What was the single greatest transfer of property from the US government to its citizens? It was public lands that were given to persons willing to farm the land. Today we celebrate the 150th anniversary of the Homestead Act, passed on May 20, 1862, which facilitated this donation. Under this law, any person, over 21, could stake a claim of up to 160 (later increased to 640) acres if they were a citizen or declared the intention to become a US citizen and agreed to farm the land for five years. In an article in the Saturday Wall Street Journal (WSJ), entitled “How the West Was Really Won”, author Fergus Borderwich quoted President John F. Kennedy who stated in celebrating the Centenary of the Homestead Act, “more than 1.1 billion acres of the original public [domain] have been transferred to private and non-federal public ownership.”
Borderwich goes on to write that it was farming that tamed and then settled the West. But more than simply planting, it led to technical innovations in agriculture, animal-feeding and water management. Land-grant colleges followed to provide educations to children of these homesteaders, which led to further growth and innovation. Borderwich quotes Bonnie-Lynn Sherow, “If you measure the achievement of homesteading by the value of today’s GDP alone, it was an enormous success.” From the article I gleaned that it was the day-to-day work of farmers, innovators, educators and a host of others that created the great breadbasket that is the United States.
This drove home to me that what a company really needs to accomplish regarding compliance is to do the day-to-day work in its company to help create and foster a culture of compliance. Recently May 7-11 was designated as “Compliance and Ethics Week”. One of the panelists I saw last week at the IQPC Upstream Contract Risk Management conference spoke about how his company celebrated this event and used it as a springboard to internally publicize its 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.
Inter-Company Events
These were ‘Lunch-N-Learn’ events hosted throughout the week. Topics included
- Monday: Navigate and Learn the Corporate Compliance Website;
- Tuesday: How to Determine if You Have a Conflict of Interest;
- Wednesday: Review of the company’s pre-approval procedures for gifts, travel and entertainment of non-US officials and employees of State Owned Enterprises;
- Thursday: Understanding the purpose and importance of the Company’s Alertline; and
- Friday: Ethical Behavior that Wins Business and Attracts Top Talent.
Participation in these events allowed the Compliance Department to meet informally with the business unit folks. Even in a corporate headquarters, most conferences are more formalized training but the ‘Lunch-N-Learn’ concept provides a more casual atmosphere and, therefore, better opportunities for interaction.
Cost: Sandwiches for lunch
Brochure
The Company regularly distributes a short Compliance Brochure. In the Brochure, which announced the company’s celebration of Compliance Week, it included the following phraseology that I quote in its entirety as I thought it was so eye-catching. The Brochure had spelled out ‘Compliance’ vertically and assigned phrases to each letter so that it reads as follows:
Commit to ‘Doing the Right Thing’
Observe the policies that apply to your job
Make compliance awareness a part of your job
Put Code of Conduct in assessable place
Lead by example
If in doubt, check it out
Attend educational and mandatory training sessions
Notify your supervisor of possible wrongdoings
Communicate openly and honestly
Ethics is a part of all activities
In addition to the above phrasing the Brochure included information on the Company hotline; contact information for the Compliance Department and a listing of some of the information available on the Company’s internal intranet site.
Cost: Regular printer paper
Compliance Booklet
The final piece of information provided during the company’s Compliance Week celebration was a four-page Booklet provided to each employee, specifically tailored to the Compliance Week celebration. It listed out several elements from the company’s compliance program and the company’s Vision and Core Values. It also provided the contact information on the company hotline and contact information on the Compliance Department personnel. One of the most interesting things it listed was the company’s Compliance Department philosophy about what it believed it owed the company’s employees. This included the following:
- Guidance on the policies and procedures that apply to your duties
- Training to enable your compliance with all applicable policies and procedures
- Monitoring to ensure compliance with policies, procedures and laws
- An environment that will not tolerate retaliation against those who report compliance concerns in good faith
Cost: Thick printer paper
I have set out all of the above in some detail to demonstrate some of the lessons learned from the Morgan Stanley declination/Garth Peterson enforcement action. You can take steps right now, as in this minute, to help foster a culture of compliance in your organization. The Department of Justice (DOJ), in its Press Release regarding the declination, listed persuasive events such as training and as simply as email notices sent to Peterson. What is the cost of sending out an email notice? Not too high.
The Compliance Week celebration demonstrates, once again, that it is doing compliance which drives home not only the message of compliance within a company but also demonstrates to any regulatory body reviewing a company, that compliance is living part of the organization. So just as the Homestead Act created the opportunity for the taming and settling of the American West, it was the homesteaders, doing the work of farming which the Homestead Act was designed to foster, who made it a reality.
============================================================================================
We send out a big congratulations to Chelsea and all their fans for winning the UEFA Cup on Saturday evening.
============================================================================================
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, 2012
FCPA Compliance and Ethics Blog 