One of the things that I sorely lacked when I worked in-house was any guidance on management practices towards the implementation of either legal or compliance initiatives. Most legal and compliance departments do not train their attorneys or compliance practitioners on management practices for compliance program implementation, enhancements or upgrades after a risk assessment. I was therefore very intrigued when I came across an article in the November issue of the Harvard Business Review, entitled "Does Management Really Work?" by Nicholas Brown, Raffaella Sadun and John Van Reenen. I found the article very useful because it gave succinct advice about what a business can do to improve its management practices and determined that this advice can be applicable to a compliance program.
The authors tested three essential practices which they believe can address even the most complex global problems. The three principles which they believe "are generally considered to be the essentials of good management" are:
You might read these and immediately think about Paul McNulty's (Three) Maxims. I, however, believe that these three management practices can provide some assistance beyond McNulty's queries. In the article the authors research showed that by the use of these three techniques businesses could not only set parameters but also measure on them, generally had more and better productivity and overall better financial health.
From the compliance perspective how can one use these three relatively straight forward techniques? Interestingly the authors revealed some of the questions used in interviews with over 8,000 manufacturers who were interviewed in this project. I have selected 10 questions which you might want to put use as a starting point for managing your compliance initiatives going forward as I believe that they are very good questions to use in formulating a plan for compliance program implementation or upgrade. I would challenge you to think about some of the answers to these questions in the context of your compliance program.
I found the article to be very useful when applied to the compliance practitioner by not only using the triumvirate of targets, incentives and monitoring as a management practice but also the questions that the authors posed in the context of your company's own compliance program. We continually face the challenge of keeping up with the ever evolving compliance best practices with little or no budget increase. I found that this article had points which you can ask yourself, and of your compliance program, which can facilitate a robust discussion that can highlight areas for improvement.
Visit the FCPA Compliance and Ethics Blog, hosted by Thomas Fox, for more commentary on FCPA compliance, indemnities and other forms of risk management for a worldwide energy practice, tax issues faced by multi-national US companies, insurance coverage issues and protection of trade secrets.
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© Thomas R. Fox, 2012
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