Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley. In this Episode 50, Mary Shirley and Lisa Fine sit down together for a very special episode.

After getting the chance to speak together about the best professional advice that listeners had ever received at the end of the year, Lisa and Mary received some great feedback from listeners.  Some of the responses were about achievements of our community, and we took that feedback and decided to team up again in this latest episode which is all about celebrating in the “wins” experienced by listeners of the podcast who have taken the insight of our guests and people in the podcast community and moved their careers and/or professional development forward.

All of the feedback that Mary and Lisa receive, positive or negative, is important in developing the GWIC podcast and community.  But there is nothing that brings more joy and pride than when they hear about how the podcast has resulted in favorable outcomes for their guests and listeners.  This episode is a way to share that joy with all listeners and celebrate in the achievements of others.  Because when one of us does well, collectively all of our boats rise.

Listen in to hear about the personal journeys of the listeners with the stories they have submitted and the feedback provided by guests.  Lisa and Mary cap off the episode by sharing how hosting the podcast has touched each of their lives.  You’ll also have the chance to hear how to snag yourself a huge Compliance Week professional development opportunity as one of the podcast’s valued listeners!

Join the Great Women in Compliance community on LinkedIn here.

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 we take a deep dive into recent Hogan Lovell’s report High Seas: Steering the Course II Navigating bribery and corruption risk in 2020. We conclude with a special tribute to Bernie Ebbers and his role in creating the modern compliance professional.

Some of the highlights include:

  • What do the survey results say about the direction of compliance function spending?
  • Can companies manage risks in emerging markets when compliance spending is decelerating?
  • Technology can improve compliance efficiency but it can also improve compliance evasion.
  • Will CCOs be able to interpret data from ComTech tools?
  • What are the implications for the compliance discipline and CCO?

Resources

Hogan Lovell’s report High Seas: Steering the Course II Navigating bribery and corruption risk in 2020, click here.

Matt Kelly blog post, Compliance Resources Getting Tighter

One of the areas that many companies have not paid as much attention to in their anti-corruption compliance programs is designing their compensation system to more fully operationalize compliance. However, the DOJ and SEC have long made clear that they view monetary structure for compensation, rewarding those employees who do business in compliance with their employer’s compliance program, as one of the ways to reinforce the compliance program and the message of compliance.

There are three key questions you should ask yourself in modifying your compensation structure. First, is the change simple? Keep the compensation plan simple and even employee KISS, (Keep It Simple Sir), when designing your program. Second, is the changed aligned with your company values? As the CCO or compliance practitioner, you need to posit the most important compliance goal your entity needs to achieve. From there you should determine how your compensation program can be aligned with that goal. Third, is the effect on behavior immediate due to the change? Finally, under immediacy, it is important that such structures be put in place “immediately” but in a way that incentives employees.

Three key takeaways:

  1. The DOJ and SEC have long advocated compensation to motivate employees into ethical and compliant behaviors.
  2. Keep the compliance aspects of your compensation structure simple and easy for your employees to understand.
  3. Have full transparency in the frame of your compensation structure.

 

Most compliance professionals understand the need to discipline employees who may have violated ethics and compliance programs or otherwise engaged in bribery and corruption. However, many Chief Compliance Officers (CCOs) and compliance practitioners do not focus as much attention to compliance incentives. I have developed six core principles for incentives, adapted from Spring 2014 MIT Sloan Management Review article, entitled “Combining Purpose with Profits”, and formulated them for the compliance function in an anti-corruption compliance program.

1.     Compliance incentives don’t have to be elaborate or novel.

2.     Compliance incentives need supporting systems if they are to stick.

3.     Support systems are needed to reinforce compliance incentives.

4.     Compliance incentives need a “counterweight” to endure.

5.     Compliance incentive alignment works in an oblique, not linear, way.

6.     Compliance incentive initiatives can be implemented at all levels.

Obviously, this list is not exhaustive. Yet it is now more important than ever that you demonstrate tangible incentives for your employees to gain benefits, both financial and hierarchical, through doing business ethically, in compliance with your own Code of Conduct and most certainly in compliance with relevant anti-bribery laws. It is also a requirement that such actions be documented so they can be demonstrated to the regulators, if they come knocking.

Three key takeaways:

  1. Compliance incentives do not have to be elaborate or novel.
  2. You must create support systems for your compliance incentives.
  3. Compliance incentives should be implemented at all levels.

One of the key points that representatives of the DOJ and Securities and Exchange Commission (SEC) have continually raised when discussing any best practices compliance program. The 2012 FCPA Guidance is clear that there should be incentives for not only following your own company’s internal Code of Conduct but also doing business the right way, i.e., not engaging in bribery and corruption. On incentives, the 2012 FCPA Guidance said, “DOJ and SEC recognize that positive incentives can also drive compliant behavior.

These incentives can take many forms such as personnel evaluations and promotions, rewards for improving and developing a company’s compliance program, and rewards for ethics and compliance leadership. Some organizations, for example, have made adherence to compliance a significant metric for management’s bonuses so that compliance becomes an integral part of management’s everyday concern.” But it also recognizes that incentives need not only be limited to financial rewards as sometimes simply acknowledging employees for doing the right thing can be a powerful tool as well

Incentives can be integrated into the DNA of a company through the hiring and promotion processes. There should be a compliance component to all senior management hires and promotions up to those august ranks within a company. Your HR function can be a great aid to your cause in driving the right type of behavior through the design and implementation of such structures. Employees know who gets promoted and why. If someone who is only known for hitting their numbers continually is promoted, however they accomplished this feat will certainly be observed by his or her co-workers.

 Three key takeaways:

  1. The DOJ 2019 Guidance specifically calls out incentives for doing business ethically and in compliance.
  2. HR can lead the efforts around incentives.
  3. Incentives go beyond financial rewards.