Social Media Week Part V – Tools and Apps for the Compliance Practitioner

To conclude this week’s posts, I wanted to list some of the more prevalent social media tools, explain what they are and how you might use them in a compliance program. (As usual I got carried away so this series will conclude on Monday of next week.) You need to remember that your compliance customer base are your employees. The younger the work force, the more tech savvy they will be and the more adapted to communicating through social media. According to Social Media Examiner’s 2015 Social Media Marketing Industry Report, the top two social networks for marketing are Facebook and LinkedIn. The three social media tools that hold the top spot for social media planning are LinkedIn, YouTube and Twitter. Marketers report that video streaming is becoming increasingly important tools for markets and that is currently encompassed in Meerkat and Periscope. Finally, I would add that Pinterest is another hot social media app.

Facebook

If you do not know what Facebook is at this point, you may have just transported down from a Borg Cube or perhaps you are a Vulcan looking for First Contact. This is the world’s most ubiquitous social media tool. It combines both personal and business applications. For the compliance practitioner, think about the business uses of Facebook. You can open a Facebook page for your compliance function and share an unlimited amount of information. Equally importantly, you can be responsive when employees comment on your posts, it allows you to interact with them and demonstrate that compliance is listening and responsive. The more regularly you post, the more opportunity you have for connecting with your employee base and building trust.

YouTube 

Much like Facebook, YouTube is one of the most ubiquitous social media tools around. It allows you to upload video and audio recordings for unlimited play. For the compliance practitioner, why not consider creating a YouTube channel for your company’s compliance program. You can put together full training on specific issues or you can create short videos. For an example of short videos, you can check out the training videos I have on my website Advanced Compliance Solutions. If there is any information that you wish to put into a visual format, YouTube is one of the best solutions available to you.

LinkedIn

LinkedIn is almost as ubiquitous as Facebook and YouTube. As with Facebook, you can set up a business site or even a private compliance group for your organization. Your employees are the best place to start adding followers, as they are not only your target audience but they are also your biggest advocates. You can encourage employees to add their compliance profile to their personal profiles. By doing so, they automatically become followers and can like, comment on, and share your company updates to help expand your viral reach. As with Facebook, LinkedIn provides you a platform to communicate with your employee base. It has a chat function that can be used to solicit feedback and comments going forward. You can also tie in with or ‘link to’ other groups and people that can facilitate not only creating but also expanding your culture of compliance.

Twitter

Earlier this week, I wrote about how you can use Twitter to capture information from the marketplace of ideas. However Twitter can also be used for communicating with your employee base. Tweets are publicly visible by default, but senders can restrict message delivery to just their followers. Users can tweet via the Twitter website, compatible external applications or by Short Message Service (SMS) available in certain countries. Retweeting is when users forward a tweet via Twitter. Both tweets and retweets can be tracked to see which ones are most popular. Finally, through the use of hashtags (#) users can group posts to Twitter together by topic.

I believe that Twitter is one of the most powerful tools (and completely underused tools) that is available to the compliance function. If employees follow their company’s name through a hashtag, they can see what trending topics other employees are discussing. Compliance practitioners can help lead that internal discussion through the same technique. Moreover, if the Chief Compliance Officer (CCO) or compliance function regularly monitors Twitter they can keep abreast of any communications and those can be used as a backup communication channel, in case the company hotline or other reporting system is not immediately available or even convenient.

Meerkat and Periscope

Two of the newest and perhaps coolest tools a CCO or compliance practitioner can utilize in the realm of social media are Meerkat and Periscope. Both tools allow you to tell a compliance story in real time, throughout your organization and beyond through the capture and broadcast of video, live through your smartphone. They are both live streaming apps that enable you to create a video and open the portal to anyone who wants to use it. Anybody in your Twitter community can click on that link and watch whatever you’re showing on your phone. The big piece is the mobile aspect. It is as simple as a basic tweet and hitting the “stream” button.

