FCPA Compliance and Ethics Blog

February 19, 2013

Internal Advertising of Your FCPA Compliance Program

Spring training is upon us and I have always enjoyed this time of year because, as one might say, ‘hope springs eternal’ especially for baseball fans. But this year I have no hope for the Astros as they have cut their payroll even further and now have the Major League Baseball (MLB) low of $25 million. Sportswriters are opining that the only thing the Astros are in contention for this year is to beat the MLB record of losses in a season, now at the number of 120. Jim Crane, fresh from his redesign of the Astros uniform, played golf with President Obama this past weekend, so at least he has some money to spend.

I thought about the Astros and their advertising campaign that they have a plan to make the Astros competitive in 5 years or so whilst reading an article in the March issue of the Harvard Business Review (HBR), entitled “Advertising’s New Medium: Human Experience”, by Jeffery Rayport. In his piece, Rayport’s thesis is that “to engage customers, advertisers must focus on where and when they will be receptive” to your message. I think that his ideas can be used by a compliance practitioner to internally market not only a compliance program but the equally important message of compliance.

Rayport believes that advertising has traditionally been “ubiquitous but often poorly targeted, intrusive, ignored at best and actively rejected at worst.” Further, in a “media saturated world, advertising strategies built on persuading through interruption, repetition, and brute ubiquity are increasing ineffective.” He believes that advertisers must expand their definition of what advertising really is so that they can craft and place their messages so that they are not only accepted but welcomed by consumers. That sounds to me like a great goal for a compliance practitioner who is trying to sell the message of compliance throughout a world-wide based, international company.

Rayport says that a message should be less about its target and more about what you are doing for the target audience. In other words, how does the idea set out in the message “sustain and reward” affect the audience’s life? It must engage through “relevance and value”. So what does Rayport prescribe? He believes that there are four domains through which you can reach a target audience.

The Public Sphere

This is the area where we move from one place or activity to another, both online and off-line. Rayport suggests that public-sphere ads are effective through the use of one or more of four principles. (1) They are relevant in context – the message aligns with the consumer’s experience at the moment they encounter the advertising. (2) They help people reach personal objectives – this is advertising conceived as problem solving. (3) They are brand interventions – these enter consumers’ lives in targeted and useful ways and when they are needed. (4) They are engaging, refreshing, or compelling experiences – these address a specific practical function, but they can also exert influence in the remaining spheres. These four criteria should be a goal of every compliance training session. If you can help your company’s employees achieve their goals through compliance, you will go quite a long way towards selling not only your compliance program but also the message of compliance.

The Social Sphere

Rayport says that the social sphere “emphasizes broad diverse networks.” This is where we interact with and relate to one another. So messages in this sphere should help people, “forge new connections or enrich existing ones.” But it must appear at the right time and the right place to be effective. The message itself should address a specific need or problem but the key is that it facilitates social interactions. The message can both reinforce relationships and reinforce the brand. Think how powerful the compliance message could be if it met these criteria. One thing the recently released Foreign Corrupt Practices Act (FCPA) Guidance made clear is that gift-giving is not prohibited by the FCPA. You can provide gifts as tokens of esteem in parts of the world where this is a long-standing customer and practice. But I think the key is that you can tailor your message for your audience.

The Tribal Sphere

This is the area where will typically affiliate with groups to define or express our identity. It is an area of “more-focused social engagement”. But this sphere provides an opportunity to create a message that identifies with this group. Messages here must suit the “character and values of those involved” and “empower the individual.” While you may need to have some consistency across your company regarding your compliance message, this sphere would also suggest that the message in West Africa could be tailored to that market, rather than simply the same message that you give in the United States. I heard a very good example by Dan Chapman, Chief Compliance Officer (CCO) at Parker Drilling, who, when confronted with a question during overseas FCPA training about why people in his company should not bribe in a country where it was customary, explained how corruption was ruing the fabric of the country in question, and if the person asking the question did not engage in bribery and corruption perhaps he could be one step in bringing his country out of that sordid state.

The Psychological Sphere

This is the sphere is the “domain of language, cognition and emotion.” Here, Rayport believes that the message you send will serve as “shorthand for complex concepts, inspiring actions or triggering positive feelings.” Somewhat surprisingly, in the psychological realm, messages can provide, “new ways to articulate ideas, engender habit formation, guide reasoning and elicit emotion.” Rayport states that there are four different ways in which messages in this sphere can work. (1) Messages use language to establish a cognitive beachhead for a concept – the use of one or just a few more can convey a much longer and thoughtful message. (2) The message seeks to establish a habit – this means more than simply a thought of what to do, but how one should do it. (3) Such messages guide cognition – this means that messages can and should be both inspiring and practical. (4) Messages should connect on an emotional level – messages here should promote a frame of mind, in the psychological sense. Imagine if you could create a compliance message that worked on this level. Clearly this has been done by many large corporations in the area of safety, with such simply messages as ‘Safety First’ or ‘Do Safe Work’. I might suggest that you look at your company’s stated values. On the General Electric (GE) website it states that “The board expects GE directors, as well as officers and employees, to act ethically at all times and to acknowledge their adherence to the policies comprising GE’s code of conduct set forth in the Company’s integrity manual, “The Spirit & The Letter”. What if your message was simply “The Spirit & The Letter”? If an employee heard that and they immediately thought of acting ethically and adhering to your company’s compliance program, it could be quite a powerful message.

Rayport’s article provided many different ways for a compliance practitioner to think through how they might internally market a compliance program. For a company with large international work force, the traditional FCPA training may not be the only method for a compliance practitioner to reach the employees. As you begin to think of other ways to get out the message of compliance you could try some of Rayport’s ideas. As for the Astros, I would suggest that they take some of that TV money they are squirreling away and spend it on an upgrade.

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

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