Today we channel Sergio Leone and Clint Eastwood in the
context of the compliance assessment, which has been something that has evolved
into a key component of a minimum best practices Foreign Corrupt
Practices Act (FCPA) compliance program over the past few years. Item No. 13 on
the Department of Justice's (DOJ's) 13 steps for a minimum best practice compliance
13. Ongoing Assessment. A Company should conduct
periodic review and testing of its anti-corruption compliance code, standards,
and procedures designed to evaluate and improve their effectiveness in
preventing and detecting violations of anti-corruption laws and the Company's
anti-corruption code, standards and procedures, taking into account relevant
developments in the field and evolving international and industry standards.
While many commentators have argued that this item
requires a professional, independent third party to perform this Ongoing
Assessment, I recently came across an article which gave me pause to think that
another avenue may be open to the compliance professional to follow this
The article published in the Sunday, April 1, New York Times Business
Section, Corner Office Column, entitled "The
Best Scorecard Is the One That You Keep for Yourself", writer Adam
Bryant interviewed Charlotte Beers, the former Chief Executive Officer (CEO) of
Ogilvy & Mather Worldwide. Her thesis was that "it's vital to make self-assessments,
and to include the good, the bad and the ugly."
Beers talked about her use of self-assessment in her rise
up the corporate ladder until she became a CEO. She believes that continual
self-assessment can provide self-knowledge which is the key for an employee to
transcend up to become a superior employee and then a corporate leader. It will
also improve your team relationships and enhance your ability to handle complex
relationships. She says that you must reach for the "intangible and the invisible...
but find out if they have confidence about the things that matter, their own
ability to think and to get to the true center of things."
I thought that the concepts discussed by Beers would be
very useful in the compliance context. Many compliance practitioners have
struggled with the assessment theory. When, how often, and who should perform
it, are questions I am often asked. While having an outside third party perform
an assessment at a one or two year basis may certainly be a good start, a
compliance self-assessment should be integrated into your compliance program.
It provides the benefits of a continual model which would allow you to test and
assess various portions of your compliance program on an ongoing basis. Also
the cost would not be great as you would not be required to bring an outside
You could begin by trying to determine your company
employee's real attitudes towards compliance. If they observed something amiss,
would they have the "interior tensile strength" to report the matter? Has your
company made reporting as easy and straightforward as possible? One former
compliance officer told me that in auditing the company's hotline in a Far East
country it was determined that the toll free line did not ring through and the
only way to call the home office in the US was by using a special cell phone
provided only to senior managers of the company. How many calls do you think
came through that hotline?
The more I have listened to ex-DOJ lawyers, like my
former speaking partner Stephen Martin and his current law firm partner, Paul
McNulty, the more I hear things like "move the ball forward" and "how did you
use the resources you did have" to enhance your compliance program. Charlotte
Beers observation that the "best scorecard is the one that you keep for
yourself" clearly is a mechanism suggested by Martin and McNulty's words of
So how about Leone and Eastwood? For my money, the best
movie of the first phase of the Spaghetti Western genre was their
classic "The Good,
The Bad and The Ugly." That is the final word from Beers. In your
self-assessment you must be prepared to look at all aspects, the good, the bad
and the ugly. Learn and grow from each and all.
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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