This is one of the more exciting new social media tools I see for the compliance practitioner. You could start a compliance campaign along the lines a campaign that the company Hootsuite initiated called “Follow the Sun” using Periscope. They decided to let their employees showcase what they called #HootsuiteLife. They gave access to different people in every company office around the globe. Throughout the day, it would “Follow the Sun,” and people in different offices would log into the Hootsuite account and walk around and show off their culture, interviewing their friends, etc. They talk about the importance of culture and now they are proving it. The number of inbound applications drastically increased after people got that sneak peek into their company. You could do the same for your worldwide compliance team.

You can live stream video training around the globe. Moreover, if you use either of these tools in conjunction with internal podcasting or other messaging you can create those all important “Compliance Reminders” which were so prominently mentioned in the Morgan Stanley Foreign Corrupt Practices Act (FCPA) Declination. The videos that you create with both of these tools can be saved and stored so a record of what you have created can be documented going forward.

Pinterest

According to Pinterest for Dummies, this tool is an online bulletin board, a visual take on the social bookmarking site, where the content shared is driven entirely by visuals. In fact, you cannot share something on Pinterest unless an image is involved. When you share something on Pinterest, each bookmark is called a pin. When you share someone else’s pin, it’s called a repin. Your group pins together by topic onto various boards, aka pinboards, in your profile. Each board mimics a real-life pinboard. You can share images you find online, or you can directly upload images. Using the “Pin It” button, you can share directly in your browser from any web page. You can also share your pins on Twitter and Facebook.

Although a relatively new social media tool, I find it to be one of the more interesting ones for use by the compliance function as it compliments many of the other tools I discussed above. You can set up your compliance account for your organization and pin items, lists, or other visual information that can be viewed and used by employees. In addition to the enumerated items, you can pin such things as a link, a website, graphics or other forms of information. If you think of it as an online bulletin board, you can consider all of the compliance information that you can post for your customer base and the interactions they can have back with you.

All of these tools can help you as CCO or a compliance practitioner to engage with your customer base. On Monday, I will conclude with some final thoughts on why the compliance function should use social media tools available to them.

Once again please remember that I am compiling a list of questions that you would like to be explored or answered on the use of social media in your compliance program. So if you have any questions email them to me, at tfox@tfoxlaw.com, and I will answer them within the next couple of weeks in my next Mailbag Episode on my podcast, the FCPA Compliance and Ethics Report.

 

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

Social Media Week Part IV – Telling a Story About Honey

I continue my exploration of the use of social media in doing compliance by taking a look at a very innovative social media solution to a difficult compliance issue around, of all things, honey. This example shows how creative thinking by a lawyer, in the field of import compliance, led to the development of a software application, using some of the concepts that I discussed earlier in the week around social media. Once again demonstrating the maxim that lawyers (and compliance practitioners) are only limited by their imagination, the use of this software tool demonstrates the power of what social media can bring to your compliance program.

This innovation contrasts with a reader’s comment earlier this week when I began my series on the use of social media in doing compliance. The comment was that this reader’s company, while actively using social media to reach, communicate with and receive information back from its customer base; did not allow employees to access Facebook, Twitter, Pinterest, Snapchat and a whole host of other social media sites on company purchased computers. While the company’s stated reason was security, the true reason is that they simply did not trust their employees not to “waste time” by accessing such sites during work hours.

Such corporate attitudes, while clearly from the time of the dinosaurs, unfortunately still exist. Companies need to understand that social media is a tool which can and should be used affirmatively. Like any tool, it can be abused but if you cannot trust your employees not to goof off (1) they probably should not be your employees and (2) the company is a lousy manager; so there is lots of opportunity for growth. It reminds of when I was working for a corporation back in 2004 and they did not want employees to have company issued cell phones, because you know they might use them for personal use. The bottom line is that social media is here to stay. Millennials and others are only going to communicate through that medium so if companies want to stay relevant, not only with products and services but also with their employee base, they need to understand that social media is an important and significant tool of the future. But enough of my mini-Howard Sklar rant.

Gar Hurst, a partner in the law firm of Givens and Johnston PLLC in Houston, faced an issue around US anti-dumping laws for honey that originated in China. The US Government applies anti-dumping trade sanctions to goods from a particular country. They do this when a domestic interest group alleges and proves, at least theoretically, that the producers in a foreign country are selling their goods into the US market at below fair-market value. By doing this, they are harming the US domestic industry. The dumping duties, which can result from this, can easily be 100, 200, even up to 500 % of import duties. To get around the anti-dumping laws, importers would ship Chinese originated honey to Indonesia, Vietnam or some other country and pass it off as originating from one of those locations.

