Welcome to Episode 5 of Compliance Man Goes Global podcast of FCPA Compliance Report International Edition. In this episode, we focus on typical concepts (or probably myths) of ways a Compliance professional might become a more valuable member of the management team rather than becoming most hated person in the organization. We will do it in plain language and in the simple game form. Moreover, to make the podcast handy and more appealing we attach respective illustration from the Compliance Man illustrated series, created by Timur Khasanov-Batirov.

For those of our listeners who are not aware about our format, in each podcast, we take two typical concepts or more accurately misconceptions from in-house compliance reality. We check out if these concepts work at emerging jurisdictions. For each podcast, we divide roles with Timur, a practitioner who focuses on embedding compliance programs at high-risk markets. One of us will advocate the concept identifying pros. The second compliance man will provide arguments finding cons and trying to convince audience that that we face a pure myth. As a result, we hopefully will be able to come up with some practical solutions for in-house compliance practitioners.

Tom: To start with, Tim, probably we should explain to our listeners why we called our today’s episode ‘You Really Like Me’?

Tim Khasanov-Batirov: We call today’s episode “You Really Like Me!” remembering Sally Field’s gushing acceptance speech at Oscar ceremony. The funny thing is that sometimes even in-house Compliance people have a strong wish to exclaim after her something like: “I haven’t had an orthodox career, and I’ve wanted more than anything to have your respect. The first time I didn’t feel it, but this time I feel it—and I can’t deny the fact that you like me, right now, you like me!”

Tom: OK, Tim, let’s see if this is possible in reality or would remain just a dream of Compliance officers globally.

Myth #1 There is a chance that Compliance officer could avoid being named the most hated person in the organization.  Tim, do you agree with this statement?

Tim Khasanov-Batirov: Let’s try. I think we have some pros here:  

Argument #1.

A Compliance professional can avoid being the most hated person if personnel along with top management understand the role of Compliance function in the organization. Unless a Compliance professional delivers a clear message about risks he or she manages and value they bring, they are dependent on subjective views of other team members. We have depicted this situation in the attached release of Compliance Man illustrated series.

Argument #2.

You might think about setting KPIs based on respective regulatory requirements referring for instance to 10 Hallmarks of the Effective Compliance Program or the Evalution of Corporate Compliance Programs. This will allow you to set criteria, which could be used for unbiased and verifiable evaluation of your efforts.

Tom:  I think, Tim that there are some cons here as well:

Argument #1

As we know, there is no way people will like a Compliance officer all the time. Subject to particular situation or position, the Compliance professional’s managers might change their minds. So we should not have illusion of being most loved person constantly.

Argument #2

There is a big risk if Compliance person becomes too friendly with the employees and becomes co-opted by the business folks. This could lead to losing impartiality. Therefore, there is a very thin line between being business-oriented ethics professional and attempts just to ‘get likes’ from management.

Tim: Tom, I agree with you.

Tom: Let’s go, Tim. We can formulate the next concept or maybe misconception in the following way:

Myth #2. In real life, Compliance officer de-facto is not able to become a member of managerial team (or just “team” so to say) being isolated from it by virtue of his “business prevention” mission. Tim, will you agree with this concept?

Tim: I strongly disagree with this concept.

Argument #1.

In my view, Compliance department in many cases is called a “Business prevention unit” not because of being very strict and picky. It is because of not fully understanding the business processes involved. As soon as compliance officer starts to hear other team members, he will be able to suggest solutions, which are compliant, and business oriented in the same time.

Argument #2.

It is about priorities. Management team should clearly see that Compliance officer is focusing on real regulatory risks and priorities rather than creating a useless bureaucracy regarding minor issues, which in many cases could be easily resolved.

What are your views, Tom?

Tom: I have some pros to support the concept that in reality Compliance officer is not just another member of the business team.

Argument #1.

We have a special mission to assess business from external, in majority of cases regulatory prospective. Thus, many things, which at first glance might look as being good for business, could pose regulatory risk in the future. Thus, Compliance person is in charge of demonstrating a high-level or strategic view rather than solely looking at momentary business advantages.

Argument #2.

Compliance is a relatively new job in comparison to well established corporate functions such as a Legal Department or even Internal Audit. So even just by mere fact of being a “newcomer” the Compliance Officer differs from almost all members of the management team which represent “traditional” occupations.

