Yesterday, I honored John McCain for his integrity. Today, I want to honor another great American we recently lost for a different ability – storytelling. On Sunday Neil Simon died. He was truly one of America’s great playwriters, even if he did not have the critical acclaim of others in the Pantheon. His output of work was truly prodigious, beginning in the 1950s with Sid Caesar’s legendary Your Show of Shows where he teamed with other now iconic screenwriters such as Woody Allen, Mel Brooks and Larry Gelbart.

As noted in his New York Times (NYT) obituaryin the 1960s he hit an early stride “with the breakthrough hits “Barefoot in the Park” (1963) and “The Odd Couple” (1965) and continuing with popular successes like “Plaza Suite” (1968), “The Prisoner of Second Avenue” (1971) and “The Sunshine Boys” (1974), Mr. Simon ruled Broadway when Broadway was still worth ruling. From 1965 to 1980, his plays and musicals racked up more than 9,000 performances, a record not even remotely touched by any other playwright of the era. In 1966 alone, he had four Broadway shows running simultaneously.”

While I missed this first run of great plays, I was introduced to Simon by his largely biographical “trilogy, “Brighton Beach Memoirs” (1983), “Biloxi Blues” (1985) and “Broadway Bound” (1986). These comedy-dramas were admired for the way they explored the tangle of love, anger and desperation that bound together — and drove apart — a Jewish working-class family, as viewed from the perspective of the youngest son, a restless wisecracker with an eye on showbiz fame.”

While this trilogy never veered far from his Jewish roots, I always saw it as great storytelling about the American working-class and the struggles of those growing up in it.  One of the things I try to do in my writings, blogs, podcasts and speeches is to tell the story of compliance. With a tip of the stage hat to Neil Simon, I am pleased to announce my next Compliance Master Class, which will be held on September 25thand 26thin Boston. I will be hosted by Affiliated Monitors, Inc. and the event will be held at their offices, 85 Devonshire Street in the heart of old-town Boston.

This Compliance Master Class is not theory or analytical underpinnings of the Foreign Corrupt Practices Act (FCPA) as the focus will be on the operationalizingof compliance. For it is only in the doing of compliance that companies have a real chance of avoiding FCPA liability. This is the true story of compliance and after this Master Class, you will be able to go a long way to putting into place some of the best practices expected by the Department of Justice (DOJ) and Securities and Exchange Commission (SEC).

The Compliance Master Class provides a unique opportunity for any level of FCPA compliance practitioner, from the seasoned Chief Compliance Officer to the practitioner who is new to the compliance profession. If you are looking for a training class to turbocharge your knowledge on the nuts and bolts of a best practices compliance program going forward, this is the class to attend. You will have an intensive focus group of like-minded compliance practitioners with which you can share best practices. It allows us to tailor the discussion to your needs.

As one of the leading commentators in the compliance space for several years, I will bring a unique insight of what many companies have done right and many have done not so well over the years. This professional experience has enabled me to put together a unique educational opportunity for any person interested in anti-corruption compliance. Simply stated, there is no other compliance training on the market quite like it. Armed with this information, at the conclusion of the Compliance Master Class, you will be able to implement or enhance your compliance program, with many ideas at little or no cost.

The Compliance Master Class will move from the theory of the FCPA into the doing of compliance and how you must document this work to create a best practices compliance program. Building from the Ten Hallmarks of an Effective Compliance, the questions posed from the Evaluation of Corporate Compliance Programs and the information from the FCPA Corporate Enforcement Policy as a guide, you will learn the intricacies of risk assessments; what should be included in your policies and procedures; the five-step life cycle of third party risk evaluation and management; tone throughout your organization; training and using other corporate functions to facilitate cost-effective compliance programs. In short you will learn the story of compliance and how you can use that story to positively impact not only your compliance program but also the bottom line of your organization.

You will be able to walk away with a clear understanding of what anti-corruption compliance is and what it requires; an overview of international corruption initiatives and how they all relate to FCPA compliance; how to deal with third parties, from initial introduction through contracting and managing the relationship, what should be included in your gifts, travel, entertainment and hospitality policies; the conundrum of facilitation payments; charitable donations and political contributions, and trends in compliance. You will also learn about the importance of internal controls and how to meet the strict liability burden present around this requirement of FCPA compliance.

The Compliance Master Class will be based around my latest book, The Compliance Handbook, which focuses on the creation, implementation and enhancement of a best practices compliance program. As the guy who wrote the book on compliance, I can provide to you not only the most up-date thinking and best practices but also the top ideas from other thought leaders across the country and globe on compliance. There is no other compliance training which puts together as much materials as is found in the Compliance Master Class.