The problem that Hurst’s client faced was how to prove the honey did not originate from China. In an interview, Hurst said, “We were working with a Southeast Asian honey producer. They were in this situation where Customs was essentially treating them as though they were a Chinese producer. We’ve provided them documents. We’ve provided them invoices. We’ve provided them production docs. We’ve provided them all sorts of documents but there was nothing that we could give them documentary that they didn’t believed could be fake. That was the problem, documents on their face are just a form of testimonial evidence. Meaning, somebody somewhere said, this stuff is actually from the Philippines. It’s only as good as the word of the person who wrote it on. We needed something that would get beyond that problem.”

So using awareness around communications through a smart phone, Hurst and his team came up with an idea “that with the explosion of smartphone technology which is in the hands of basically everybody in the United States and soon to be everyone in the world, these devices basically allow a person to take a picture that is geo-tagged and time and date stamped and then upload that picture to a database in the cloud. Effectively, that’s what we did.” As Hurst explained the process which they came up it was amazingly simply, “We basically created an app that resided on Android phone that they could then go around and document the collection of all these various barrels of honey and its processing. Every time they take a picture, it would be time and date stamped with geo-tagging as well. You know when and where a picture of a particular barrel of honey which we would label with some special labels so you could identify it when and where that was taken.” The product they came up with is called CoVouch.

From there the information is uploaded into a secure database that Hurst and his team created in the cloud. His firm then took all of the evidence they had documented that the honey originated in Indonesia, not China, and presented it to the US Customs service to show his client had not sourced its honey in China. In version 2.0 Hurst and his development team are creating a searchable database which US Customs can use to make spot checks and other determinations.

Recognizing the level of technical sophistication of honey farmers in Asia, CoVouch is amazingly simply to use. It takes pictures, puts time stamps on them and puts geo-tags that show the location where the picture was taken and with glued or pasted on bar codes, you can trace the shipment of honey throughout its journey. But it does so in a way that tells a story. Hurst said, “you’re telling the story but the provenance, if you will, of one imported barrel of honey and how did it get to where it’s at. It’s different. Yeah, that’s right. That’s exactly what we’re trying to do and trying to do it in a way that is easy enough so that, as you put it, a fairly, uneducated farmer in Indonesia can do it and a busy Customs agent in the United States can review it.”

Such a software system uses the concepts around social media to make a honey farmer a provider of documents evidence, through photographs, to meet US anti-dumping laws. But I see the application as a much broader tool that could be used by anyone who needs to verify information on delivery, delivery amounts, delivery times and delivery locations. This could be a field hand who is delivering chemicals even West Africa and does not know how to speak English. Hurst pointed to uses around whether something might be eligible for special import or export regulations due to NAFTA, whether restricted trade goods, such as those used in the oilfield industry, worked their way into Iran and even applicability under the Buy American Act around the US content in goods.

For the anti-corruption compliance practitioner, you could use such a tool to not only receive information, and more importantly photographic evidence, but you could also deliver information. But the key is that you are only limited by your imagination. CoVouch could be a tool that you use internally for delivery of information and receipt of information inside your company.

Tomorrow I will end my weeklong exploration of the use of social media in your compliance program by discussing some of the more common social media applications and how you might use them.

Once again please remember that I am compiling a list of questions that you would like to be explored or answered on the use of social media in your compliance program. So if you have any questions email them to me, at tfox@tfoxlaw.com, and I will answer them within the next couple of weeks in my next Mailbag Episode on my podcast, the FCPA Compliance and Ethics Report.

To check out the CoVouch website, click here.

To listen to my podcast with Gar Hurst, go to the FCPA Compliance and Ethics Report, Episode 181, 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, 2015

Social Media Week Part I – Using Social Media In Your Compliance Program

Welcome to Part I of Social Media Week. I recently did a webinar, hosted by The Network, on the use of social media in your Foreign Corrupt Practices Act (FCPA) compliance program. The response was as great as almost any other webinar in which I have participated. Based upon the overwhelming feedback, this week I will post a series of blogs on the use of social media in your compliance program. In Part I, I begin with a discussion of why you should integrate social media into your compliance program.

