FCPA Compliance and Ethics Blog

August 4, 2015

Social Media Week Part II – Sharing in the Compliance Function

Social Media 2I continue my exploration of the use of social media as a tool of doing compliance by looking at some concepts around the sharing of information. In a recent podcast on Social Media Examiner, entitled “Sharing: The Art and Science of Social Sharing”, podcast host Michael Stelzner interviewed Bryan Kramer, a social strategist and author of the book “Shareology: How Sharing is Powering the Human Economy”. Kramer talked about several concepts that I found particularly useful for a Chief Compliance Officer (CCO) or compliance practitioner to think through when considering the use of a social media strategy in a best practices anti-corruption compliance program, under the Foreign Corrupt Practices Act (FCPA), UK Bribery Act or some other compliance regime.

Kramer’s book Shareology is a study of how, what, where, when and why people and brands share. For this book, Kramer conducted more than 250 interviews with executives, marketers and social media people, as well as professors of linguistics, psychology, sociology and so on, with the question “why people share” in mind.

The answer came down to one thing: connection. He found that “People all have the desire to reach out and connect with other people, whether it’s through sharing content and having someone reply back or by sharing other people’s content and helping them out.” From this research, Kramer identified six types of people who share:

  • Altruist: Someone who shares something specific about one topic all the time.
  • Careerist: Someone who wants to become a thought leader in their own industry, so they can see their career grow.
  • Hipster: Someone who likes to try things for the first time and share it faster than everyone else.
  • Boomerang: Someone who asks a question so they can receive a comment only to reply.
  • Connector: Someone who likes to connect one or more persons to each other.
  • Selective: This is the observer.

I find all of these categories to be relevant to a CCO or compliance practitioner in considering the use of social media in their compliance program. All of these can describe not only the reasons to use social media but they can also help you to identify who in your organization might be inclined to use social media and how it can facilitate your compliance program going forward.

The Altruist, Hipster and Careerist speak to how a CCO or compliance practitioner can be seen in getting out the message of compliance throughout your organization. Whichever category you might fall into, it is still about the message or content going forward. I find nothing negative in being seen as one or the other if your message is useful. Even if you are my age, there is nothing wrong with incorporating a little Hipster into your communication skills. As my daughter often reminds me, Dad you are so uncool that you are retro, but that is cool too. Applying that maxim to your compliance regime, if you can communicate in a manner your workforce sees as interesting or even hip, it may well help facilitation incorporation of that message into their corporate DNA.

I found the Boomerang, Connector and Selective categories as good ways to think about how your customer base in compliance (i.e. your employees) might well use social media tools to communicate with the compliance function. The use of social media is certainly a two-way street and you, as the compliance practitioner, need to be ready to accept those communications back to you. Indeed some comments by your customer base could be the most important interactions that you have with employees as their comments or questions could lead you to uncovering issues which may have arisen before they become Code of Conduct or FCPA violations. More importantly, it could allow you to introduce a proscriptive solution which moves your program beyond even the prevent phase.

Kramer also has some insights about the substance of your social media message. Adapting his insights to the compliance field, I found a key message to be that the problem is that companies do not write the way they speak, and don’t speak the language of their employee base. In many ways, compliance is a brand and Kramer believes that “brands and the people representing those brands need to change their language. If they focus on the title and the quality of the content, among other things, it’ll resonate more with their audience.” He also advocates using the social media tools and apps available to you. He specifically mentions Meerkat and Periscope, Snapchat, memes and/or videos to raise the value of the content. He was quoted as saying, “If you have a blog and there are no visuals, you might as well shut it down.”

It would seem the thesis of Kramer’s work is that sharing is a primary method to communicate and connect. In any far-flung international corporation this is always a challenge, particularly for discipline which can be viewed as home office overhead at best; the Land of No populated by Dr. No at worst. Kramer says that you should work to hone your message through social media. Part of this is based on experimenting on what message to send and how to send it. Yet another aspect was based upon the Wave (of all things) where he discussed its development and coming to fruition in the early 1980s. It took some time for it to become popular but once it was communicated to enough disparate communications, it took off, literally. Kramer noted, “It’s the same thing with social media. On social media, we think something will go viral because the art is beautiful or the science is full of deep analytics, but at the end of the day it really takes time to build the community.”

This means that you will need to work to hone your message but also continue to plug away to send that message out. I think the Morgan Stanley Declination will always be instructional as one of the stated reasons the Department of Justice (DOJ) did not prosecute the company as they sent out 35 compliance reminders to its workforce, over 7 years. Social media can be used in the same cost effective way, to not only get the message of compliance out but also to receive information and communications back from your customer base, the company employees.

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

September 25, 2013

Getting Your Employees to Internally Market Your Compliance Program

7K0A0501It has often struck me that one of the things the compliance function must do is to internally market its role in a company. By this I do not mean the internal competition for funding that occurs annually, although that is certainly something which the compliance function must also go through. The internal marketing function of compliance is to get employees not only to understand the message of compliance but, even more so, to think about and use compliance in their day-to-day operations. I recently heard a podcast on social media marketing which had some concepts I thought applicable to the compliance function and its internal marketing role within a company.

The podcast is on the Social Media Examiner site, which brands itself as “Your Guide to the Social Media Jungle.” The podcast, entitled “Social Sharing: How to Inspire Fans to Share Your Stories” is hosted by Michael Stelzner, Chief Executive Officer (CEO) and Founder of the site. Stelzner interviews Simon Mainwaring, author of We First: How Brands and Consumers Use Social Media to Build a Better World. Mainwaring is a consultant who has worked with brands like Nike and Motorola and is hosting the upcoming “We First Social Branding Seminar” in West Hollywood in a few days.

The focus of the podcast was on the use of social media by your employees and customer base to increase market share. However, Mainwaring said something that struck me as key to building a successful compliance program. He was discussing your employee base as one of your most key marketing resources because they are your first and best line of advertising. He 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.

I.                   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 Foreign Corrupt Practices Act (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?

II.                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 that “[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 ‘celebration’ 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, Chief Compliance Officer (CCO) 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.

III.             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 that “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, an interview in the Wall Street Journal (WSJ) today, with Sean McKessy, Chief of the SEC’s Office of the Whistleblower, he stated that “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.”

But, more than a reporting tool for compliance, there are other ways a company can help employees do business in a compliant manner. One commercial tool which immediately comes to mind is Navigator, developed by the firm of Stroz Friedberg LLC, which the firm calls “a groundbreaking mobile and desktop application that makes your compliance program come alive! It automates clear answers and approval processes, and even offers data analysis for enhanced decision-making. The Navigator “app” is custom-tailored to each client and offers an array of benefits to any organization seeking easier ways to drive a positive corporate compliance culture.” I have seen this tool and it is way cool.

Yet there are other tools which are 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 Resource Guide; 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 O’Melveny’s 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 and its scope is international, 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 compliance practitioner from the disciplines of marketing and social media. These three concepts are useful to aiding companies in getting their sales pitches out and can be of great help to you, the compliance practitioner, in communicating marketing throughout your company as well.

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, 2013

Blog at WordPress.com.