FCPA Compliance and Ethics Blog

May 4, 2015

The Who and Advanced Compliance Solutions

ACSLast week I was thrilled to see The Who on their 50th anniversary (and farewell) tour. It was a great night of watching Pete Townshend and Roger Daltrey work through their long career of great songs. Both were quite animated and clearly enjoyed working together. They ended their show with the classic Won’t Get Fooled Again from their iconic album Who’s Next. As the show ended they said their good-byes and it felt like saying good-bye to a very long time friend.

I thought about this farewell as an introduction to my new compliance consulting company, Advanced Compliance Solutions (ACS), which I have founded to help me better serve the compliance field going forward. ACS allows me to focus more on issues unique to the Foreign Corrupt Practices Act (FCPA), UK Bribery Act and other similar anti-bribery and anti-corruption laws. In this post I wanted to highlight some of the current offerings that I am able to make through my new entity.

My new website, http://www.advancedcompliancesol.com, and consulting company are designed to guide you through the creation, implementation and enhancements for a best practices compliance program. (Big shout our to Rebecca Rosen and her team at Sales Enabled for the design.) Operating a global company, large or small presents its challenges. And while you may assume that your employees share your commitment to your values and ethical practices, how business is done country-to-country varies. How individuals chose to conduct themselves varies, too. The key is that you should evaluate your risks and then manage them through your Code of Conduct and compliance program.

Your Code of Conduct and compliance program needs to reflect not only your mission and values, but also needs to account for the numerous cross-border regulations that your company is obligated by law to follow. Your Code of Conduct and compliance program must not only specify what is and is not acceptable operating behavior, it must also provide a mechanism for employees to report code violations. And it must address the risks associated with what your business does, where and how it operates and with whom you do business. While not freeing you from legal exposure, a well thought out, communicated, trained and maintained code of conduct and compliance program can minimize your exposure to risk and minimize your penalties should a violation occur.

One of the prime focus areas for ACS is risk management. For example in the arena of mergers and acquisitions (M&A) risk management requires an evaluation of the target’s risk profile, followed by the creation and implementation of a work plan that incorporates ongoing review policies. These plans need to be tailored to the risks or red flags identified, essentially enhancing compliance and ethics policies and programs and internal controls both pre and post-closing. By finding red flags early in the process or later pre-closing allows the acquiring company to renegotiate purchase terms to account for potential anti-corruption issues. If the red flags are prevalent and serious enough they may even suggest cancelling the transaction. ACS can assist your company to properly identify and manage the risks of an international transaction, enabling you to pursue profitable business endeavors.

What are some of the key risk factors you should consider? Some are as follows:

  • Business Development – Does the seller provide gifts or other incentives to encourage purchase, like travel, gifts or entertainment?
  • Compliance Programs – Has the seller implemented anti-corruption policies and procedures and if so are they adequate?
  • Geography – Does the seller, either by itself or through third parties, operate or conduct business in countries that score poorly on the Transparency International’s (TI) Corruption Perception Index (CPI)?
  • Government Business – To what extend does the seller’s revenues rely on government licenses, permits and other authorizations?
  • History – Does the seller have a history of suspicions or corruption allegations?
  • Industry – Historically has the industry been the focus of heavy anti-corruption enforcement?
  • Third Party Intermediaries – How reliant has the seller been on third parties in dealing with government officials for business development efforts?

ACS is designed to help you do so, in a timely and cost effective manner.

One lesson learned from the Morgan Stanley Declination was that there are things you can do to enhance your compliance program which do not cost a lot of money and do not induce compliance fatigue. Prominently featured in the Declination was an item named as the ‘compliance reminder’, which was related to email reminders that were sent out to the then Managing Director, Garth Peterson, who was convicted of violating the FCPA.

Over seven years, Morgan Stanley sent out 35 emails reminding employees of the firm’s Code of Conduct, policy against conflicts of interest and about FCPA compliance. Based on this information, I developed, in conjunction with Maurice Gilbert of Corporate Compliance Insights (CCI), 10 short videos about compliance topics that can be sent out to employees via email. Each video is from 3-5 minutes in length and concerns an issue relevant to anti-corruption compliance. The topics are basic enough to provide an introduction into the FCPA, UK Bribery Act or other law and are informative enough to provide substantive information to any employees you might send them to.

The topics include: What is the FCPA?; Anti-Corruption Enforcement Across the Globe; What is the Intersection Between the FCPA, Anti-Corruption and Corporate Ethics? FCPA Enforcement Actions – Case Studies on the Good and Bad; Why Do the DOJ and SEC Both Enforce the FCPA? What FCPA Issues Are Raised by Your Sales Structure? How to establish an effective compliance program; How to conduct a business and risk assessment; and Special topics and issues under the FCPA. You can purchase and download each of these videos directly for use as compliance reminders in satisfaction of the guidance provided by the Morgan Stanley Declination.

The new website also contains a listing of the books I have written which you can click through to order. And finally, a note about speaking engagements. I can speak directly to your FCPA compliance issues or more broadly on compliance and ethical leadership. So if you need an expert to speak at your next corporate event, give me a call.

I was more than excited to see The Who play last week. It was a sad at the end but they and their music will always live in my heart. But I am equally excited to announce my new compliance consulting venture. I can bring a level of expertise and efficiency to your compliance needs that cannot be rivaled. When you retain ACS, you can be assured that I will be working on your project. So give my new website a look and I would enjoy hearing what you think about it. And while you are at it, consider Advanced Compliance Solutions for your next compliance project.

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, 2015

Blog at WordPress.com.