I have been studying the business side of social media for some time now as a way to help understand how I might more effectively and more creatively bring the message of doing compliance to my readers and podcast listeners. This led me to think about the message of compliance inside of a corporation and how it is distributed. In a compliance program, a large portion of your consumers/customers are your employees. Social media presents some excellent mechanisms to communicate the message of compliance going forward. Many of the applications that we use in our personal communication are free or available at very low cost. So why not take advantage of them and use those same communication tools in your internal compliance marketing efforts going forward.

On the Social Media Examiner site, which brands itself as “Your Guide to the Social Media Jungle”, is a podcast entitled “Social Sharing: How to Inspire Fans to Share Your Stories”, hosted by Michael Stelzner, Chief Executive Officer (CEO) and Founder of the site. In the podcast Stelzner interviews Simon Mainwaring, author of “We First: How Brands and Consumers Use Social Media to Build a Better World”, who said that to allow them to market successfully there are three key components, (1) Let your employees know what you stand for; (2) Celebrate their efforts; and (3) Give them a tool kit of different ways to participate. I think each of these concepts can play a key role for the compliance practitioner in internally marketing their compliance program.

Let Your Employees Know What You Stand For

In the FCPA Guidance, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) said that the basis of any anti-corruption compliance program is the Code of Conduct as it is “often the foundation upon which an effective compliance program is built. As DOJ has repeatedly noted in its charging documents, the most effective codes are clear, concise, and accessible to all employees and to those conducting business on the company’s behalf.” That well known @CodeMavencc, Catherine Choe, has said that she believes “Two of the primary goals of any Code are first, to document and clarify minimum expectations of acceptable behavior at a company, and second, to encourage employees to speak up when they have questions or witness misconduct.”

But more than the Code of Conduct, does your company really communicate that it stands for compliance? Obviously formal anti-corruption training under the FCPA is important but I think that more is required to reinforce that your company has a culture of compliance throughout the organization. In other words, are you communicating what you stand for and not simply the rules and regulations of a compliance program?

Celebrate Their Efforts

Once again the FCPA Guidance speaks to the need to incentivize employees in the company realm. The Guidance states, “DOJ and SEC recognize that positive incentives can also drive compliant behavior. These incentives can take many Guiding Principles of Enforcement forms such as personnel evaluations and promotions, rewards for improving and developing a company’s compliance program, and rewards for ethics and compliance leadership. Some organizations, for example, have made adherence to compliance a significant metric for management’s bonuses so that compliance becomes an integral part of management’s everyday concern.” But more than simply incentives, it is important to “[M]ake integrity, ethics and compliance part of the promotion, compensation and evaluation processes as well.”

Mainwaring’s concept means going beyond incentivizing. To me his word ‘celebrate’ means a more public display of success. Financial rewards may be given in private, such as a portion of an employee’s discretionary bonus credited to doing business ethically and in compliance with the FCPA. While it is certainly true those employees who are promoted for doing business ethically and in compliance are very visible and are public displays of an effective compliance program. I think that a company can take this concept even further through a celebration to help create, foster and acknowledge the culture of compliance for its day-to-day operations. Bobby Butler, at Universal Weather and Aviation, Inc., has spoken about how his company celebrated compliance through the event of Compliance Week. He said that he and his team attended this event and used it as a springboard to internally publicize their compliance program. Their efforts included three separate prongs: they were hosting inter-company events to highlight the company’s compliance program; providing employees with a Brochure highlighting the company’s compliance philosophy and circulating a Booklet which provided information on the company’s compliance hotline and Compliance Department personnel.

