An Inspired Choice – Ethical Leadership Under Difficult Circumstances

I am attending Compliance Week 2013 through Wednesday. As usual Matt Kelly and the Compliance Week team have put together a first rate program for the event. There have been, and will be over the next couple of days, some very informative panels, speakers, roundtables and conversations. The conference began today with a talk by Retired Major General Lewis MacKenzie, the former head of the United Nations peacekeeping forces. Although General MacKenzie’s choice as the initial keynote speaker of the conference might not seem self-obvious, I found Matt Kelly’s invitation to the General to speak and his position as the first speaker on the first day of the conference, were both inspired decisions.

The theme of his talk was how to maintain ethical leadership under difficult circumstances. Matt Kelly posed the question to the General of “how do you speak the truth to power?” The General began his remarks by giving his definition of leadership, which as he said was “getting people to do what they don’t want to do and having them enjoy it while they are doing it.” Based on that definition and his remarks below, I came to see why Matt wanted the General to speak to a gathering of compliance professionals on ethical leadership under difficult circumstances.

The General said that it all starts with a leader being him or herself, after they take the reins of leadership. He believes that people usually rise to a high level in an organization because of technical competence, coupled with the relationships they developed along the way. He believes that a leader must strive to maintain those relationships because that is the key to information flow both upwards to the top and down through the organization. A leader must take all pains not to become isolated.

The General believes that relationships work in several critical areas. The first is that a leader can utilize the talents of his subordinates to not only understand but to overcome obstacles. But equally important is that by having a relationship with someone, it may provide an avenue to resolve a matter before it blows up into a full financial reporting issue or even criminal issue. He said that he would try to find out the one thing that his troops were passionate about and he could use that information “as a window into what they think about the organization.”

He designated his next point with the acronym, LWWA, or ‘leading while walking around’. He said that to get people to do things, a leader must get out of the office and talk to people. But he cautioned that it is more than simply talking to people, as he believes a critical skill of a leader is to listen as well. To this skill, he said that rather than hear someone and think about what your response might be, you should actually listen to what they have to say. He found that by listening good ideas could come up to him and then he could implement them and get the credit.

The General talked about courage. By this he did not mean the courage to lead a charge up a hill, but rather, he meant the courage to say no and to hear someone who says no to you. He believes it is the job of a leader to set the tone for an organization. A leader must teach his subordinates to have the courage to disagree with him or as he said “disagree without being disagreeable”. If one of the first things you do in a leadership position is belittle or defame publicly someone who disagrees with you, no one will do so in the future.  For a leader to succeed, the General believes that a speak up culture must exist. To do so, a leader must make it acceptable and safe for subordinates to say no.

It is the job of a leader to accept responsibility. In an interesting exercise, the General asked the entire audience of over 500 conference participants to raise their hand if they had ever been criticized for being ‘too responsible’. He then asked anyone in the audience to raise their hand if they had criticized someone else for being ‘too responsible’. No one person raised their hand in response to either query. It is clear that the General believes a leader must take responsibility. Further, there is no ‘but’ which follows the line “I am responsible”. In other words, no ifs, ands, or buts are allowed when it comes to a leader taking responsibility.

The General said that one of the best ways he found to motivate people was to give them a job which had difficult but not impossible objectives to success. This has two benefits. The first was that most people would be motivated to try and achieve the difficult objective. However the second was more long term. By achieving the results, the person or team had something to brag about and it gave them greater confidence going forward. This is particularly true if there is a metric which can be used to demonstrate the overcoming of the obstacle. However, a leader must not set a high or unreasonable objective that it can only be achieved by “breaking the back of the organization.”

The General took some questions from the audience. One that I found applicable to the compliance arena was about resources. Specifically he was asked how to carry out missions with limited resources. He tied his answer back into his thoughts on relationship. He said that people want to contribute their ideas. If you give them a means to do so, in a speak up culture, they can be your best resource. An army has often times to do more with less and must do so on the fly. But this same concept translates to civilian employees who want their company to succeed and can stand ready with ideas to assist you moving forward toward your objective.

If you are a Chief Compliance Officer (CCO) or in a senior leadership position, you should think about the General’s remarks in the context of what you and how you do it, within your organization. Do you have relationships with other key members of senior management so that you can go to them, not only when things are going well, but more importantly when they are not going well or a crisis has arisen? Do you have a speak up culture at your company? If not why not, as that certainly is a part of any best practices compliance program under the Foreign Corrupt Practices Act (FCPA) or UK Bribery Act.

