Home – Enter the ninja: A disciplined approach to defeat regulatory risk

Enter the ninja: A disciplined approach to defeat regulatory risk

Posted on 12-05-2018 by Lisa Thompson

 Forget about the turtles. Today is International Ninja Day, but what we’re on about has more to do with regulatory risk than teenagers or (as far as we know) mutants. Why does International Ninja Day make us think ‘compliance program’?

International Ninja Day was the brainchild of website Ninja Burger, which came up with the idea in 2003 to celebrate the know-how and discipline needed to deliver burgers at great speed. Okay, so it’s a parody website. But it’s pushing a noble cause. And while we may seem to be drawing a long bow—or more aptly, wielding a katana (curved sword) or nunchuks (those fearsome stick-and-chain things)—the know-how, discipline and speed associated with ninjas has become embedded in corporate lexicon in the form of the term ‘compliance ninja’.

Another thing ninjas are associated with is the ability to absorb pain while triumphing over formidable odds, which is also relevant to the devious dark forces and increasingly complex regulatory requirements that compliance ninjas must cope with.

In short, the corporate compliance area of risk management is about maintaining an up-to-date ultra-awareness of anti-bribery, anti-money laundering and sanctions laws, especially in the context of doing business internationally. If that is to prove effective, it must be coupled with thorough due diligence and ongoing risk monitoring, and the ability to swiftly execute appropriate responses when faced with potential or actual breaches.

As any true compliance ninja might be heard to mutter while heading for the filtered water dispenser: “Ninjitsu!” (the strategy and tactics of unconventional warfare and espionage practiced by ninjas).

On the website of the Association of Corporate Counsel is a list of the top 10 basics for complying with the U.S. Foreign Corrupt Practices Act, according to adjunct professor and anti-corruption compliance specialist Stephen Clayton. He makes no reference to ninjas, but he whirls mean nunchuks in making points with global applicability.

At the top of his list is the observation that corruption in international business is commonly and frequently ignored. “Managers and lawyers in most companies want to believe they work for clean, ethical organizations that hire law-abiding employees,” says Clayton. “This positive bias often blinds US business people to the reality of international business, where bribes, kickbacks and false or unrecorded transactions are common. Corrupt activity also exists in the U.S., of course, but it is more difficult to understand what is going on in foreign countries when your U.S. managers have little or no language ability or cultural context.”

Secondly, he emphasizes that FCPA investigations and cases against companies and individual company managers and employees are more common than many people think.

Thirdly, he says it’s crucial that companies assess and fully understand their risk of being involved in international bribery. “The FCPA’s definition of ‘government official’ is extremely broad and includes even low-level employees of government-owned companies. Some countries expose U.S. companies to very high risk of corruption. If you don’t understand your company's specific risk, you may fail to spend your scarce compliance resources in a cost-effective manner.”

Clayton goes on to stress the need for companies to have a standalone international anti-corruption compliance policy, and an executive accountable for the ‘tone at the top’; the need to train board members, management, employees and third parties in anti-corruption matters; and the need to know all the third parties a company uses in business overseas, and to conduct due diligence.

“In FCPA jargon, an ‘intermediary’ is a third party who assists a company in some aspect of its foreign business,” he says “Understand that intermediaries do not shield your company from liability—they create liability. Ninety percent of FCPA cases brought by the U.S. government [as of 2011] involve conduct by third parties.”

All of which gives some indication of what it takes to be a badass compliance ninja.

Incidentally, on the website National Today, listing special days around the world, it is suggested that International Ninja Day be celebrated by taking a martial arts class, watching a ninja movie and dressing like a ninja. In the off-chance that you, as a compliance ninja, don’t have a full ninja costume, there’s an out: wear a plain, black t-shirt, which is “pretty much the foundation of being a badass.”

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