Give Your Employees a Tool Kit For Compliance

Obviously a key component of any effective compliance program is an internal reporting mechanism. The FCPA Guidance states, “An effective compliance program should include a mechanism for an organization’s employees and others to report suspected or actual misconduct or violations of the company’s policies on a confidential basis and without fear of retaliation.” The Guidance goes on to also discuss the use of an ombudsman to address employee concerns about compliance and ethics. I do not think that many companies have fully explored the use of an ombudsman but it is certainly one way to help employees with their compliance concerns. Interestingly, in an interview in the Wall Street Journal (WSJ) with Sean McKessy, Chief of the SEC’s Office of the Whistleblower, he stated, “What I hear is that companies are generally investing more in internal compliance as a result of our whistleblower program so that if they have an employee who sees something, they’ll feel incentivized to report it internally and not necessarily come to us.”

Two of the newest and perhaps coolest tools a Chief Compliance Officer (CCO) or compliance practitioner can utilize in the realm of social media are Meerkat and Periscope. Both tools allow you to tell a compliance story in real time, throughout your organization and beyond. They are both live streaming apps that enable you to create a video and open the portal to anyone who wants to use it. Anybody in your Twitter community can click on that link and watch whatever you’re showing on your phone. The big piece is the mobile aspect. It’s as simple as a basic tweet and hitting the “stream” button.

However, there are a wide variety of social media tools available that you can incorporate into your compliance program. Apps like Pinterest, Snapchat, Instagram and others may seem like tools that are solely suited to personal use. However their application is much broader. Over the next week, I will be exploring some of these apps and tools and how they might be used in doing compliance. As with many ideas in the compliance space, a CCO or compliance practitioner is only limited by their imagination. For these apps, they can be most useful when you tell the story of compliance in your company. Hootsuite did a campaign called “Follow the Sun” using Periscope. They decided to let their employees showcase what they called #HootsuiteLife. They gave access to different people in every company office around the globe. Throughout the day, it would “Follow the Sun,” and people in different offices would log into the Hootsuite account and walk around and show off their culture, interviewing their friends, etc. They talk about the importance of culture and now they are proving it. The number of inbound applications drastically increased after people got that sneak peek into their company.

Yet there are other tools available, at no cost, and can be downloaded onto a mobile device such as a smartphone or iPad. These include the O’Melveny & Myers LLP Foreign Corrupt Practices Act Handbook; which concentrates solely on the FCPA and is primarily a new vehicle to distribute content it already makes available upon request. This content includes O’Melveny’s FCPA Handbook and In-House Counsel’s Guide to Conducting Internal Investigations. In addition, the app features five resource sections that serve as an interactive, illustrative directory with titles ranging from ‘O’Melveny Authored Client Alerts’ to ‘DOJ Opinion Releases’.

Another approach is found in the Latham & Watkins LLP’s AB&C Laws app which takes an international approach to anti-corruption and anti-bribery laws, with the content focused on organizing and easing access to statutes and regulatory guidance according to specific fields of interest, from legislative frameworks to extra-territorial application to enforcement and potential penalties. It also includes official guidance such as steps (where available) that can be taken to reduce the risk of liability for bribery and corruption.

There is much to be learned by the CCO and compliance practitioner from the disciplines of marketing and social media. These concepts are useful to companies in getting their sales pitches out and can be of great help to you, the CCO or compliance practitioner, in collaborating and marketing throughout your company. I hope you will follow this week’s Use of Social Media series as I will endeavor to provide to you not only with a discussion of some new tools which you can incorporate into your compliance program going forward but also a different way to think about who your customers are and how you are reaching them with your message of doing compliance.

Finally, I am compiling a list of questions that you would like to be explored or answered on the use of social media in your compliance program. So if you have any questions email them to me, at tfox@tfoxlaw.com, and I will answer them within the next couple of weeks in my next Mailbag Episode on my podcast, The FCPA Compliance and Ethics Report.

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

Both Sides Now and Asking the Right Compliance Questions

One of my favorite singers has always been Judy Collins. Like most of us, I was introduced to her through her interpretation of Joni Mitchell’s song Both Sides Now which she released in 1967. Joni Mitchell did not record her own version of this song until 1969. It was not until the 1990s that I became aware that Mitchell’s inspiration for the song was that she gave up a child she bore out of wedlock in the early 1960s. She managed to put all that pain into one of the most beautiful ballads I have ever heard. I also did not know that Judy Collins was the inspiration for the Crosby, Stills, Nash & Young song Suite: Judy Blue Eyes until I read an article about her in a recent Wall Street Journal (WSJ) article in Weekend Confidential column by Alexandra Wolf, entitled “Judy Collins”.

