Doing Compliance-The Book

I have consistently tried to bring a ‘Nuts and Bolts’ approach to my writing about compliance. Last year when describing some of my writing on the building blocks of a Foreign Corrupt Practices Act (FCPA) compliance program to my friend Mary Flood, she said “That’s great but what about actually doing compliance?” Fortunately for me, she did not ask how as there is no telling just how much hot water answering that question would have gotten me into! Her idea about writing a book which a compliance practitioner could use as a one-volume reference for the everyday work of anti-corruption compliance was the genesis of my most recent hardbound book, Doing Compliance: Design, Create, and Implement an Effective Anti-Corruption Compliance Program. I am pleased to announce that the book is hot off the presses and now available for purchase through Compliance Week in the US and Ark Publishing in the UK.

Just as the world becomes more flat for business and commercial operations, it is also becoming so for anti-corruption and anti-bribery enforcement. Any company that does business internationally must be ready to deal with a business environment with these new realities. My book is designed to be a one-volume work which will give to you some of the basics of creating and maintaining an anti-corruption and anti-bribery compliance program which will meet any business climate you face across the globe. I have based my discussion of a best practices compliance program on what the Criminal Division of the US Department of Justice (DOJ) and Enforcement Division of the Securities and Exchange Commission (SEC) set out in their jointly produced “FCPA – A Resource Guide to the U.S. Foreign Corrupt Practices Act”, the FCPA Guidance, the ‘Ten Hallmarks of an Effective Compliance Program.” The FCPA Guidance wisely made clear that there is no ‘one-size-fits-all’ approach when it stated, “Individual companies may have different compliance needs depending on their size and the particular risks associated with their businesses, among other factors.” Thus, the book is written to provide insight into the aspects of compliance programs that DOJ and SEC assesses, recognizing that companies may consider a variety of factors when making their own determination of what is appropriate for their specific business needs.

This book does not discuss the underlying basis of the FCPA, the UK Bribery Act or any other anti-corruption or anti-bribery legislation. I have assumed the reader will have a modicum of knowledge of these laws. If not, there are several excellent works, which can provide that framework. The book is about doing business in compliance with these laws. As with all Americans, I appreciate any list that is deca-based, so the format of 10 hallmarks resonates with me. I have used this basic ten-part organization in laying out what I think you should consider in your anti-corruption and anti-bribery compliance program. In addition to presenting my own views in these areas, I also set out the views of both FCPA practitioners and commentators from other areas of business study and review. The book includes the following:

Chapter 1 – Where It All Begins: Commitment from Senior Management and a Clearly Articulated Policy against Corruption  It all begins at the Top, what should management say and do? ‘Tone at the Top’ is a great buzz word but how does a company truly get the message of compliance down through the ranks? This chapter discusses the techniques management can use to move the message of compliance down through middle management and into the lower ranks of the company.

Chapter 2 – Some Written Controls: Code of Conduct and Compliance Policies and Procedures  The Cornerstone of your anti–bribery/anti-corruption compliance program is set out in your written standards and internal controls which consist of a Code of Conduct, Compliance Policy and implementing Procedures. This chapter discusses what should be in the written basics of your compliance program and how best to implement these controls.

Chapter 3 – For the CCO: Oversight, Autonomy, and Resources The role and function of a Chief Compliance Officer (CCO) in any compliant organization cannot be overstated. Simply naming a CCO is no longer enough to meet even the minimum requirements of best practices. One of the key areas that the DOJ will review is how is a CCO allowed to fulfill his role. Does the position have adequate resources? Does it have autonomy and support in the corporate environment? Does the Board of Directors exercise appropriate oversight? This chapter reviews the Compliance Function, Oversight, Autonomy and Resources and relates structuring the compliance function in an organization.

Chapter 4 – The Cornerstone of Your Compliance Program: Risk Assessment It all begins here, as a risk assessment is the road map to managing your compliance risk. The implementation of an effective compliance program is more than simply following a set of accounting rules or providing effective training. Compliance issues can touch many areas of your business and you need to know not only what your highest risks are, but where to marshal your efforts in moving forward. A risk assessment is designed to provide a big picture of your overall compliance obligations and then identify areas of high risk so that you can prioritize your resources to tackle these high-risk areas first. This chapter discusses what risks you should assess, the process for doing so and using that information going forward.

