Compliance and Ethics: Ideas & Answers. Edition 55
Dear friends,
Welcome back to another edition of Compliance and Ethics: Ideas & Answers.
In edition 55, we are delighted to unveil the availability of "Compliance and Ethics: Ideas & Answers" via email. Register now to receive our weekly newsletter directly in your inbox.
In this edition we have a piece by Adam Balfour on Human Proof Controls and Jeff Kaplan explains why conflict of interest training for managers can, and often should, be part of broader C&E training.
In our regular feature Compliance Lite, we ask 'What do Owls, Cows, Sheep & Coyotes have to do with compliance?'.
And as always, there's more content on our website so please do visit us there to read our other articles.
Thank you, Joe.
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Human Proof Controls
by Adam Balfour
Controls can be an important part of any governance program, including ethics and compliance programs. Controls can help ensure things go the way they are intended to, and help with alignment between the written/stated standards and what happens in reality. However, there is a big difference between having a control and having an effective control - a control that can be easily undone is not an effective control.
A recent basketball practice for one of my kids provided a real life example of how humans can manually get around controls. A simple traffic cone to prop open a door to the gym meant that everyone went through that door rather than going the slightly less convenient door people are told to go through by the sign.
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Controls that are based on how people “should” behave (rather than how they are “actually” going to behave) are at real risk of being undone or undermined. If controls are designed without thinking about how people will respond and react, then be prepared to see whether your control can withstand the creativeness of what people can do to get around the control.
The #SundayMorningComplianceTip series is taking a two week spring break - more tips coming soon!
Training Managers on Conflicts Of Interest
by Jeff Kaplan
While conflict of interest (“COI”) risks can exist at any level of an organization, as a general matter the risks increase (often sharply) as one proceeds up the org chart. Most obviously, this is because a) senior managers tend to have greater opportunities for COI-fraught relationships and activities than do other employees; and b) COIs at higher levels of an organization are likely to be more harmful than are lower-level conflicts. Given these and other factors, training managers on COIs can be an essential risk mitigant for many organizations.
Conflict of interest training for managers can (and often should) be part of broader C&E training covering other significant areas of risk (e.g., anti-corruption), as well as the roles of managers in the operation of the C&E program (e.g., encouraging whistle blowing).?Such training typically has two dimensions: an individual one – to help managers avoid having COIs themselves, and an organizational one – to assist managers in preventing/detecting/addressing COIs by colleagues and third parties.
More specifically, one might:
i) Start the COI part of the training with an attention-getting hypothetical (or actual) case, perhaps showing how harmful even well-meant COIs can be.
ii) Identify generally the types of COIs most relevant to the entity (individual COIs for all, organizational ones for some), as well as any special COI issues (such as, for certain types of entities, the need to avoid contributing to a COI by a third party).?
iii) Describe the legal and business imperatives for strong C&E efforts in these areas.
iv) Discuss how employee perceptions of COIs by managers can undermine faith in the C&E program as a whole.
Question: What do Owls, Cows, Sheep & Coyotes have to do with compliance?
You could say that owls are wise, cows are compliant, sheep follow the herd and coyotes are cunning. All possible characteristics of individual employees.
Answer: In reality however, they are just four animals that we got distracted talking about whilst planning this week’s newsletter!
Gerente Legal en Grupo Emefin - QSI
8 个月Very interesting ideas ??
Certified senior Compliance Officer
8 个月Thank you Joe for sharing such interesting information.
Editor, Compliance and Ethics: Ideas & Answers
8 个月For the Compliance Lite piece, we list a bunch of animals including sheep, as part of our last editors' meeting. I added the "sheep" part. I grew up in the country and it was very quiet (aka, boring). I tell people that in the 10 years I lived there the single most exciting thing that ever happened is that a neighbor's sheep got out and were grazing on our lawn one morning. That's it. For a decade growing up, the big event was sheep grazing. That's why today I live right in the center of a nice, busy town, across the street from a school. Cheers, Joe -?Editor, Compliance and Ethics: Ideas & Answers? https://ideasandanswers.com