I thought about how long I mis-understood the genesis and import of these two songs when I read a recent article in the Winter 2015 edition of the MIT Sloan Management Review, entitled “The Power of Asking Pivotal Questions” by Paul J. H. Schoemaker and Steven Krupp. The authors posit that “In a rapidly changing business landscape, executives need the ability to quickly spot both new opportunities and hidden risks. Asking the right questions can help you broaden your perspective — and make smarter decisions.” Their findings showed that to help managers make better decisions they needed to (1) examine broad market trends and less visible undercurrents; (2) seek out diverse viewpoints to allow multiple views of complex issues; and (3) actually push back if consensus comes together too quickly. They posed six questions, which I believe have some direct insights and are important for the Chief Compliance Officer (CCO) or compliance practitioner so I have adapted their findings directly for the compliance function.

Think Outside In. The authors ask, “How well do you understand the implications of broad market trends and less visible undercurrents for your business and for upcoming strategic choices?” Here I think compliance practitioners need to understand not only what your business does but equally importantly where it is going. This is also true about where compliance itself is going as the Department of Justice (DOJ) now requires that companies which enter into Deferred Prosecution Agreements (DPAs) keep abreast of both technological innovations and also industry trends in compliance. To engage in some of the authors’ suggestions, you need to go to conferences outside the compliance function and to leverage your current networks and join new ones.

Explore Future Scenarios. In this query, you will need to consider, “How thoroughly have you analyzed major external uncertainties and future scenarios that could significantly impact your business decisions?” The authors point to war-gaming as an example of scenario planning. While a CCO may feel like he or she only has time to put out fires, you need to consider what may become the ‘elephant in the room’. Consider the example of GlaxoSmithKline PLC (GSK) in China. The new Chinese government had clearly been signaling an upcoming drive against bribery and corruption. It was only a matter of time until a western company got caught up in its dragnet. Yet, even with specific knowledge of a high ranking party functionary making internal whistleblower claims, GSK not only could not uncover its own systemic corruption but was caught flat-footed when Chinese officials brought forward substantive allegations and evidence of corruption. To help with this issue, the authors suggest you ask questions about the external business environment and to “scout for the periphery” of emerging compliance or regulatory trends. You should also follow developments in your industry to anticipate where the DOJ or Securities and Exchange Commission (SEC) might be going next with enforcement.

Be a Contrarian. This question focuses on diversity of opinions by asking, “Do you regularly seek out diverse views to see multiple sides of complex issues, and do you purposely explore important problems from several angles?” This is an ongoing battle that many corporate senior managers, including compliance practitioners, face, that being to “promote diverse and creative friction.” A CCO must learn to ask if the compliance team team has sought sufficient contrarian input and been exposed to all sides of an issue before reaching a decision. While it is possible to counter the tendency of many compliance practitioners to go along to get along; offering contrarian compliance views are particularly essential when tackling major strategic decisions in an uncertain environment. The authors recommend you use such techniques as fostering constructive debate in meetings, pushing back when consensus groups form too quickly and designate specific devil’s advocates to argue the case against the prevailing views or conventional wisdom.

Look for Patterns. Taking a more analytical approach, the authors inquired as to whether “you deploy multiple lenses to connect dots from diverse sources and stakeholders, and do you delve deep to see important connections that others miss?” Connecting the dots entered the lexicon most prominently after 9/11. However it is an importance concept for the compliance practitioner as well. You need to be able to “amplify discrete data points, connect them and take decisive action” because many compliance practitioners are limited by selective perception and seek information that confirms what they wish to believe.

