I have wondered how organizations such as Siemens,
Alcatel-Lucent or any others that have faced a wide-ranging, global charge of
systemic bribery and corruption might change their culture. Many others have
written about the structural changes that such companies have made. For
instance, the compliance monitor for Alcatel-Lucent, Laurent Cohen-Tanugi, was
quoted in a recent Corporate Crime Reporter article, entitled "Alcatel-Lucent
Monitor Questions Morgan Stanley FCPA Declination", as saying "I've
noted a very significant change in the tone at the top since the time of those
events that led to this deferred prosecution agreement. These changes are due
to a number of factors - such as the merger between Alcatel and Lucent. Most of
the facts predated the merger. But also the new leadership that came to the
company - in the persons of Ben Verwaayen and Philippe Camus. I have noted that
the company has in place the policies and processes that are generally expected
to fight corruption. And that is very good news."
Another method was used by the first Chief Executive
Officer (CEO) who came into Siemens after its bribery and corruption scandal.
One of the things that Peter Löscher did in his first 100 days with the company
was to go on a round the world tour of the company's facilities, including
meetings with employees, customers and local governmental officials. He
accomplished this final component through meetings with local leadership teams,
town hall-style meetings with all employees and dinners with top leadership
teams in specific locations. He basically learned that Siemens employees were
"shocked and ashamed, because they were very proud to be a part of Siemens."
They wanted him to help clean up the company and they communicated that to him
in these town hall meetings.
I have worked for and with a number of companies that may
seem to have lost their compliance path and have become embroiled in a lengthy
Foreign Corrupt Practices Act (FCPA) or UK Bribery Act investigation. They may
need to try and change a culture that has slipped down a path that needs
redirecting. I was, therefore, interested to read a recent article in the
December issue of the Harvard Business Review
(HBR) by John Seaman Jr and George David Smith, entitled "Your
Company's History As A Leadership Tool", where the authors write about
a different manner in which to change or modify culture, or what I call the
The authors begin by stating they believe that "For a
leader who hopes to take an organization into the future, one of the most
powerful tools may be a sophisticated understanding of its past." To accomplish
this, the authors advocate thinking like a historian because they believe that
if you do not know where you have been, it is difficult to know where you are
going. By this they mean that you should base any serious decision on facts.
Next, you must be willing to treat facts "with intellectual integrity - viewing
them with an open mind and a willingness to be surprised." The authors
recognize that many CEO's are faced with great pressure regarding "quarterly
earnings reports and the need to react to one crisis (real or perceived) after
another," yet they believe that the best leaders have "a long range perspective
on the companies they manage."
I believe that most employees want to engage in business
ethically and that they do not want their company to be known as one which
engages in illegal conduct, such as FCPA or UK Bribery Act violations.
Employees want their companies to be successful because of better products,
better services and better delivery of both to their customers. They want to
understand, be a part of and have a sense of legacy for the company that they
work for and the people that they work with as employees. To help facilitate
this, the authors suggest that a company can engage in seven steps to help
understand where a company has been to in order to help guide it where it may
be going in the future. The authors call this the "Seven Tips for Getting
History on Your Side" and they are:
The authors conclude by stating that "A company's store
of experience-its evolving culture and capabilities, its development within the
broader contexts in which it has competed, and its interactions with government
and other forces-shapes the choices executives have to make and influences how
people think about the future. Great leaders respect and honor that basic
If your company needs to refocus its commitment to
compliance, in addition to the compliance processes and procedures that you
will need to install or enhance, you may be able to call upon a rich corporate
history to assist you. It is there if you look for it and what you find may be
similar to what Siemens CEO Peter Löscher found at Siemens, that employees were
both proud of their company and ashamed that it had engaged in such bribery and
corruption. But you do have to look.
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.
This publication contains general information
only and is based on the experiences and research of the author. The author is
not, by means of this publication, rendering business, legal advice, or other
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© Thomas R. Fox, 2012
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