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Thomas Fox on Effective Ethics and Compliance Training for Foreign Corrupt Practices Act Sentencing Guidelines

Effective training programs incorporate all learning tools available to reach the widest target audience. Effective training provides knowledge about what an employee can and cannot do when confronting those 'grey areas' that exist in the real world of international business.



But what is an "effective training program". Andrea Wrage has written, in her blog Wragblog and in Ethisphere Magazine that she believes there are two general approaches to ethics and compliance training. The first approach focuses on knowledge of the rules "as clear and sharp as barbed wire" so that the "cowboys" in the company will not run wild. This is the approach most US in-house lawyers feel is required for their company's operations and sales teams and is generally designed to help avoid criminal liability.

The second approach focuses training on ethical values and is more prevalent in Europe where ethics and compliance are more designed to communicate a company's underlying corporate values in its operations. This approach anticipates that most employees are decent and law-abiding and will not knowingly engage in bribery and corruption. Additionally, you can never create enough rules to govern every situation and train each employee on every rule so a company must hire trustworthy people and give them sufficient information to make the correct ethical and compliant decision. Ms. Wrage characterizes the two different approaches as "ethics" vs. "values."

Both approaches have merit but both can catastrophically fail without the other components of an effective compliance program. For instance, having a "Gold Standard" Code of Compliance and Ethics alone is not enough. Although it was not brought down by an FCPA violation, the Enron Code of Ethics was viewed (at least at one time) as one of the strongest in the energy industry. And not to focus solely on US companies, Siemens had one of the most robust Codes of Ethics for a European company before its $1.6 billion fine and profit disgorgement. So the training on both of these company's "Gold Standard" codes of ethics did not turn out to be too helpful. But as pointed out by Kerri Grosslight, in her article "Minimize Risk by Maximizing Accountability" in Security Leadership, training is one of the key components to a robust compliance policy. [footnotes omitted]

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