The Compliance Master Class will be held on September 25thand 26that the offices of Affiliated Monitors, Inc., 85 Devonshire St, Boston, MA 02109. A Certificate of Completion will be provided to all who attend in addition to the continuing education credits for each state that has reciprocity with Texas. In Texas, CLE for 10.5 hours has been approved. The cost to attend is $1,495 per person. Breakfast, lunch and refreshments will be provided both days. For more information or a copy of the agenda email me at tfox@tfoxlaw.com. To register, go to my website, FCPA Compliance Report.

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

John McCain died over the weekend. I cannot think of a much better example of someone who continually sacrificed himself for his country than McCain. He was the son and grandson of US Navy Admirals; was shot down over North Vietnam and was tortured mercilessly by his captors. He was eventually released when the war ended for America. He dove into public service, representing Arizona First Congressional District from 1982 to 1986 when he took up residence in the US Senate, where he served until his death. One word often associated with McCain was integrity.

McCain was a well-respected Senator, always known for his maverick streak, no more so on display than in the 2000 Republican presidential primary when he ran the “Straight Talk Express” campaign, which was one of the most successful examples of retail politics. One reporter later recounted, “McCain talked all day long with reporters on his Straight Talk Express bus; he talked so much that sometimes he said things that he shouldn’t have, and that’s why the media loved him.” While McCain did not win the 2000 nomination, he was the party’s nominee in 2008.

How well was McCain thought of by his colleagues? Not only will his body lying in state at the Senate this week but a Senator from the opposition party has said he will put forward a motion to rename the Senate’s Russell office building after McCain. As noted in the online publication Slate, “The suggestion by the top Democrat in the Senate amounted to an acknowledgment of how McCain built up a lot of respect and goodwill among Democrats as well as Republicans after serving Arizona for more than 30 years on Capitol Hill.” Finally, both of his former presidential opponents George W. Bush from the 2000 GOP primary and Barrack Obama from the 2008 General Election will be giving eulogies at McCain’s funeral. You should also note who is not invited – President Donald Trump.

I thought about McCain and his legacy in connection with a 2012 Harvard Business Review (HBR) article, entitled “Greased Palms, Giant Headaches”, by Dan Currell and Tracy Davis Bradley where the authors considered what a company should do when short term goals cause pressure, pressure and more pressure for increased revenues. The authors acknowledge that a robust compliance program is a key component for protection against bribery and corruption by employees, but they believe that more is needed. They identify “Integrity Capital” as a key component to “lower levels of misconduct along with higher levels of reporting when employees do witness wrongdoing. Integrity capital is embedded in the culture, not instituted through controls, and it helps shape employee behavior, which could include offering a bribe or defrauding the company.” The authors identify the following as five factors of Integrity Capital:

  1. Management takes action when it becomes aware of misconduct.This means that companies “must insist on a swift response to complaints, unbiased investigations” and even “public hangings” of offenders.
  2. Employees are comfortable speaking up about misconduct and don’t fear retaliation. While this would seem to be self-evident, it is a sad fact that in many companies, whistleblowers are ostracized or even blamed for the conduct in question. Witness the initial response by Wal-Mart management in the 2005-timeframe to allegations of corruption made by an employee with knowledge of the conduct. He was blamed for the conduct at issue. Even in the allegations brought to light with European Aeronautic Defence and Space Company (EADS), the whistleblowers were marginalized or worse by the company.
  3. Senior leaders and managers treat employees with respect.The authors believe that in addition to not mistreating whistleblowers, companies should “praise employees who have the courage to call out wrongdoing.”
  4. Managers hold employees accountable.Simply put, if an employee engages in bribery or corruption, they need to be disciplined or discharged. Allowing high revenue generators or high-income generating territories or business units to avoid scrutiny and/or sanctions is a clear recipe to destroy the integrity of a compliance program.
  5. High levels of trust exist among colleagues. Your employees must believe that the company will take allegations seriously and will act on the information that they provide.

The authors conclude their article with three different concepts which they believe will minimize the occurrences of bribery and corruption within an organization. First, a company should use commonsense observation. If an emerging market shows success in “speeding things along”, such as regulatory approvals for the construction of bricks-and-mortar facilities, this made need to be looked at closer. Since regulatory approvals do not happen quickly in BRIC countries, it may be that the skids were greased with cash to pay bribes. The second is that a company must be proactive in seeking out and obtaining information from employees about allegations of bribery and corruption. The authors “advise companies to also proactively solicit information from frontline employees and to use surveys or online tools to guarantee anonymity” in reporting allegations of bribery and corruption. Lastly, the authors insist that companies have organization justice so that if there are credible reports of misconduct they are not swept under the rug.

