Dan Snyder, the CCO and Doing Business Ethically

Dan Snyder, the CCO and Doing Business Ethically

 We continue the football theme as an entrée into compliance by looking at Washington Redskins owner Daniel Snyder. I am a life-long Dallas Cowboys fan so having someone like Snyder as the owner of your main rival at the professional level is almost too much fun for words. Clearly presaging the Jim Crane “I-made-a-$100M-in-business-so-I-must-know-what-I-am-doing” school of sports ownership, Snyder has made about every bonehead mistake possible during his tenure as owner of the Washington professional football club. However, now Snyder has moved from simply making idiotic football decisions to one of ethical and perhaps even moral dimensions.

In the Sports of the Times column in this past Sunday New York Times (NYT), entitled “Redskins’ Owner Stubbornly Clings to Wrong Side of History”, columnist William Rhoden wrote the ongoing controversy of the continued use of the word ‘Redskins’ in the name of the Washington professional football team. Rhoden did not mince words when he wrote that Snyder is “making an equally strident stand against civility that will define his legacy as an owner and as a citizen.” He based that statement, in part, on Snyder’s quote delivered to the USA Today last May, “We’ll never change the name. It’s that simple. NEVER-you can use caps.” Rhoden makes an ethical and moral argument for a change away from the use of the name ‘Redskins’ but opines that those making such arguments are “barking up the wrong tree” because Snyder’s fight is about money and “licensing, marketing and branding.”

Yesterday I wrote that one of the functions of a Chief Compliance Officer (CCO) is to provide advice to help companies do business ethically and in compliance with laws such as the Foreign Corrupt Practices Act (FCPA) and UK Bribery Act. So what might a CCO of the Washington professional football team tell his boss about now? It might go something like the following:

CCO: You know Mr. Snyder (I doubt anyone calls the smartest guy in the room Dan); there is a way to make money here and do the ethical thing. Washington fans are some of the most rabid and loyal fans in the country. If we changed the name they would all need knew gear. A rebranding could be a financial windfall for us.

Snyder: But what about all our current merchandise, you can’t expect me to donate it to Goodwill.

CCO: All that back stock would become collector’s items and we could increase the price to sell it on a close-out basis. Just think of the money you would make.

Snyder: I was going to think of that next.

In other words there is almost always a way to do business profitably and ethically, even if you work for one of the world’s smartest men.

While Snyder’s leadership has been an absolute joy for Cowboy fans everywhere (and don’t forget the Cowboys have the even more egotistical Jerry Jones as their owner); there was another article in a prior edition of the Sunday NYT which provided some more concrete steps that a CCO might utilize. In the Corner Office column, reporter Adam Bryant wrote about Michael Gould, the Chief Executive Officer (CEO) of Bloomingdale’s, in a piece entitled “Be Passionate Yes, but Always Have Compassion”. Gould’s father was a college professor and he told the following story about a leadership lesson he learned from his father. “I was in grade school, and the phone rings during dinner. There were no answering machines in those days, of course. My father starts getting up and my mother says: “Bernie, sit. Let it ring.” And my father says: “Sophie, it could be a student. And if a student has the courage to call his professor, the professor should always be there.””

“What it said to me was that we’re in the people business. I believe the business I’m in is giving people an opportunity to grow. At the end of the day, no one remembers anyone’s numbers, no matter how good they were at any moment in time. All anyone’s going to remember is, did they give me an opportunity to be more than I thought I could be? What people want is a sense of recognition. They want a sense of belonging. People want to sense that what they’re doing makes a difference.”

Gould went on to explain that he does not expect his employees to have the answer, just to “know where to go for the answers.” This is one of the things that I try to emphasize in compliance training, “Just raise your hand.” Ask for help before you do something that you are not sure about. But to put this requirement on employees brings a corresponding obligation on compliance professionals, for example you have to answer the phone when it rings and answer the question. I have worked in corporate legal departments where answering the phone seemed to be optional and making a decision was not high on the list of priorities.

Nothing frustrates a business unit person more than someone in a support function, such as legal or compliance, sitting up in an ivory tower and not responding to requests for assistance. This means that you have to answer the phone, interact with people and provide an answer where necessary. This speaks to another key point that Gould discussed; the issue of trust. Gould said, “To me, the fundamental basis of leadership is trust. If you don’t have trust, you have no leadership. I’ve also always believed that you have to be passionate about what you do, and have compassion for people. I don’t think you can teach passion. You know it when you see it. You can just look in somebody’s eyes.”

The FCPA Guidance speaks to another issue brought up by Gould’s admonition; that of resources for the compliance function. The FCPA Guidance states, “Moreover, the amount of resources devoted to compliance will depend on the company’s size, complexity, industry, geographical reach, and risks associated with the business. In assessing whether a company has reasonable internal controls, DOJ and SEC typically consider whether the company devoted adequate staffing and resources to the compliance program given the size, structure, and risk profile of the business.” Gould spoke about resources when he talked about termination of an employee. One of the things that you need to consider in a termination is what resources did you provide to him/her to do the job? And how did the staff respond to the termination? In other words, you need to consider the resources available to the compliance practitioner to fulfill his or her function.

Gould’s messages on leadership really do tie into Snyder’s self-imposed conundrum and for CCOs. We are all in the people business. If you do business ethically, it can not only be good for business but you will be respected. And it has the added advantage that you will not be criticized by the Commissioner of the National Football League and the President of the US or even William Rhoden in the NYT.
 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 professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2013

For more information about LexisNexis products and solutions connect with us through our corporate site.