Considerations to think about when planning your compliance and ethics strategy in 2017

Key Takeaways from the Compliance and Ethics Year in Review Webinar

Couldn’t attend the session live? No sweat. Download the full recording and presentation slides.

We can all agree that 2016 was a year full of surprises, tremendous activity and egregious scandals related to bribery, corruption, and culture failure. Consequently, and somewhat fortunately for the compliance and ethics (C&E) industry, relying on the function to better protect and safeguard a business has never been greater.

On the other side of the coin, 2016 brought forward more responsibilities for the modern practitioner to add to their already full plate.

How can we break down 2016 and apply it to what we may see take shape in the New Year? What impact will last year’s events and outcomes have on our business, integrity and C&E programs.

Earlier this month, we released a comprehensive infographic summarizing the past year and what may occur in 2017 based on these events. While you know better than anyone this industry changes and fast, our predictions are just that: predictions. It will be an interesting conversation one year from now to see how they panned out. But until then, let’s see how programs can keep up — and set pace — with the potential changes ahead.

Below is a sample of the topics we discussed during the live webinar. For more insight and advice that you can apply to your C&E program for a better 2017, listen to the recorded webinar session and snag a copy of the presentation.


Wait and See Year  

As new regulatory frameworks are put place they will eventually flow through and impact the C&E space. The function will need to bend and flex as the road ahead may be rough as we expect budgets to tighten and anticipated changes to legislation, explained Katie Smith, EVP and Chief Compliance Officer at Convercent.

As the conversation shifts to doing more with less, C&E teams will need to find new solutions that provide enhanced operational efficiency to your 2017 (and beyond) initiatives.

For companies in Europe or who do business in Europe, the General Data Protection Regulation (GDPR) – a consequence of the BREXIT decision – will have a significant impact on those involved. The GDPR offers consistency across all member states.

“At the moment you’ve got a patchwork quilt because individual countries are allowed to implement data protection legislation in their own way,” said Keith Read, Managing Director, Europe.

Potential consequences for issues related to the GDPR are significant, such as fines in the ballpark of hundreds of millions of euros.

Anti-Bribery and Corruption (AB&C)

This is a significant issue we see surfacing time and time again, with the recent case at Rolls-Royce being the latest example of the challenge around AB&C. What can happen to companies is that they can end up in what Read calls the “Perfect Storm of Bribery.”

For example, a company is under pressure to move product, they deliver some goods to customs late, customs knows the company needs the products and there is a consequence that creates a perfect storm for bribery as it is a perfect situation to request a bribe in order to move the products quickly through customs. If the company didn’t deliver the products late or under pressure for them, then the ingredients for the perfect storm would not have culminated.

But yet, many organizations are naïve when it comes to AB&C and often fall into the trap.

Minimizing Bribery Risk Through Personal Interaction
Another technique is called Stand in the Space, which is when companies look at all of their transactions and minimize the amount of interpersonal interactions so they stand in the space to prevent requests for bribery or face-to-face transactions or other scenarios where bribery is prevalent. However, there are not many companies around the globe that are committed to a Stand in the Space program.

Bribery and Corruption Related Policies – Getting the Message Across
When penning your next policy around AB&C or simply adding an update, ask yourself two very important questions, which will help the outcome and impact of the policy:

Is it reasonable? For example, is it reasonable hospitality? Is it reasonable gifts?

And if it is reasonable…

Can I reciprocate? Would my boss sign-off for me to do this the other way?

Mergers & Acquisitions Challenges

Merging cultures and doing so effectively, is going to be a challenge for many as companies go global, the workforce demographics change and the pressure on C&E programs grows.

M&As start with risk assessment. There are many organizations that conduct business solely around acquiring other businesses, turning them around and selling them off. What you need to understand if you are involved in something like this as a practitioner in the space, is what are the risks you may be facing – both generic risks to the business and compliance risks specifically. The cultural variations between two businesses can be rather vast.

Goodyear, for example, acquired some businesses in Africa. And while the acquisition went well, unfortunately, the businesses in Africa continued to pay the bribes that they always paid. It was shown those businesses paid some $3.2M in bribes post acquisition. The company was then subject to $16M in fines. This is a prime example of when a company does not get M&A right.

Over time develop a consistent approach to compliance to avoid a similar situation from occurring at your organization, using tools and techniques such as mystery shopping. This technique helps you understand how the acquisition is doing in reality and expose areas that may need adding attention from your office. After the acquisition is successfully managed using best practice due diligence and checklists, it’s about completing the integration but also the remediation of any remaining issues.


Couldn’t make this event? Keep an eye on our Resource Center for frequent updates to our webinar schedule. Our next session in March will be held in partnership with The Ethisphere Institute to discuss our annual benchmarking report. Sign up for seat reservation and registration will begin soon!