Lastly, think about the General’s remarks on resources. One never has all the resources you need or even think that you want. But use the talent that is available to you. There are other professionals in your company who do not work in the compliance department but are equally dedicated to doing business ethically and in compliance. Human Resources and Internal Audit are but two prime examples. Seek them out and ask their assistance. I think you may be well surprised at the solutions they can provide or suggest to you.

As I said, by the end of General MacKenzie’s talk, I had come to believe that Matt Kelly made an inspired decision not only to invite him to speak to the conference but to be the first speaker out of the box. It has set a great tone for the event.

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, 2013

10 Questions to Better Management Practices in a FCPA Program

One of the things that I sorely lacked when I worked in-house was any guidance on management practices towards the implementation of either legal or compliance initiatives. Most legal and compliance departments do not train their attorneys or compliance practitioners on management practices for compliance program implementation, enhancements or upgrades after a risk assessment. I was therefore very intrigued when I came across an article in the November issue of the Harvard Business Review, entitled “Does Management Really Work?” by Nicholas Brown, Raffaella Sadun and John Van Reenen. I found the article very useful because it gave succinct advice about what a business can do to improve its management practices and determined that this advice can be applicable to a compliance program.

The authors tested three essential practices which they believe can address even the most complex global problems. The three principles which they believe “are generally considered to be the essentials of good management” are:

• Targets: Does the organization support long term goals with tough but achievable short-term performance benchmarks?
• Incentives: Does the organization reward high performers with promotions and bonuses while retraining or moving underperformers?
• Monitoring: Does the organization rigorously collect and analyze performance data to identify opportunities for improvement?

You might read these and immediately think about Paul McNulty’s (Three) Maxims. I, however, believe that these three management practices can provide some assistance beyond McNulty’s queries. In the article the authors research showed that by the use of these three techniques businesses could not only set parameters but also measure on them, generally had more and better productivity and overall better financial health.

From the compliance perspective how can one use these three relatively straight forward techniques? Interestingly the authors revealed some of the questions used in interviews with over 8,000 manufacturers who were interviewed in this project. I have selected 10 questions which you might want to put use as a starting point for managing your compliance initiatives going forward as I believe that they are very good questions to use in formulating a plan for compliance program implementation or upgrade. I would challenge you to think about some of the answers to these questions in the context of your compliance program.