To overcome this information bias, the authors suggest that you utilize the following strategies. One is to “Look for competing explanations to challenge your observations” as this allows you to “engage a wide range of stakeholders, customers and strategic partners to weigh in.” A second is that when you are “stuck trying to recognize patterns or interpret complex data, step away, get some distance and then try again. Sleep on the data, since the mind continues to process information when resting.” This is because each time you take “a break, and then reengaged, he got a deeper understanding and asked better questions.” Finally, do not forget the power of pictures, visualization and charts. You can “use visual graphs or flowcharts to juxtapose the larger picture with the individual puzzle pieces. Pattern recognition is easier when all the information is clearly laid out and presented in different ways.”

Create New Options. Under this prong, the authors investigate whether “you generate and evaluate multiple options when making a strategic decision, and do you consider the risks of each, including unintended consequences?” The authors believe that few senior leaders will “engage in creative thinking.” This can also be true for the compliance practitioner. The authors posit that “When people feel pressed for time, they become less flexible and much prefer certainty to ambiguity. Ambiguity aversion is typically heightened in crisis situations and can lead to cognitive myopia, a narrow focus that can be counterproductive.” To overcome this tendency to cut corners when we are under the gun the authors suggest the following. The first technique is to not simply present “binary go/no-go decisions, reframe a situation to always examine several more options.” Particularly as a compliance practitioner, with or without legal training, you should always inquire as to what else might we do? The second suggestion is to utilize “impromptu meetings when time is limited to generate more options, including unconventional choices. The Midnight Rambler crew did this during a major crisis.” Finally, you should work to “review alternatives based on clear criteria and rank options accordingly.” From this you should work to “Clearly define decision criteria, make them explicit, weigh them and then score each option against the criteria to identify the best choice. Be disciplined when it comes to making tough trade-offs.”

 Learn From Failure. The authors want to know if you encourage experiments and “failing fast” as a source of innovation and quick learning? If there is one area that a compliance practitioner will always face, it is failure. There will always be instances where an employee violates your Code of Conduct or compliance program. It does not matter if you are the World’s Most Ethical Company or somewhere below that level in the compliance strata. But as Paul McNulty said, “What did you do about it when you found out?”, remember this is his Maxim Number 3. The authors write that “Learning from mistakes has much to do with a leader’s mind-set and the questions that he or she asks both before and after an unexpected event occurs. Strategic decision makers abandon the pursuit of perfection, allow some room for well-intentioned mistakes, and examine what went wrong and why. What matters is how well a team learns from setbacks and what mode of inquiry it allows. The best teams try to fail fast, often and cheaply in search of innovation.”

The authors suggest three steps to help facilitate McNulty’s Maxim Number 3. First is to “Shine a light on mistakes as a source of new learning.” Do not bury or hide your miss-steps. Be open about them. Second, you cannot learn from your mistakes unless you study them so if your compliance regime fails in some way, perform a root cause analysis to determine the reason. Lastly, use your miss-steps as teaching moments going forward. The authors note that you should “Publicize stories about failed projects that led to innovative solutions. Praise those who learned from their errors and try to extract learning from near misses.”

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

Bunkie Hunt and the Marketing of Compliance

Nelson Bunker ‘Bunkie’ Hunt died last week. In a state filled with oversized egos and personalities (i.e. ‘Texas-Rich’), Bunkie was one of the true giants. He was a son from the first marriage of the famous Texas oilman-legend H. L. Hunt. Well over 6 feet tall, he also neared 300 pounds in girth when that meant something and let’s just say, it wasn’t all muscle. Bunkie’s greatest notoriety came when he tried to personally corner the world’s silver market in 1980 when he bought up fully one-third of the world’s silver. He drove the price from the mid-teens to over $50 per ounce. However when it became known that he personally was buying up the silver, the market collapsed and the price dropped to less than $11 per ounce and Bunkie was nearly wiped out. That led to one of the greatest Texas-Rich lines of all-time, “A billion dollars ain’t what it used to be.” While I have no personal knowledge precisely on that point, I certainly believe that truism.

Bunkie’s attempt may have failed simply because he did not market correctly what he was trying to accomplish so today I wanted to use his audacious attempt to corner the entire world’s second most precious commodity to continue the discussion of how a compliance officer might work to internally market the compliance function throughout a company. I recently read an article by Raymond L. Panneton, in the Texas Lawyer. It was entitled “Be the Brand: 5 Tips for Marketing a Practice” and provided Panneton’s thoughts on how a lawyer or law firm “might properly distinguish yourself from your competition”. Bunkie’s response was simply to try and buy up all the world’s silver to establish his identity. Alas a Chief Compliance Officer (CCO) or compliance practitioner may not have quite the resources that Bunkie had before his forlorn effort. So I have adapted Panneton’s marketing prescriptions for the compliance practitioner. 

