into the ALCS with a sweep of Cleveland.  The team with the best record in baseball, the Boston Red Sox destroy the Yankees. The ALCS opens Saturday in Boston and comes to Houston Tuesday. Will the top podcasting duo in compliance survive? Also, Tom and Jay discuss and take a look at some of the week’s top compliance and ethics stories.

  1. What are the lessons from Styker and Petrobras about customers and the FCPA?. Tom explored in two blog separate blog series. Petrobras Part 1, Part 2 & Part 3. Stryker Part 1 and Part 2.
  2. It really is about the culture. Mike Volkov explains a new eBook, published by Corporate Compliance Insight. Available here and here.
  3. Where was she when Jay was selling shoes? Wife of ex-banker spends $21 million at Harrod’s. Dick Cassin reports in the FCPA Blog.
  4. Remember when kids with glasses were called ‘four-eyed’? Turns out having four eyes is a good thing. Jonathan Marks explains on Board and Fraud
  5. Use of internal investigations in government prosecutions just got tougher. Stewart Bishop reports in Law360 (sub req’d).
  6. Its sanctions week on the Risk and Compliance Journal (not really it just seems that way). Sam Rubenfeld reports on a Turkish firm and North Korea, Saudia Arabia and Magnitsky Act, a Lebanese businessman and Iran and a JPMorgan fine, Margot Patrick and Aruna Viswanatha report on the massive Standard Chartered. In a turnabout US says it will not sanction BP to operate gas field in North Sea owned by Iran, reported in the BBC online.
  7. Voice of America fires four employees for taking bribes in Africa. Harry Cassin reports in the FCPA Blog.
  8. Looking for the top training on how to operationalize your compliance program? Tom announces a new Compliance Master Class to be held in NYC November 12 & 13, hosted by Jonathan Marks and Baker Tilly. For agenda, more information and registration details click here.
  9. Want to attend a top compliance conference but have no travel budget? Navex Global has the answer for you with its virtual conference. Check out details and registration here.
  10. Tom premiers a new podcast series, The Opinion Release Papers which explore the FCPA Opinion Release Procedure. The first five episodes were released this week and are available on iTunes, Libsyn, JDSupra and this site. They were Opinion Releases 14-02, 14-01, 13-01, 12-02 and 12-01.
  11. Will you be attending the SCCE 2018 Compliance and Ethics Institute? If so let’s connect. Jay is hosting his annual Orphan’s Dinner on Saturday night if you are getting there early.
  12. The baseball playoffs (is there anything else?)

Sessions with AMI Personnel:

509 Decades to Build, Seconds to Destroy: Proactive Compliance On Your Own Terms to Avoid or Mitigate An Enforcement Action

Tuesday, 11:00 am – 12:00 pm

Eric Feldman, Senior VP and Managing Director, Corporate Ethics and Compliance Programs, Affiliated Monitors and Thomas Topolski, Executive Vice President, Turner & Townsend

–– Learn how proactive assessment and remediation

measures are less costly and more effective than more

potentially restrictive compliance responses.

–– Determine how company actions prior to, during, and

after an ethical crisis can help determine the severity of

fines, penalties and required remediation.

–– Explore the value of “proactive monitoring” to help

strengthen organizational culture, identify and manage

potential vulnerabilities, and establish credibility

AD11 Secrets from In-house Ethics & Compliance Buyers: How to Keep the Gate and Your Sanity

Tuesday, 1:00 –2:00 pm

Jay Rosen, VP, Business Development and Monitoring

Specialist, Affiliated Monitors, Inc.

– Learn how to manage your vendor relationships to maximize their value proposition and minimize persistent and time consuming sales pitches.

– Vendors believe they can make a buyer’s life easier, but they must listen for “buying or non-buying” cues and modulate their contact proportionately.

– While SCCE believes that tomorrow’s solutions for today’s E&C issues will come from the vendor community, in-house clients respond to authentic vendor relationships as they can easily separate salesy features from those colleagues who really care.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.