1. Interconnectedness of Targets – How are compliance goals cascaded down to individual workers? Everyone recognizes the importance of ‘tone-at-the-top’ as it is enshrined in the US Federal Sentencing Guidelines, the Department of Justice’s (DOJ) minimum best practices compliance regime and the UK Bribery Act’s Six Principles of an Adequate Procedures compliance program. However, as many commentators now recognize, it is also tone in the middle and at the bottom, which may equally matter. So how do you ascertain and ensure that top management’s message gets cascaded down into your organization?
2. Clarity and Comparability of Goals – Does anyone complain that your compliance targets are too complex? Certainly the initial role out of a compliance program can be quite a large undertaking. Perhaps another approach might be to focus on high risk areas and remediate them by rolling out initiatives to manage those risks first and then move to other areas. Many companies have reviewed and remedied the third party sales side of their business but are only now looking at the Supply Chain or Procurement side of the equation. If you work on one such problem at a time, it can help move the overall process forward in a more orderly fashion.
3. Consequence Management – How do you deal with repeated compliance failures in a specific business segment or compliance program area? This is certainly one question that you would want to consider carefully. Do you have problems with one business unit or one geographic area from the compliance perspective? Are gifts in China, for example, an ongoing issue for your company? What about travel and entertainment? Areas that show up again and again will merit more focused attention.
4. Instilling a Mind-Set – How do senior managers show that attracting and developing talent who will engage in ethical business conduct is a top priority? Here you should consider bringing in your Human Resources Department for not only assistance but their expertise. If top management will make a commitment to this, you should work to create the appropriate mind-set of doing business the right way throughout your organization.
5. Removing Poor Performers – How long is compliance underperforming tolerated? In many ways, this question is the flip side of number 4 above. I think that many companies would clearly say that they will discipline, up to and including discharge, any employee who engages in practices which violates the Foreign Corrupt Practices Act (FCPA) or UK Bribery Act. But this question drills deeper and forces a more rigorous analysis on not just FCPA failures by employees but poor ethical choices which may be less than full FCPA violations.
6. Unique Employee Value Proposition – What makes it distinctive to work at your company? More pointedly, how can your compliance challenges be turned into business leadership opportunities? Ethisphere annually shows that its top list of the Most Ethical Companies out performs the Standard & Poor (S&P) 500. If you can turn the distinctiveness of what your company does into a compliance plus in the marketplace, it could well make your business more profitable.
7. Continuous Improvement – How do compliance programs that are not working typically get exposed and fixed? There is a difference between auditing and monitoring. Monitoring is a commitment to reviewing and detecting compliance programs in real time and then reacting quickly to remediate them. A primary goal of monitoring is to identify and address gaps in your program on a regular and consistent basis. Auditing is a more limited review that targets a specific business component, region or market sector during a particular timeframe in order to uncover and/or evaluate certain risks, particularly as seen in financial records. A robust program should include separate functions for auditing and monitoring. While unique in protocol, the two functions are related and can operate in tandem. Monitoring activities can sometimes lead to audits.  For example, if you notice a trend of suspicious payments in recent monitoring reports from a country in the Far East, it may be time to conduct an audit of those operations to further investigate the issue.
8. Performance Tracking – What key compliance indicators do you use for compliance tracking? Here you need to look at the metrics which you have developed. A good starting point can be with your hotline or helpline. What can you determine from the calls or reports which come in through these systems? What if you have not had any reports for several years, what should that be telling you about your communication to your employee base? Or does it mean that people have not been properly and effectively trained that a hotline or helpline exists and is available for their use or, more ominously, are afraid to make any reports for fear of retaliation or even losing their jobs? This is certainly something you should take a good look into, whichever way the metrics are going for your company.
9. Performance Dialogue – For a given compliance problem, how do you identify the root cause?  If you do not know what the cause of a problem is, you cannot successfully work towards remedying that problem. This does not simply mean firing any persons involved in a potential FCPA violation. You need to dig down and found out what allowed this issue to arise. I once heard that the difference between Japanese and American post-incident investigations is that in the US there is an attempt to assess blame, conversely in Japan there is an attempt to find a solution to the problem. This is the approach that I believe compliance practitioners should take, to try and find a solution by determining the root cause of a compliance failure.
10. Retaining – What are you doing to retain your top employees from the compliance perspective? This is not a question that is typically asked in the compliance department. But one thing you can look at is what your company is doing to retain, promote and take to senior management those employees who do business in an ethical manner and in compliance with your company Code of Conduct.

I found the article to be very useful when applied to the compliance practitioner by not only using the triumvirate of targets, incentives and monitoring as a management practice but also the questions that the authors posed in the context of your company’s own compliance program. We continually face the challenge of keeping up with the ever evolving compliance best practices with little or no budget increase. I found that this article had points which you can ask yourself, and of your compliance program, which can facilitate a robust discussion that can highlight areas for improvement.

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, 2012

Ethical Leadership: Leading a Company Conversation on Compliance

Ethical leadership is absolutely mandatory to have a successful compliance program, whether it is based upon the US Foreign Corrupt Practices Act (FCPA) or the UK Bribery Act. Senior management must not only be committed to doing business in compliance with these laws but they must communicate these commitments down to the organization. But leadership is not limited only to senior management within an organization. Tone at the Top begets Tone in the Middle; which begets Tone at the Bottom. At each rung there is the need for compliance leadership. In an article in the June issue of the Harvard Business Review, entitled “Leadership is a Conversation”, authors Boris Groysberg and Michael Slind discuss how to improve employee engagement in today’s “flatter, more networked organizations.”

The authors posit that the issue of how leaders handle communications within their organizations is as important as the message. They believe that the process should be more dynamic and more nuanced and is a process that they term “conversational”. Building on this concept they suggest a model of leadership which they call “organizational conversation” which resembles ordinary person-to-person conversations. They believe that this model has several advantages, including that it allows a large company to function like a small one and it can enable leaders to “retain or recapture some of the qualities…that enable start-ups to out-perform better established rivals.” The authors have found four elements of organizational conversation which “reflect the essential attributes of an interpersonal conversation.” They are: intimacy, interactivity, inclusion and intentionality.

Intimacy: Getting Close

Here the authors appear to focus on two works: listening and authenticity. Recognizing that physical proximity may not always be feasible but emotional or mental proximity is required. They advise leaders to “step down from their corporate perches and then step up to the challenge of communicating personally and transparently with their people.” This technique shifts the focus of change from a top-down hierarchical model to a “bottom-up exchange of ideas.”

