Setting the “Tone at the Top” for FCPA and UK Bribery Act Compliance

Ed. Note-today we share the third in a series of Guest Posts by Michael Potorti, CPA on the role of an auditor in FCPA/UK Bribery Act Compliance.

In any organization, employees look to Management to set the example for them to follow. Almost all employees want to believe in a company and maximize their efforts to drive the Company forward to be the best it can be in a particular industry. They look to their leaders for guidance and advice and pay particularly close attention when Town Halls are held and Company-wide communications are released. I have consulted for many companies and I have witnessed this first hand – a common thread, if you will.

When it comes to FCPA and UK Bribery Act compliance, what better way to kick off your efforts than by having Executive Management use these forums and communications to drive the point home that ALL employees must comply. It sets the “Tone” that the Company takes pride in doing business ethically and will not tolerate offenses.

Here are some suggestions for setting the “Tone at the Top”:

1) Get Executive Management’s Buy In – to clarify that this is not “just another thing the Company needs to comply with”, meet with Management to educate them on the FCPA/UKBA. Give examples of recent judgments against companies that include hefty fines and jail time for some Executives. Ensure that the audience includes the Board of Directors and Executive Management.

2) Work with the Legal and Compliance Departments to include FCPA/UKBA compliance in the Company’s General Ethics Policy – these departments will be involved in the process to imbed FCPA/UKBA compliance within the organization so it is key to get their views on where the major risks are and what employees are expected to do going forward. Specific language should be inserted into the Ethics Policy and Standard Operating Procedures should be developed/amended to provide guidance on how to comply with the FCPA/UKBA.

3) Communication from CEO – a Company-wide communication should be issued by the CEO that points to Company guidance and encourages Mid-Management and all employees to cooperate with the imbedding of related internal controls and training efforts. The communication should specifically state that the Company expects that all employees will comply with the FCPA/UKBA and that Executive Management will have zero tolerance for offenders. A separate communication should be developed and distributed publically to all 3rd Party Agents, vendors, etc. stating the Company’s commitment to compliance.

4) Set up a Steering Committee – the committee should include Board Members and Executive Management and exist to monitor Project efforts to imbed internal controls and provide targeted training within the organization. Project status should be provided on a regular basis so that the Committee can help with any “roadblocks” or bottlenecks that develop. The Committee can also provide any new information to the Project team (i.e. newly uncovered instance of fraud) so efforts can be amended as necessary.

Executive Management must be on-board with the effort to make employees aware of the FCPA/UKBA and their impact on the Company for instances of non-compliance. Proactive efforts could save the Company huge cost and negative publicity in the long run.

Micheal Potorti can be reached at mpotorti@mp-audit.com.