Compliance and Ethics: Ideas & Answers. Edition 64
Dear friends,
Welcome back to another edition of Compliance and Ethics: Ideas & Answers.
This week, regular contributor Adam Balfour has a Star Wars themed compliance tip. We then have an article by guest writer Iva To?i? , on the Corporate Compliance Association in the Republic of Serbia and it's dedication to fostering fair and transparent relationships within the business community.
As always, we finish with a bit of fun in our regular feature Compliance Lite.
And don't forget there's more content on our website so please do visit us there to read our other articles.
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Thank you, Joe.
Star Wars Compliance Tip - Finn Opposing The First Order
by Adam Balfour
I couldn’t let Star Wars day (albeit on May 4th) pass without a Star Wars themed #SundayMorningComplianceTip
As we saw in the Star Wars sequel trilogy, Finn (or FN-2187 when he was a stormtrooper under the First Order) was horrified by the wrongdoing he witnessed under the First Order and took an extreme risk in escaping. While he knew escaping was the right thing to do, he initially struggled with his decision and adapting to life as part of the Resistance. Throughout his struggles and journey, we see Finn as being a good character and someone we cheer on for his bravery and integrity in opposing the First Order.
Speaking up is not easy, and most whistleblowers do not have a massive group of people like General Leia and the Resistance waiting for them when they take a stand against the wrongdoing they have seen and experienced - instead too many of them are left feeling alone and can struggle to find suitable employment opportunities (known as blacklisting). This continues to baffle me - whistleblowers are often unbelievably brave and loyal people who can see right from wrong even if everyone around them is going along with the misconduct.
It’s long overdue that we start to see whistleblowers as the good characters that they often are and cheer them on for their bravery and integrity in opposing wrongdoing. If you supported Finn in the Star Wars movies, you should also be supporting whistleblowers too.
Corporate Compliance Association – Republic of Serbia
By Iva To?i?, Assistant Professor at the Faculty of Law, Union University Belgrade
The Corporate Compliance Association (CCA) is a non-profit and independent professional association, founded in 2018 in Belgrade. By gathering individuals and companies committed to establishing and upholding fundamental values in business practices CCA is dedicated to fostering fair and transparent relationships within the business community.
Moreover, the acknowledgment of the broader impact of ethical business practices on society at large reflects a holistic understanding of corporate responsibility. Indeed, promoting fairness, transparency, conscientiousness, and good customs not only benefits companies and markets but also contributes positively to other aspects of social life.
Driving positive change
By advocating for a multilateral and multidisciplinary approach to these principles, the CCA demonstrates a commitment to driving positive change beyond the business realm. Such initiatives are crucial for creating a more equitable and sustainable society. CCA is taking proactive steps to prioritize ethics and compliance, ultimately aiming to create a better business environment and society as a whole.
The CCA aims to promote and improve business ethics, compliance, and corporate culture. To achieve this, it strives to strengthen the compliance community while establishing a forum for the exchange of information, ideas, and good practices. Additionally, the CCA is dedicated to providing quality education on business ethics, compliance, and corporate culture. It also endeavors to contribute to the development of regulations and standards in this field, aligning the market with the best practices of developed international markets
Education on compliance & ethics
By supporting the projects of other organizations, the Association fulfills its mission of improving and promoting ethics, culture and compliance in business through the implementation of educational programs, workshops and lectures. One of the primary goals of the Association is to enhance knowledge and exchange experiences among its members and other relevant stakeholders such as representatives of government bodies, regulators, and the academic community in order to influence the quality of education offered to compliance professionals or those aspiring to become one.
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The Devil’s Advocate:? Was this the start of DOJ’s commitment to compliance programs, or just a chance encounter with the Devil?
By Joe Murphy
It was getting close to November 1992 and our chapter of the American Corporate Counsel Association, DELVACCA, was planning to do a conference on the Sentencing Guidelines and compliance programs. Behind this was a mission that I was determined to pursue.
Back then, the standard approach to getting companies to take steps to prevent violations was fire and brimstone – the typical lawyer’s approach, relying solely on fear. It was government, academia and lawyers telling you that if you were caught you would face big punishment. Break the law and you will be engulfed in fire and brimstone.? It sounded good, but as Professor Christopher Stone had cogently pointed out, it just did not have the effect they thought it would. In his insightful book, “Where the Law Ends” he had observed that deep within companies the remote outside fear was very weak. On the other hand, the fear that your boss would be on your back for not meeting goals, or that the stock would drop if you exceeded costs was far more immediate than some remote fear of being caught. In effect, the law “ended” at the corporate walls. ?
We knew that a better approach was to use positive incentives to get companies to apply solid management steps to prevent misconduct, i.e., an effective compliance program. Yet in planning the 1992 conference and having the US Attorney for the Eastern District of Pennsylvania be our honored guest, we expected just another list of bad things that would happen if we did something wrong, and we expected that this was not going to move the needle.? We wanted a talk that would inspire company counsel to advocate for compliance programs.? And we wanted a good message that we could take national.?
How to do this?? Back in 1988, when I co-authored my first book on compliance, one result was that I connected with Jeff Kaplan, who was to become my career-long co-conspirator in promoting compliance programs.?? I had an idea that I thought Jeff would go for, and also be able to pull off.? I wanted Jeff to be a devil’s advocate:? make the case for why NOT to have a compliance program.? His pitch would be that the government would not really care if you had a compliance program, would just ignore it, would indict your company anyway, and would probably use your compliance program against you.? So why even bother?? We shared this plan with then US Attorney Michael Baylson.?
Jeff, being possibly the most imaginative person in the compliance and ethics field, took my humor one step further.? Since he was to be the devil’s advocate he came dressed in an actual, red devil’s costume.? There are scenes in our lives we never forget – this was certainly one for me.
Jeff delivered as advertised.? And much to our delight, our US Attorney was among the first US Attorneys, if not the very first, to state on the record that compliance programs would be considered in the decision whether to indict and prosecute a company.? In words I still remember, he said:?
“You cannot get to first base with a prosecutor without having a compliance program, and having one may land you a home run.”
He went on to state this forcefully:
“Prosecutors will want to give weight to a real program. If truly valid and effective compliance programs are not credited with sufficient significance to forestall a criminal indictment, then the government will have only deterred the use of compliance programs, rather than deter crime.”
Imagine Jeff’s and my sense of satisfaction on hearing these words.? Of course, if a good idea falls in the forest, is it really a good idea?? Jay Sigler and I had already established a national compliance publication at Rutgers University in Camden, called Corporate Conduct Quarterly (first published in 1991).? Our lead story for the winter 1992 issue was:
“Getting the Demons Into Heaven:? A Good Corporate Compliance Program.” By Michael Baylson.?
Was this 1992 speech and article a step that helped lead to the ultimate adoption by DOJ of this philosophy? Was Jeff’s decision to appear as the Devil’s advocate history in the making?? Maybe it was.? But it was certainly one of my most memorable experiences as a compliance warrior.??
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