FCPA Compliance and Ethics Blog

November 4, 2014

Tribute to Jack Bruce – Finding Talent to Support Your Compliance Function

Jack BruceJack Bruce died last week. He was simply one of the greatest rock and roll bassist of all-time, as in ever. He helped form Rock’s first super group Cream when he joined with guitarist Eric Clapton and drummer Ginger Baker to create some of the most memorable music from the 1960s forward. What is your favorite Cream song? Whatever it is Jack Bruce probably wrote it, and you probably thought it was Eric Clapton. For me its Badge with the most haunting bass solo opening of any song I can imagine. I once heard an interview with Jack Bruce and he said he understood what that solo meant to him but what he never anticipated and frankly could not understand was why it was so important to so many other people. That is just the way some music is; once it gets in your soul, it does not leave.

Jack Bruce was also the lead singer of Cream. Once again I am sure you thought it was Eric Clapton, who had much more fame throughout his career. Bob Lefsetz, in his blog post tribute, simply entitled “Jack Bruce”, said, “So, so long Jack Bruce, on the one hand you were born too young, before the Internet era, before everyone could know every detail of your life and hold you close to their bosom. That’s right, we know very little about Jack Bruce, just a few details, his music speaks for him, and ultimately that’s grand.”

I thought about just how little I knew about Jack Bruce, even in relation to his two Cream band-mates, in another context recently. This perspective is also British but comes to us from a very different source. Periodically the UK government declassifies very old documents; sometimes 30 years old, sometimes 50 years old, sometimes even older. This means that historians in particular and the public in general will receive new or supplemental information about past events. It also means that certain events from World War II (WWII) are still being discovered or even re-evaluated due to this declassification process.

Recently the UK government had another such release. One of the more interesting pieces was about a man named Eric Roberts. His tale was told in an article in the On Management column in the Financial Times (FT), entitled “The spy left out in the cold is a tale all bosses should read”, by Andrew Hill. Roberts was a lowly bank clerk at Westminster Bank, which he joined when he was 17. “He worked in various branches. He rose, but not very far, to be a lower-middle grade clerk, who took a couple of holidays in Germany and enjoyed ju-jitsu and judo. He had a family and lived near Epsom. In 1935, the bank sent him on a seven-week “machine accountancy” course. But he also worked undercover for MI-5, controlling and neutralizing hundreds of Nazi sympathizers and “fifth columnists in Britain, by himself”. Hill called him a “genius spy”.

The most surprising thing about Roberts was not his spy work for MI-5 on behalf of his country but something very different and something every Chief Compliance Officer (CCO) and compliance practitioner needs to consider in their respective role. Hill wrote, “The most interesting thing brought to light from the National Archives last week was the note from one of his managers, in answer to a request to release him for war work. It read: “What we would like to know here is what are the particular and especial qualifications of Mr. Roberts – which we have not been able to perceive – for some particular work of national military importance?”

Columnist Hill wrote, “there is something shocking about the dismissive ‘which we have not been able to perceive’ from his superior.” He goes on to state, “It raises the question of how many ‘geniuses’ are languishing with large organizations, and how those organizations can discover and use their neglected talent.” I thought about that in the context of a CCO, compliance practitioner and the compliance function in general. How many of us are very good at “recognizing the true depth of their staff”? However, for the compliance function in general I think this question has wider implications about the doing of compliance in an organization.

The success of a compliance function is largely an organization based on its ability to influence decisions and actions in a company. This means that the CCO, compliance practitioner and compliance function must work in collaboration with other groups in a company. In a top-down, command and control organization, it may be a matter of having the top management set the right tone. But often it is much more that something that simply.

Hill reports, “Studies of those influencers [within an organization] are rarely in positions that the formal hierarchy considers influential.” This insight is particularly important for the CCO or compliance practitioner who wants to leverage others in an entity to help move compliance forward. One of the best examples I can think of is around third party representatives. The FCPA Guidance makes clear that when it comes to a company’s sales-side representatives, “companies should have an understanding of the business rationale for including the third party in the transaction. Among other things, the company should understand the role of and need for the third party and ensure that the contract terms specifically describe the ser­vices to be performed.” I believe that the best person to fulfill this requirement is a business unit sponsor who not only knows what skills or services a third party can bring to your company but also why they should be used in the place of others who your organization may have a contract with or another outside third party.

But the role of a business sponsor does not end there. One of the five steps in the management of third parties is managing the relationship after the contract is signed. One of the ways to do this is through having your business sponsor be the first point of contact with a third party representative. This business sponsor can and should meet with the third party representative on a regular basis. This business sponsor might even be trained so that he or she could provide the very basics of first-line compliance training. Even at the very least, a business sponsor should be able to talk about your company’s values as reflected in your Code of Conduct, Code of Ethics or other statement of values. This business sponsor can even be trained to provide front-line audit services by spot reviewing invoices to ascertain that they meet requirements, the products or services have been delivered to your company and there are no charges that raise Red Flags. Once again your business sponsor does not have to be a subject matter expert (SME) on auditing but he or she should know your business well enough and, having written the Business Justification, understand why your company’s use of this third party is so business critical that they can at least evaluate the basics set down in an invoice.

This all drives home the need to recognize folks with potential in your organization and the ability to develop that talent. One of the keys in doing so for the CCO or compliance practitioner is to get out of the office and meet business unit employees. Hill believes that by simply getting out of the office and meeting with such employees, you can tie into the “powerful side-effect of encouraging trust between colleagues”. Hill ends his piece with the story of another English bank clerk who apparently showed some talents in other fields, the American TS Eliot, who worked at Lloyds. One bank officer said of Eliot that he “did not see why Eliot mightn’t even become Branch Manager” one day.

There is talent for a compliance function throughout your organization. But in the case of Westminster bank and its putative spy-in-residence Eric Roberts the bank did not even try to find out his talents.

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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