Tim: Agreed, Tom. As key takeaways from today discussion, I think we can mention the following:

  • Compliance officer should be a business-oriented person with good understanding of business processes along with clear views on how to structure them in line with regulatory expectations.

Tom: Fair enough, Tim. It looks to be a practical tip. Tom Fox and Tim Khasanov-Batirov were here for you.

Join us for the next episode of Compliance Man Go Global episode of FCPA Compliance Report International Edition. Let’s bust more corporate compliance myths with us.

Welcome to Episode 4 of Compliance Man Goes Global podcast of FCPA Compliance Report International Edition. In this episode, we will focus on typical myths and mistakes regarding compliance trainings. We will do it in plain language so to say and in the simple game form. Moreover, to make the podcast handy and more appealing we attach respective illustration from the Compliance Man illustrated series, created by Timur Khasanov-Batirov.

For those of our listeners who are not aware about our format, in each podcast, we take two typical concepts or more accurately misconceptions from in-house compliance reality. We check out if these concepts work at emerging jurisdictions. For each podcast, we divide roles with Timur, a practitioner who focuses on embedding compliance programs at high-risk markets. One of us will advocate the concept identifying pros. The second compliance man will provide arguments finding cons and trying to convince audience that that we face a pure myth. As a result, we hopefully will be able to come up with some practical solutions for in-house compliance practitioners.

Myth #1 Compliance training is not an entertainment. It is a very serious thing. Such trainings are about anticorruption, criminal enforcement and consequently could be delivered only by legally trained compliance team members.  Tim, do you agree with this statement?

Tim Khasanov-Batirov: It is a very typical assumption. Let’s see what pros we have:  

Argument #1.

Obviously, the training should cover anticorruption matters based on corporate rules, local and applicable extra-territorial legislations (like FCPA, for instance). Referring to relevant enforcement cases from the specific industry is vital to make training close to reality. Should we have as trainers only lawyers from compliance team? I would say, yes. Lawyers are expected to know and naturally are close to such things as legislation, corporate rules and alike;

Argument #2.

Now let’s discuss if compliance training could be delivered in entertaining form. As we remember, Tom, may be 10 years ago compliance trainings were supposed to be dull and lengthy. They were so to say the best cure to fight insomnia. Now we have the opposite situation. In attempt to be modern, we have appealing, funny and entertaining compliance shows. The problem is that the content of training in many such cases become something secondary after the form of delivery;

Tom:  I think, Tim that there are some cons here as well:

Argument #1 is about having only lawyers as compliance trainers.

I believe for some audiences’ deep knowledge of regulations is not needed. This might be a case for instance when audience should understand just basic rules. Therefore, you can deploy HR team or non-lawyers from compliance department to conduct session for the staff. Moreover, lawyers tend to train employees as if they were talking to other lawyers, which is usually not the case for compliance and ethics training.

Argument #2 is about entertaining. I think the best way is to define what specific matters should be communicated and what are the best ways to do it for the target group. The answer on how to do training basically depends on corporate culture. I think the main test is whether compliance practitioner can deliver the message or no matter in what form.

Tim: Tom, I agree with you. As we have started to talk about trainings maybe we can refer to the topic of their evaluation or as you might say in the US, their effectiveness?

Tom: Good idea, Tim. We can formulate the next concept or maybe misconception in the following way:

Myth #2“Do not complicate things, there is no need to evaluate compliance trainings. It is just about communicating the rules”. Tim, will you agree with this concept?

Tim: I strongly disagree with this concept.

To start with, training will be evaluated by participants informally. If compliance training is about rules which are irrelevant to participants or compliance session is not tailored per audience people will notice that. This situation is depicted in Episode 3 of Compliance Man comics series. Unfortunately, it is a typical problem of global companies. It looks like that: there is a requirement to conduct compliance training for local personnel using standard presentation from the HQ.  A local compliance officer conducts this training. Formally, everything is fine. In reality, participants understand nothing.

Even if you are not fan of training evaluation or it does not work in your situation for some reason here is a tip. First, do the homework and learn about the department for which you are going to conduct training. Talk to key managers to explore specifics of department’s activity, which are relevant to topic of compliance training. This will help you to tailor the session for that audience. I also strongly recommend engaging supervisor of this unit to be your co-speaker at the training session. People will follow what their boss it is telling them to do. In our case that will be compliance requirements.

What are your views on necessity to evaluate compliance training, Tom?

