Matt Kelly on the Top Compliance Stories from 2023 [Podcast]

01/16/24 • 17 min

By Adam Turteltaub Matt Kelly (LinkedIn), Editor and CEO at Radical Compliance is a close watcher of all things compliance, and in this podcast he shares his take on both the top stories of 2023 and what he sees in the cards for 2024. FCPA On the Foreign Corrupt Practices Act front, he noted a change in enforcement. While the volume of resolutions declined on the DOJ side, the SEC has remained very active. Perhaps most notably, the Albermarle case had an interesting twist. The way the company did business was changed dramatically as a part of the settlement, he reports, with a restructuring of its overseas sales and the end of the use of third parties. He speculates this may be the start of a new trend in which monetary penalties are accompanied by required changes to the way companies do business. Also of note in FCPA was the announcement by Lisa Monaco at the SCCE Compliance & Ethics Institute of a leniency policy in mergers and acquisitions. Because of the relatively short timeline for finding and disclosing problems, there is a strong incentive for organizations to involve the compliance team early and deeply in these transactions. SEC Cybersecurity Rules The July SEC rules on disclosures of cyber incidents require firms to disclose an incident within four days. Companies will need to describe the nature, timing and material consequences. That will increase the importance of thorough and prompt cyber materiality assessments, as well as both quantitative and qualitative impacts. Greenhouse Gas Disclosures The SEC’s proposed rule on greenhouse gas disclosures is now the longest and most commented rule in history. It also has not been finalized while, in the meantime, both California and Europe have passed their own laws. The rule is likely to be very complex and impose a significant burden on companies. Healthcare The biggest news he saw in 2023 was the new General Compliance Program Guidance issued by the Office of Inspector General at HHS. The document makes it clear that it expects a fully independent compliance program. As the document states: The compliance officer should: report either to the CEO with direct and independent access to the board or to the board directly; have sufficient stature within the entity to interact as an equal of other senior leaders of the entity; demonstrate unimpeachable integrity, good judgment, assertiveness, an approachable demeanor, and the ability to elicit the respect and trust of entity employees; and have sufficient funding, resources, and staff to operate a compliance program capable of identifying, preventing, mitigating, and remediating the entity’s compliance risks. The Future Looking to the future he asks if others will be as supportive as the OIG at HHS. He also points to other things to watch such as the Foreign Extortion Prevention Act, the PCAOB’s extremely controversial NOCLAR proposal and SEC v. Govil, which could eliminate disgorgement in many cases. Listen in to learn more about what has and may happen in the world of compliance.

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Jaime Watkins on Creating a Compliance Mascot [Podcast]

By Adam Turteltaub We all want the compliance team to be approachable. It would be ideal if, when people thought of compliance, they had positive, maybe even warm and fuzzy, associations in their mind. But, how do we get there? For BroadPath, a friendly blue koala was the answer. In this podcast, Jaime Watkins, the compliance officer there, explains that she drew inspiration from the Basic Compliance & Ethics Academy and an exercise that called for creating a compliance mascot. Back at the office she created a contest among employees to create a mascot as a part of the company’s celebration of their compliance and ethics week. A winner was selected, and, with the help of the marketing team, the blue koala was born. Since then, the furry critter has been a regular part of their training, newsletter and is used everywhere that they can, even sometimes straying to the activities of other groups in the company. The impact of the koala has been enormous. People enjoy seeing variations of how it is dressed up for holidays and it even plays a role in regular compliance trivia contests. Listen in to learn more about how a mascot could help your compliance efforts.

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Wendy Evans on Investigative Interviewing [Podcast]

By Adam Turteltaub Effective investigative interviews are both important and sensitive. To get some pointers about how to conduct them properly, we turn in this podcast to Wendy Evans, Senior Corporate Ethics Investigator at Lockheed Martin. Wendy is also an instructor for the SCCE Fundamentals of Compliance Investigations workshops. She recommends starting by doing your homework. Before you talk with anyone, whether a possible witness or the subject, get all the information you can from the reporter. Then, review it to see if it includes the what, where, when, why and who. If you don’t have all that information, take the time to find it since it can identify what the potential motivation behind the incident was. With that information in hand, check your case management system to see if any of the parties were involved in previous reports. Follow that by notifying HR and the subject’s manager that you will be conducting an interview. They may have important insight. Think through what other evidence you may need for the investigation, including expense and audit reports. If you are going to conduct the interview remotely, she offers four pieces of advice: Be sure to schedule it appropriately. Sending a meeting request on a Friday for a Monday meeting can create an entire weekend of unnecessary stress for the individual. Mark the meeting request as private so you, and they, don’t have to worry about others seeing it. Ensure that the person has video and a private place to talk. Always include your phone number in case a technology glitch gets in the way. At the time of the interview, don’t just jump into the questions. Take time to build some rapport. This will help reduce the stress level. Then, when you start asking questions, begin with broad ones -- “tell me about your work” or “what were your last three business trips?” -- that aren’t simple yes or no. Then, over time, move in to more narrow, specific questions. When it’s time to get to the hard questions, help the subject prepare themselves psychology. Preface then by saying something along the lines of, “I have to ask you a tough question.” When concluding the interview, ask: Is there anything else I should know but didn’t ask you? That can prompt the sharing of additional information. Finally, be sure to thank them for their time and cooperation. Be sure to also reiterate what the investigation process is and what they can expect next. Listen in to learn more, and, maybe, join her at an upcoming Fundamentals of Compliance Investigations workshop.