Interactivity: Promoting Dialogue

Interactivity should make a conversation open and more fluid. You can obtain this by talking with and not just talking to an employee. The purpose of interactivity builds upon the first prong of intimacy. The authors believe that efforts to close the gap between employees will founder if both tools are not in place along with institutional support which gives employees the freedom and courage to speak up. The authors believe that social media can be a useful tool to help foster such interactivity, but care must be taken to ensure that managers do not simply use social media as another megaphone. The authors suggest that more than just social media is required and that something extra is needed and that is social thinking.

Inclusion: Expanding Employees Roles

Following on intimacy is inclusion as intimacy should force a leader to get closer to employees while inclusion challenges the employee to play a greater role in the communication process. Inclusion expands on interactivity by enabling employees to put forward their ideas “rather than simply parrying the ideas that others present.” Clearly this is the prong that brings employee engagement into the communication process by calling on employees to “generate the content that makes up a company story.” Employees who become committed to a message can become the best brand ambassadors that a company can ever hope to have on its payroll.

Intentionality: Pursuing an Agenda

While the first three prongs of the authors’ model focuses on opening up the flow of communication, intentionality is designed to bring a measure of closure to the process. The goal here is to have voices merge into a single vision of what the company’s communication is for. In other words, the conversation should reflect a “shared agenda that aligns with the company’s strategic objectives” that will allow employees to “derive a strategically relevant action from the push and pull of discussion and debate.” The leaders role here is to “generate consent rather than commanding assent” for a strategic objective. The authors believe that this enables employees at the top; at the middle; and at the bottom to “gain a big-picture view of where their company stands” on any issue which has gone through the process.

The Box Score of Organizational Conversation

	Intimacy	Interactivity	Inclusion	Intentionality
Old Model: Corporate Communications	Information flow is primarily top down;Tone is formal and corporate	Messages are broadcast to employees;Print newsletters, memos and speeches	Top Execs create and control messaging;Employees are passive consumers of information	Communication is fragmented, reactive and ad hoc;Leaders use assertion to achieve strategic alignment
New Model Organizational Communications	Communication is personal and direct;Leaders value trust and authenticity	Leaders talk with employees, not to them;Organizational culture fosters back and forth, face-to-face interaction	Leaders relinquish a measure of control over content;Employees actively participate in organizational messaging	A clear agenda informs all communications;Leaders carefully explain the agenda to employees;Strategy emerges from a cross-organization conversations
What it means for employers and employees	Leaders emphasize listening to employees, rather than just speaking to them;Employees engage in a bottom-up exchange of ideas	Leaders use video and social media tools to facilitate two-way communication;Employees interact with colleagues through blogs and discussion forums	Leaders involve employees in telling the company story; Employees act as brand ambassadors and thought leaders	Leaders build their messaging around company strategy;Employees take part in creating strategy via specifically designed communication vehicles

Reading this article was a real eye-opener for me. I could not stop thinking about the possibilities for the compliance practitioner in using these techniques throughout an organization. Just think how employees might feel if senior management engaged them directly regarding compliance and how the company is going to do business ethically. As a compliance practitioner you can leverage this to seek more ideas from business unit folks on how to do compliance more efficiently and most probably with greater results for the company. Also imagine what it might do for employee moral if they thought that senior management “had their backs” when it came to being rewarded or even acknowledged for doing business the right way. The possibilities seem endless and you are only limited by your own imagination. But read the article, as I have only scratched the surface of the content that the authors have presented.

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, 2012

Star Wars Day and Leadership Lessons for the Compliance Professional

Last Friday, May 4 was Star Wars Day. According to Wikipedia, “May 4 is called Star Wars Day because of the popularity of a common pun spoken on this day. Since the phrase “May the Force be with you” is a famous quote often spoken in the Star Wars films, fans commonly say “May the fourth be with you” on this day.” So if you are like me and still consider “Star Wars IV-A New Hope” to be the first Star Wars movie or if you are of a different age as is my 15 year old daughter who says that the first Star Wars movie was “Star Wars I-The Phantom Menace”, I hope the force was with you last Friday.

I thought about this generational dispute in the context of leadership when I read an article in the Corner Office Section of the Sunday New York Times (NYT), entitled “How to Adopt Mentors Without Really Asking”. In the article reporter Adam Bryant interviewed Shellye Archambeau, the Chief Executive Officer (CEO) of MetricStream, which presented some of the leadership lessons that Archambeau has learned in her business career. I found that some of her points could be used by a compliance professional not only for his or her career but to further the goal of compliance leadership in your company.