1. Identify a passion. Frankly, if compliance is just a job for you, you are probably in the wrong field. You can know all the building blocks of compliance but if you cannot influence your company, you have lost the battle for compliance. Moreover, employees know who is just biding time in the compliance function while on their way to bigger and better corporate positions and who really cares. Passion in infectious and the foundation of any successful compliance program is the enthusiasm that a compliance professional can bring to the job.
2. Send consistent messages. I think this means a couple of things in the compliance practitioner context. First, and foremost, the message of compliance must be consistent throughout an organization. That means up and down the chain of command. If the top says this is our message that is the message that has to go through the middle and into the bottom of an organization. I think this point also illustrates that the Fair Process Doctrine applies to your marketing as well. Both disciplines and incentives must be consistently meted and handed out evenly. If you fire salesmen in Brazil for cheating on expense accounts, you must also fire the same folks in the US if they engage in the same conduct. Equally with incentives, if someone in Western Europe does a great (compliance) job, you have to reward the folks in other geographic areas who engage in the same conduct.
3. Build a network. Panneton says, “Networking is a critical aspect of building a brand.” Not only can the same be said for the compliance function but it is actually mandatory for our profession. At the end of the day, the greatest strength of any compliance practitioner is the ability to influence. To do so, you must constantly network, network and network at all levels of your organization. If the first time you are meeting the head of Internal Audit, IT or (name the function) is when you need something you are much more than late. You may well likely not get the assistance that you need at that point in time. The same is true for the Regional Manager in East Asia. If the first time they are hearing your voice is the first time they are speaking with you, you are way behind the 8-Ball already.
4. Market the brand. Here Panneton states clearly, “Marketing should be a daily routine.” Amen, Brother. To paraphrase Alec Baldwin in Glengarry Glen Ross, ‘ABC – Always Be Compliant’. Get out there and spread the message. Get out of the corporate office; go to Africa, go to East Asia, go everywhere to spread the brand of compliance across your company’s regions. Marketing communicates to the troops that you care about them and you will listen to their concerns. Nothing speaks louder in a company than when someone from the home office comes out to the provinces to speak and listen to employees concerns. There is always an added benefit to such marketing, this being that people are much more likely to tell you something in person rather than pick up the phone. However, they are much more likely to pick up the phone and call you if they have met you sometime previously. The key is that you have marketed the brand and you have established a personal relationship in doing so.
5. Be creative. As a lawyer, I often say that you are only limited by your imagination. The same is true for a compliance practitioner. Panneton counsels that “When building and marketing a brand, think outside the box.” If your company allows internal use of social media (not applicable for companies stuck in the 1900s), have a great compliance website and use that internal social media platform to get the message of compliance out. Come up with an elevator speech about what compliance is and how it moves your company forward through both transparency and accountability. If you are a good writer, pen short pieces for your company newsletter or magazine. If you are a good speaker, talk at business subdivision annual events. In other words, get the word out. But the point is to think creatively. Talk to your IT department, talk to your marketing folks, talk to your communication group; in short talk to anyone within your organization you might give you some ideas about getting your message of compliance out. And never forget, the Department of Justice (DOJ) specifically mentioned 35 email reminders sent to convicted Foreign Corrupt Practices Act (FCPA) felon Garth Peterson by the Morgan Stanley compliance department as one of the reasons that the employer, Morgan Stanley received a Declination when Managing Director Peterson was prosecuted.

Panneton ends his piece by noting, “Branding is not something that is taught in law school, it is learned through trial and error.” The same is true in the compliance world, particularly for us recovering lawyers. However, I believe a little effort will go quite a long way. Perhaps you can outdo Bunkie and actually corner the world’s silver market all by your lonesome if you have a personal wealth of $16 billion and the right marketing message.

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