Chapter 5 – Getting Out on the Road: Training and Continuing Advice Once you have designed and implemented your compliance program, the real work begins and you must provide training on the compliance program and continuing advice to your company thereafter. This means that another pillar of a strong compliance program is properly training company officers, employees, and third parties on relevant laws, regulations, corporate policies, and prohibited conduct. However merely conducting training usually is not enough. Enforcement officials want to be certain the messages in the training actually get through to employees. The expectations for effectiveness are measured by who a company trains, how the training is conducted, and how often training occurs. This chapter discusses getting the message of compliance out to your employees.

Chapter 6 – Do As I Do & As I Say: Incentives and Disciplinary Measures Any effective compliance program will use a variety of tools to help ensure that it is followed. This means that you must employ both the carrot of incentives and the stick of disciplinary measures to further compliance. How can you burn compliance into the DNA of your company? Discipline has long been recognized as an important aspect of a compliance regime but more is now required. This chapter relates structuring compliance into the fabric of your company through hiring, promotion of personnel committed to compliance and how to reward them for doing business ethically and in compliance with the FCPA.

Chapter 7 – Your Greatest Source of FCPA Exposure: Third Parties and How to Manage the Risk Third Parties are universally recognized as the highest risk in any compliance program. Indeed it is estimated that well over 90% of all FCPA enforcement actions involve third parties. Therefore it is important how to manage this highest risk for an anti-corruption program. This chapter provides a five-step process for the investigation and management of any third party relationship; from agents in the sales chain to vendors in the supply chain.

Chapter 8 – How Do I Love Thee: Confidential Reporting and Internal Investigations In any company, your best source about not only the effectiveness of your compliance program but any violations are your own employees. This means that you must design and implement a system of confidential reporting to get your employees to identify issues and then have an effective internal investigation of any issues brought to your attention. Your own employees can be your best source of information to prevent a compliance issue from becoming a FCPA violation. This chapter provides the best practices for setting up internal reporting and investigating claims of compliance violations.

Chapter 9 – How to Get Better: Improvement: Periodic Testing and Review Once you have everything up and running you still need to not only periodically oil but also update the machinery of compliance. You do this through the step of continuous improvement, which is the use of monitoring and auditing to review and enhance your compliance regime going forward. A company should focus on whether employees are staying with the compliance program. Even after all the important ethical messages from management have been communicated to the appropriate audiences and key standards and controls are in place, there should still be a question of whether the company’s employees are adhering to the compliance program.

Chapter 10 – Should I or Shouldn’t I? Mergers and Acquisitions The last thing you want to bring in through an acquisition is another company’s FCPA violation for which your company must pay the piper; also known as buying a FCPA violation. Effectively managing your mergers and acquisitions (M&A) process can help you to identify risk areas in a potential acquisition and then remediate any issues in the post-acquisition integration phase. This chapter gives you the most recent pronouncements on how to avoid FCPA exposure in this key area of corporate growth and to use the M&A function to proactively manage compliance.

Chapter 11 – A Few Words about Facilitation Payments One of the key differences between the US FCPA and UK Bribery Act is that the US law allows facilitation payments. However, in today’s interconnected world, to allow one part of your company to make facilitation payments while UK subsidiaries or others covered by the UK Bribery Act are exempted out from your standard on facilitation payments has become an administrative nightmare. This chapter explores what is a facilitation payment, how the policing of your internal policy has become more difficult and some companies which have been investigated regarding their facilitation payments. It also provides guidelines for you to follow should your company decide to allow them going forward.

So with thanks to Mary Flood for the idea, Matt Kelly, the Editor of Compliance Week for the publishing platform and Helen Roche & Laura Slater and the rest of the team at Ark Publishing for getting me through the publishing process in a professional manner, I am published to announce that Doing Compliance: How to Design, Create, and Implement an Effective Anti-Corruption Compliance Program is now available for purchase.

You can purchase a copy of Doing Compliance: How to Design, Create, and Implement an Effective Anti-Corruption Compliance Program in the US by clicking here. You can purchase a copy of Doing Compliance: How to Design, Create, and Implement an Effective Anti-Corruption Compliance Program in the UK by clicking here.

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