Tom: I have some thoughts, which might look controversial at first sight but hopefully could be of value to compliance practitioners:

The first thing is about illusions. As you fairly depicted in Compliance Man Illustrated the feedback or evaluation of the training will pop up anyway. It will be communicated among personnel informally.   Probably you will never learn about it. Another situation, which comes to my mind. If there is colleague from compliance team or Legal man (as in the Illustrated series) who supports you he will tell you that everything was just perfect. This could be illusion as well.

Argument #2.

Having said all that, be sure that if you are going to evaluate the training you must formulate very specific questions to avoid general answers from participants of no practical value. Some companies demand to identify the name of the participant in the training evaluation survey. Obviously, in this case you will not get impartial answers.

But this evaluation of effectiveness is critical as the regulators, literally from across the globe, are now focusing on your compliance training program’s effectiveness. This means you must not only design appropriate questions but also test the questions and responses in a way which gives you real answers. Of course if these questions show your training is not effective, you must use that same information to revise your training so that it is effective.

Tim: Agreed, Tom. As key takeaways from today discussion, I think we can mention the following:

  • Compliance training should not be of formal and irrelevant to audience nature. Find ways to tailor your session so your messages will be delivered and appreciated by the audience.

Tom: Fair enough, Tim. It looks to be a practical tip. Tom Fox and Tim Khasanov-Batirov were here for you.

Join us for the next episode of Compliance Man Go Global episode of FCPA Compliance Report International Edition. Let’s bust more corporate compliance myths with us.

 

Tom Fox: I welcome you to Episode 3 of Compliance Man Goes Global podcast of FCPA Compliance Report International Edition. As always, I am joined by Timur Khasanov-Batirov, a practitioner who focuses on embedding compliance programs at high-risk markets.

In this Episode, we will focus on organizational challenges, which сcompliance practitioner faces in the process of implementing corporate compliance program. To make the podcast handy and more appealing we attach an illustration from Timur’s Compliance Man illustrated series which is posted with this podcast.

In each podcast, we take two typical concepts or probably misconceptions (conventional wisdom n Texan parlance) from in-house compliance perspective. We check out if these concepts work in emerging markets and jurisdictions. For each podcast, we divide the roles. One of us advocates the particular concept identifying pros. The second will provide arguments finding cons and trying to convince audience that that we face a pure myth. As a result, we hopefully will be able to come up with some practical solutions for in-house compliance practitioners can use in their company going forward.

Corporate Concept #1. On practice compliance program is something, which is needed solely to compliance folks. Nobody else in corporation really cares. Tim, do you have arguments based on your in-house experience, evidencing that such assumption exists and has supporters among corporates?

Tim: While I do not personally think that this statement is right, nevertheless I believe there is several pros, which demonstrate that such assumption takes place on practice:  

Argument #1.

By analogy with other departments which deal with assigned areas of responsibility as Sales or Finance Compliance department in views of ordinary personnel is responsible for Compliance. That simple. Consequently, per this corporate theory Compliance department should oversee Compliance whatever it means;

Argument #2.

You might face the theory that management and compliance are not sitting in the same boat. This could be clearly seen in budgeting process for instance. Compliance folks are viewed by top management as just subordinates like others. Compliance department asks for money as others. It is not a big deal to reject these requests in the same way they reject request from any other unit;

Argument #3.

Business leaders are not aware that per regulatory expectations (i.e. Evaluation of the Corporate Compliance Programs by DOJ) it should be them not solely compliance team who should be modeling proper behavior to personnel. Consequently, they guess that Compliance teams is the only player to name when you refer to corporate integrity or regulatory expectations.

Tom:  OK, let’s see how we as compliance practitioners can fight this conventional wisdom. Here are cons:

Argument #1.

The trick is that people do not see the difference between compliance as in-house function and organization’s obligation to act properly. As in-house department compliance team can facilitate the process, implement measures aimed raising integrity level, set controls, advise, teach and etc. However, compliance team not in position in 100% cases to prevent someone from wrongdoing if she intentionally wants to break the rules.

Argument #2.

I think that what is depicted in the beginning of the Episode 3 of Compliance man series when Ms. Corporate is not acknowledging that both she as a manager and compliance team are on the same boat (or yellow submarine if we remember classical song) is something which you could face on practice. If top manager understands that, she has even more stringent obligation than even compliance folks in embedding integrity she will more attentively review budget requests you have mentioned and will not isolate her from corporate integrity efforts. So, I believe the biggest challenge and top priority for in-house compliance team is to prove its use to business as a safeguard and trusted advisor.