Mentoring

Archambeau related that she had “a lot of mentors, and I just adopted them.” Rather than making a formal request for a person to be her mentor, she began to treat people like her mentors and she said that “it worked very well for me.” To begin such a relationship, she said that she would end a conversation with something along the lines of “I’ve just got a quick question for you. Any thoughts on how…” But they key is to use the information that is presented to you and then to acknowledge the assistance. By telling the person you are trying to recruit as a mentor that the advice was helpful, it gives the mentor a sense of the positive impact of their role and it is more likely that they will be open to having a more formal mentoring relationship.

Luke Skywalker may not have sought out Obi-Wan but he certainly sought out Master Yoda.

Leadership

Archambeau provided some examples of her leadership style which you may find useful to incorporate into her ideas about leadership into your company’s compliance program. The first is hire the right team but even with the right personnel in place, there must still be an emphasis on leadership. Archambeau discusses a leadership topic at the regular meetings of her senior staff. She stated that “it makes a difference, because through these leadership topics, I get to reinforce our culture, the style and what’s expected.”

She provided two examples of leadership challenges that she has addressed. The first is “don’t be a mama bear.” She explained that, “when people come to you with problems or challenges, don’t automatically solve them. As a mama bear, you want to take care of your cubs, so you tend to be protective and insulate them against all those things.” However, Archambeau does not believe that such an approach is helpful for an employee because if “you keep solving problems for your people, they don’t learn how to actually solve problems for themselves.”
To remedy this ‘mama bear’ tendency, she tries to ask the question or present the issue back to them, saying: “What do you think we should do about it? How do you think we should approach this?”

The second leadership issue that she discussed was one that she called “who’s got the ball?” Archambeau explained “that in sports, and the ball is thrown to you, then you’ve got the ball, and you’re now in control of what happens next. “ This means that not only are you in charge but you own it as well. It is important to establish “who’s got the ball. If you’re in a meeting and you’ve had a great conversation and then everybody leaves, who has the ball? It becomes a very visible concept for making sure that there’s actually ownership to make sure things get done.” However, as important is it is to know who has the ball it is equally as important how you got the ball in the first place? Because it is “one thing if you always catch the ball if people toss it to you. It’s another thing if you are proactively going after that ball. As leaders, you’ve got to make sure that you’re actually going after that ball.”

(SPOILER ALERT) Luke and Han Solo may not have initially sought out to destroy the Empire but by the end of the series they certain were the ones ‘asking for the ball’ when it came to attacking the Death Star.

Leading by Fear

Archambeau ended by noting that she does not believe that employees do well if the company environment is too harsh. She does not believe that people “when there’s fear. Maybe people aren’t physically afraid, but they feel fear. And when people are afraid, the whole chemistry in their body changes. You just can’t be as successful in that kind of environment. I think the best environments are when you enable people to actually perform their best, but you’re still clear about what’s expected.”

That sounds very much like the Darth Vader School of Leadership where each failure, ahem, ‘ended poorly’ for his direct report.

So depending on what generation you are, you may have a different idea about the lessons you might learn from the Star Wars series. For my money, Episodes IV-VI is what Star Wars is all about. But as my 15 year old daughter might say, “Dad, you are just too retro.”

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, 2012

Monty Python, the Holy Grail & Principle II of Adequate Procedures-Top Level Commitment

We conclude our UK theme this week by attempting to answer a question that has long concerned me. Why was it that the Knights of the Roundtable were searching for the Holy Grail? I mean, what would a chalice, first used in the Last Supper and then used to drain the blood of Jesus after crucifixion, being doing in Britain? The story is a bit convoluted but this is what I have learned this week; that is it is a part of the legend of King Arthur and it goes something like this.

Joseph of Arimathea, the man who brought down the body of Jesus from the cross after he was crucified, later brought the Holy Grail to Britain with him when he became the first Christian Bishop of Britain. It was hidden and could only be found by a righteous Knight, who turned out to be Sir Perceval. What I did not know was the Sir Perceval was actually the son of Sir Lancelot from a witch, who came to Sir Lancelot in the form of Lady Guinevere, who, nine months later, gave birth to a boy who later became the Knight Sir Perceval.

