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Mar 18, 2016

SCCE's Compliance & Ethics Institute review

From plenary sessions on risk management and inter-generational communication to panels on personal liability for compliance officers and the OECD Working Group, annual conference had lots to offer

The Society for Corporate Compliance & Ethics (SCCE) held its 14th annual Compliance & Ethics Institute (CEI) in Las Vegas on October 4-7. Corporate Secretary recently spoke with Sally March, a long-time SCCE member and a director of Drummond March & Co, about the conference highlights.

What did former astronaut Garrett Reisman talk about?

He went into risk management and what went on with two [NASA] flights that exploded. One of the points he was making was this: just because things don’t go wrong for a very long time doesn’t mean there’s less risk. When the rocket holds up under difficult conditions, that doesn’t mean there isn’t a risk that one day it will explode. It was a good reminder of some of the basics of risk management that we can sleepwalk into accidents like that.

The best plenary session was motivational speaker Cam Marston talking about how to communicate with different generations [in the workplace]. The revelation for me is that when you’re talking to millennials and you ask how they see the future, they say, ‘Are you asking me what I’m going to have for dinner tonight?’ Their view of the future is much different from [the baby boomers’] view. So it was very funny and insightful, and everyone was talking about reviewing their communication programs and focusing them a little bit more carefully.

Explain some of the differences in assumptions about compliance and workplace culture baby boomers may make versus millennials.

Legacy is very important for baby boomers: we don’t want anything [bad] to happen on our watch, so the way to appeal to our better nature is to say, ‘You’re working for a fine company with a long history, a treasured reputation.’ And we as managers spend a lot of time making sure everyone around us understands how all the pieces fit together and what the objectives are. By contrast, the younger generations have been raised with the tools of isolation – my words, not his – and would like to be left alone to get on with things. So talking about the legacy and the treasured name is not going to appeal to them; you have to find a different way to motivate them.

But it’s interesting: other studies [find that] young people want to work for an ethical company, so I guess they want to work for a company that’s ethical now. They really don’t care if it’s been around for a hundred years and has a fantastic reputation.

What were the key points from the Commerce Department session?

There is a commercial attaché at most of the major embassies and the commerce and state departments work closely together to provide information to US businesses on how to do business in XYZ country, but they are also a resource if you hit snags – not that they can iron them out for you but they’re having government-to-government talks all the time and sometimes can help steer you in the right direction. If you go into a country known to be corrupt, and everyone is hitting the same obstacles in customs, for example, the Commerce Department can collect all of that information and it can be raised at a higher government-to-government level. It doesn’t solve your problem [right then], but in the long run we hope it will make things easier for everyone.

What did NextGen Compliance cover?

It was more a look back by the SCCE on where the profession has come from, and one hot topic was social media. The panel had someone from a drug distributor – a highly regulated industry – that has to be ultra-concerned with security of information, and that has struggled to reach the right balance in its social media policy, compared with Yahoo, where social media is its business. Yahoo is always encouraging its employees to participate in social media; it has a much more free and easy social media policy.

Another session covered personal liability for compliance officers. [Bryan Cave partner] Scott Killingsworth analyzed the most recent SEC cases and his message was basically: ‘Don’t worry yet.’ One of the cases we’re watching [in the UK] is Alstom, where the chief compliance officer has been charged, I believe, with criminal conspiracy. The SEC cases Scott reported were quite specific to the financial services sector so we’re waiting for some other cases outside of financial services to give us more of a clue.

The panel I participated in was an update on anti-corruption efforts in Europe. Drago Kos, chairman of the OECD Working Group on Bribery, told us what’s happening with the OECD. I didn’t really appreciate what’s been accomplished with this group and the peer-to-peer pressure that’s been brought to bear behind the scenes at its private meetings. The fact that we have a Bribery Act in the UK and that every country in Europe has up-to-date bribery laws is in large part due to pressure the US brought through the OECD. Drago’s tip for what to look out for is ‘enforcement, enforcement, enforcement’. Chuck Duross, who used to be with the Department of Justice’s anti-fraud section and is now at Morrison & Foerster, said there’s a lot of information-sharing going on that companies probably aren’t aware of.

What other points did the OECD panel raise?

A one-size-fits-all US-designed program that’s run from the US will not necessarily meet the [compliance] standards in Italy, particularly if your Italian directors are not involved in overseeing the program. An Italian subsidiary should have Italian directors. That’s a trend we’re going to see more and more.

What were the takeaways from the session on predictive monitoring?

The critical point is that if there is only one thing you measure to give you the best idea of how effective your program is, it’s asking your employees whether they feel that misconduct will be acted upon consistently and fairly. What session presenter Jennifer Kugler, director of research and executive education at Corporate Executive Board, calls organizational justice has a higher correlation than any other thing you can measure or monitor, and any other question you ask on an employee survey.

What happened in the session on the power of story in communication? The Second City has a business consulting unit and got everybody talking to show what a downer it is to hear, ‘No’ or ‘Yes, but...’, how that ends every conversation, so it was teaching us how to say ‘Yes, and...’. The general message is that the days of a day-long session on corruption are over. We need to be smarter, more targeted and more engaging. Once you’ve given your target audience the basics, it’s much better to give people a link to a one-minute video that will remind them of a particular point.

What’s the benefit of attending the CEI?

Most companies, unless they’re in a regulated industry, have a relatively small compliance department, and there are still a lot of companies where the compliance officer wears two hats. At a conference where there are 1,500 compliance officers, the energy level is so high, like everyone is recharging their batteries, ready to go back into the fray and be the loneliest guys in town for another year.

This article appeared in the winter 2015-2016 print issue of Corporate Secretary Magazine

David Bogoslaw

Associate Editor and Online features producer for Corporate Secretary