Corporate Concept #2- “In-house compliance team never possess sufficient resources 

This is controversial concept regarding the resources the compliance personnel need to effectively implement the corporate compliance program. Tim, will you support this commonly repeated complaint from in-house compliance community?

Tim: It looks to be a very controversial statement, which in my view might easily become subject to speculations in internal discussions between management and compliance department. I am ready to recall arguments encouraging us as in-house community to decrease the number of complaints on lack of resources.

Argument #1.

If the standard to be followed is duly defined in organization, for instance compliance with FCPA based on 10 Hallmarks you can at least roughly estimate resources you need rather than exclaiming constantly without any justification that Compliance department is suffering due to lack of resources. By the way, risk assessment could be a very powerful instrument in assessment hot spots for which you need resources. It will prevent you from boiling the ocean by conducting activities of low added value and consequently will prevent waste of resources.

Argument #2.

Innovations, innovations, innovations. I know Tom that you touch this topic frequently, which in my view is very important for compliance profession. From innovations in methods of doing things to new technologies things have been changing. Nowadays, many technologies become available literally for free. Sometimes compliance people just do not know about that. For instance, my children taught me how to make a video with special effects using a smartphone. 10 years ago, to make a compliance video for personnel was a big project, which required budget and engagement of dedicated agency.

Tom: My concerns regarding the topic of availability of resources to in-house compliance are the following:

Argument #1.

Lack of resources in even obvious compliance tasks as Due Diligence is one of the things that compliance community means when they refer to lack of resources.

Argument #2.

Budget limitations is something that Compliance department would face as any other unit. So, there is no way to escape the situation when you get less than you asked for.

Argument #3.

What resources you can you received? Compliance Man got a magazine with picture of Ms. Corporate on the cover from her. Is that what you need? For importantly, what are you going to tell the regulators. I often cite the story told by Stephen Martin, a partner at Arnold & Porter. When he worked for the Department of Justice he would ask a CCO how much money his company spent on yellow sticky-notepads. Then he would ask how much was spent on the compliance program? If it was more on the notepads, he would ask which was more business critical to complying with the law. The bottom line is that whatever your compliance budget is, you must be prepared to justify it to regulators.

Tim: Agreed, Tom. As key takeaways from today discussion, I think we can mention the following ones:

  • A compliance practitioner should clearly understand his role in organization along with role of key stakeholders in implementation the corporate ethics program;
  • A compliance practitioner should understand the standards and applicable laws to be followed by organization along with resources he need to reach the abovementioned requirements.

Join us for the next episode of Compliance Man Goes Global episode on the FCPA Compliance Report International Edition.  Come and bust more corporate compliance myths with us.

In this Episode 2 of Compliance Man Goes Global podcast of the Compliance Report International Edition, we focus on real priorities of the corporate compliance programming at high-risk markets.  In each podcast, we take two typical concepts or probably misconceptions from in-house compliance reality. We check out if these concepts work at emerging jurisdictions. For each podcast, we divide roles with Tim Khasanov-Batirov, a compliance practitioner who focuses on high risk markets for 17 years and myself.

Corporate Concept #1. We have officially deployed compliance program at a high-risk market. All hallmarks are duly identified in it. I do not understand what kind of priorities I have to consider in addition to regulatory hallmarks. When enough is enough? Read More

I welcome you to a new series entitled Compliance Man Goes Global podcast of Compliance Report-International Edition. I am joined by Tim Khasanov-Batirov, a compliance practitioner who focuses on compliance in high risk markets for 17 years. In each podcast, we will take two typical concepts or more-probably misconceptions from in-house compliance perspective of conventional wisdom. We check out if these concepts work in emerging jurisdictions. For each podcast, we divide roles with one of us advocating the particular concept identifying pros; the other will provide arguments finding cons. Tim will conclude each concept with some practical solutions for in-house compliance practitioners for high-risk emerging markets.

Today we explore the following two concepts:

Corporate Concept #1. We have detailed policies in the HQ. We deployed those policies at our subs located in emerging markets. We will be just fine.  

Corporate Concept #2. If there is a compliance person located at high risk market we could significantly mitigate our corporate compliance risks.

Read More