As I said, all quite confusing as there are apparently variations upon variations of this myth. I think I will just stick with the Monty Python and the Holy Grail version. At least we know how to answer the three questions to safely cross the Bridge of Death: (1) What is your name? (fill in the blank); (2) What is your quest? (I seek the Holy Grail.); and (3) What is the air-speed velocity of an unladen swallow? (see below)

All of this brings me to the UK Bribery Act and the Six Principles of an Adequate Procedures compliance program and today’s topic, Principle II – Top-level Commitment. The purpose of Principle II is to encourage the involvement of top-level management in the determination of bribery prevention procedures. Under Principle II the top-level management of a business; whether a board of directors, the owners or any other equivalent body or person, must be committed to preventing bribery by persons associated with it. This top-level of management should foster a culture within the company in which bribery is never acceptable. The UK Ministry of Justice (MOJ) Guidance comments that those persons who are at the top of a business “are in the best position to foster a culture of integrity where bribery is unacceptable.” The Guidance provides that top-level management commitment to bribery prevention is likely to include (1) communication of a company’s anti-bribery stance, and (2) an appropriate degree of top-level involvement in developing bribery prevention procedures.

I.                   Internal and external communication of the commitment to zero tolerance of bribery

The Guidance lists several steps that a company can take to establish this tone of top-level commitment to zero tolerance of bribery. There could be a formal written statement communicating this commitment to establish an anti-bribery culture within an organization. The Guidance recognizes that there could be several forms of communication, which might be tailored to different audiences within the company and could be generally available, for example on a company’s intranet and internet site. This commitment should be emphasized so as to draw employees’ attention on a periodic basis to this commitment.

The Guidance provides some touchstones regarding the types of concepts that a formal statement should include to demonstrate that the top-level commitment is viewed as effective:

• A commitment to carry out business fairly, honestly and openly, with transparency;
• A commitment to zero tolerance towards bribery and corruption;
• The negative consequences of breaching the policy for employees and managers;
• to those business partners the company might engage, explaining the consequences of breaching contractual provisions relating to anti-bribery and anti-corruption prevention;
• A statement of the positive benefits for both the company and its employees of the business benefits of rejecting bribery. This would include the reputation of the company with customers and the confidence of its business partners and the incentives for employees to do business in such a compliant manner;
• There should be a reference to the range of anti-bribery prevention procedures the company has or is putting in place, including any protection and procedures for confidential reporting of bribery such as anonymous reporting through a helpline or hotline;
• A clear communication that key company individuals and departments are involved in the development and implementation of the company’s anti-bribery and anti-corruption prevention procedures; and
• Reference to the company’s public facing involvement in any collective action against bribery and corruption in its same business sector.

II.                Top-level involvement in bribery prevention

The Guidance intones that effective leadership in bribery prevention will take a variety of forms appropriate for and proportionate to a company’s “size, management structure and circumstances.” In smaller companies this could mean that top-level managers be personally involved in initiating, developing and implementing anti-bribery and anti-corruption prevention procedures and critical decision making. Conversely, in a large multi-national, the Board of Directors should be responsible for setting bribery prevention policies, tasking management to design, operate and monitor bribery prevention procedures, and keeping these policies and procedures under regular review. The Guidance sets forth several elements which it believes are symptomatic of top-level engagement in a company’s anti-bribery and anti-corruption compliance effort. They include:

•  There should be top-level involvement in the selection and training of senior managers to lead anti-bribery work where appropriate;
• Top-level leadership on key measures such as a code of conduct;
• There should be top-level endorsement of all bribery prevention related publications;
• Top-level management should lead the company in awareness raising and encouraging transparent dialogue to ensure effective dissemination of anti-bribery and anti-corruption policies and procedures to employees;
• Top-level management should be engaged or involved in oversight of appropriate third party business partners;
• Top management should demonstrate leadership through relevant external bodies, such as industry trade groups or other similar organizations and the media, to help articulate both the company’s overall compliance efforts and industry commitment in the fight against bribery and corruption;
• There should be specific top-level involvement in high profile and critical decision making where appropriate;
• Top-level management must assure that not only an appropriate risk assessment is conducted but that it informs the company’s anti-bribery and anti-corruption compliance program and not the other way around; and
• Top-level management should have general oversight of breaches of procedures and the provision of feedback to the company’s Board of Directors or equivalent, where appropriate, on levels of compliance.

The MOJ Guidance once again provides solid detail on the elements which should go into your anti-bribery and anti-corruption compliance program. It also provides the basis for several different metrics that you can set up to measure how well top-level management is involved and engaged in your compliance regime.

As to the answer to the final question from Monty Python, it depends, “What do you mean? An African or European swallow? To see a clip of the three questions, click here.

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© Thomas R. Fox, 2012