FCPA Compliance and Ethics Blog

February 13, 2014

What is the Role of An Apology In Anti-Corruption Enforcement?

ApologyWhat is the most famous apology in literature? Plato’s Apology for Socrates certainly is in the conversation. In addition to presenting Plato’s views on his teacher, it is believed to be the most authentic account that has been preserved of Socrates’ defense of himself as it was presented before the Athenian Council. I thought about the change in the meaning of an apology in modern times whilst reading an article in the New York Times (NYT) DealBook column over the past few weeks on the subject of apologies.

This exploration of apologies began with two DealBook articles earlier this month. One was a guest article, entitled “Calling for an Apology Cease-Fire”, by Dov Seidman, founder of LRN, who has been tracking apology trends for many years. The second was by Andrew Ross Sorkin and was entitled “Too Many Sorry Excuses for Apology”. Seidman laid out the problem as follows, “I am also offended because there are some authentic, legitimate apologies that are sent forth into the world. But bad apologies drive out good, so that those who take their apologies seriously, and work tirelessly to live up to them, are dismissed along with the drivel. Apologies can and should be hugely important actions and mechanisms, blessed with enormous power and lasting impact. But they must be two-way exchanges of trust and healing that are open and transparent. It is because I mourn the loss of the genuine apology that I propose an apology cease-fire.”

Sorkin viewed the problem from a slightly different angle when he wrote, “But what should you do when you don’t think you should apologize but everyone else does? You know the situation: Leaders “apologize” but clearly don’t mean it because they don’t think they should be apologizing in the first place. They apologize to gain some good will from the public rather than defend the behavior that is being criticized.”

Seidman finds that most apologies today do not provide any substance behind them. He said “our values have been so distorted that most people – and I’m considering both prominent apologizers and the rest of us – operate as though the purpose of an apology is to get out of something with the minimum pain and suffering possible. So you tell the aggrieved party you’re sorry – that you regret stepping on their foot, stepping on their self-confidence or stepping on their insurance policy. They accept mechanically, and we all move on.”

Seidman believes there are five essential characteristics of an authentic apology and they are: 

  • They must be painful. If an apology doesn’t create vulnerability and isn’t therapeutically painful, it’s not an apology at all.
  • They must be authentic and not an excuse. An apology can’t have ulterior motives or be a means to an end.
  • They must probe deep into the personal or organizational values that permitted the offense. Apologizers need to conduct a “moral audit” by looking themselves in the mirror and asking, “How did I get here and how did I drift from the person I aspire to be?”
  • They must encourage feedback from the aggrieved. This includes truly opening up to input and two-way conversation during and after an apology, and embracing ideas as to how to improve.
  • They must turn regret into a real change in behavior. The new behaviors they elicit must be continuing, reinforced by a sustained investment in avoiding the same mistakes in the future.

I often use what I characterize as McNulty’s Maxims on questions that would be asked by a regulator in any Foreign Corrupt Practices Act (FCPA) enforcement action: (1) What did you do to prevent it?; (2) What did you do to detect it?; and (3) What did you do when you found out about it? I find that Seidman’s prescriptions for an authentic apology resonate with McNulty Maxim Number 3, which in many ways is the most important maxim. Did your company move forward to remediate the issue that caused the FCPA violation? What steps did you take? Did you terminate those responsible? Were there any internal penalties against senior management or the Board that oversaw the conduct in question? Was your company accountable?

Seidman ends his piece by suggesting that there be a new “apology metric” to determine how authentic and how effective an apology is over time. He states, “Let’s commit to demanding more from business and public figures — and from ourselves — when contrition is being pursued. It will not be easy. But by returning to a search for redemption that accepts its difficultly, we can rediscover its real possibility. I invite you to join me in continuing both a personal and public exploration of the authentic apology. Let’s hold ourselves accountable for restoring the value of a precious and noble commodity.”

Sorkin, coming at his piece from his reporter hat, proposes a complimentary approach. He has started an ““Apology Watch” on the DealBook website  and on Twitter using the hashtag #ApologyWatch. It is his hope that DealBook “readers will participate by helping us track new apologies and, more important, follow up on what companies, institutions and individuals have done post-apology.”

Should an apology be a part of any settlement of a FCPA enforcement action? If not, when is an apology appropriate for a corporate leader when his or her company admits to violations of the FCPA, UK Bribery Act, Chinese domestic anti-bribery laws or another other similar anti-corruption regimes? Indeed are there simply too many insincere apologies being made by corporate executives? I think that the answer falls within McNulty’s Maxim No. 3. For if your actions belie your words, it probably means that your words have no meaning and indeed are simply empty words. If that is true you may well end up with what Seidman portends, “For those caught in an empty apology, the results could be expensive and embarrassing.”

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, 2014

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