Currell and Bradley provide interesting observations which can be used by a compliance professional to evaluate the sufficiency of their compliance program. Their thoughts on things to look for from an emerging market provide solid guidance on searching for potential red flags which might warrant further investigation from internal audit or a Foreign Corrupt Practices Act (FCPA) based compliance audit team. There are a number of practitioners and ethicists who talk about the need for ethics in any company culture to compliment a compliance program. The HBR article provides some of guidance on what that may look like.

John McCain was a great American, certainly one who put the interests of his country far ahead of his own personal gain. With all the corruption embedded in the current administration his example should continue to shine a light one how one can be principled and move forward.

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

Jay has returned from an Alaskan Disney cruise with the family. As OSU suspends its head coach and added a new phrase to our compliance and ethics lexicon significant memory issues; Tom and Jay are back with a look at some of the week’s top compliance and ethics stories.

  1. OSU head coach Urban Meyer suspended for three games by the OSU Board. The Board stated in part, “We also learned during the investigation that Coach Meyer has sometimes had significant memory issues in other situations where he had prior extensive knowledge of events. He has also periodically taken medicine that can negatively impair his memory, concentration, and focus.” See articles in Sports Illustrated here, here and here. In ESPN here and here. On The Ringer here.
  2. Corruption and PdVSA: another one bites the dust as former Swiss banker pleads guilty to money-laundering. Harry Cassin reports in the FCPA Blog. Sam Rubenfeld weighs in on the WSJ Risk and Compliance Journal.
  3. Should sports officials have a Code of Conduct? David Dodge says aye, writing in the SCCE Blog.
  4. Mike Volkov takes a look at CIFUS and what it means for compliance. Part 1 on the increasing risk in cross border M&A and Part 2 on CIFUS expanding authority.
  5. Former head of Brazilian soccer is sentenced to 4 years in jail for role in FIFA bribery scandal. Sam Rubenfeld rerports in the WSJ Risk and Compliance Journal.
  6. The paper chase: no it’s the paper trail. Francine McKenna considers the Cohen guilty plea from the paper trail perspective in MarketWatch.
  7. How did the tipping point in personal misconduct actually tip? Matt Kelly explores in the Navex blog Ethics and Compliance Matters.
  8. Would a no-deal Brexit be a disaster for compliance? Paul Hodgson reports in Compliance Week. (sub req’d)
  9. How did the CCO move from Hall Monitor to Strategic Partner? Maurice Gilbert interviews Gan Integrity’s Valarie Charles on CCI’s, Connected
  10. Tom considers compliance and the movies. Matt Kelly considers compliance on television. Tom says Film Noir informs better compliance, with an assist from Ethisphere on the FCPA Compliance and Ethics Blog. Matt lists his favorite TV shows featuring compliance, on Radical Compliance.
  11. Tom and Jay review their Top 5 film noir
  12. On this week’s featured podcast series, I interviewed Vin DiCianni and Eric Feldman on ethical culture. Check out these podcasts: Part 1-What is an ethical Culture? Part 2-What factors influence culture?;Part 3-The role of a CCO in an ethical culture; Part 4-How does a company assess its culture? And Part 5-Ethical Culture as part of an E&C program assessment.

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.

The recent case involving the Jehovah’s Witnesses and data privacy in the UK raised some very interesting legal issues. It also demonstrated just how broad the reach of GDPR could be. In this podcast Jonathan Armstrong and I unpack the case, detailing the underlying facts, the Court’s rationale behind its decision and conclude with some of the implications for not only corporations but also individuals and data privacy practitioners. Some of the highlights are:

  1. Religious communities subject to GDPR;
  2. Individual persons can be data controllers as well as their parent organization, even if they do not exercise control;
  3. Data protection and data privacy laws apply to hard copies; and
  4. The domestic purpose exception is to be narrowly applied.

In this episode, Richard Lummis and I consider how the Houston Astros went from literally the worst team ever in baseball to World Series Champions, as been chronicled by Sports Illustrated writer Ben Reiter in his book “Astroball: The New Way to Win It All”. The book tells the story of how two persons had a vision of using data analytics to literally change the game of baseball. The two men were Jeff Luhnow, the former Director of Scouting for the St. Louis Cardinals, and former NASA rocket scientist Sig Mejdal, who became Luhnow’s assistant at the Astros. Team owner Jim Crane had the foresight to buy into Luhnow’s vision and the wherewithal to put up with people like me who were unpitying in their criticism of the Astros and their plan. It turns out they did have a plan and, more importantly, they executed it.

Key highlights are:

  1. The use of data analytics in player selection.
  2. The use of data analytics in player development.
  3. How data analytics supplement but do not replace scouting.
  4. What are the leadership lessons to be garnered from the Astros experience with data analytics.