Compliance and Ethics in Review: August 31, 2018

The Latest and Greatest Industry News

Microsoft faces FCPA investigation, California takes action on #MeToo, and global brands warn against inconsistent immigration policies.

Each week, Convercent highlights some of the top stories and most newsworthy events in the ethics and compliance industry. The focus is global, but you might be surprised by how relevant these stories are, both across borders and businesses.

Microsoft Investigated For Alleged Bribery and Corruption in Hungary


Under the Foreign Corrupt Practices Act (FCPA), the U.S. Justice Department and the Securities and Exchange Commission are investigating Microsoft for an alleged arrangement with Hungarian government officials. According to the investigation, Microsoft was using a middleman to buy their software at a discount. The middleman then sold the software to the Hungarian government at an increased price and government officials received a portion of the difference.

Microsoft says it became aware of “potential wrongdoing” in Hungary in 2014, and pursued an internal investigation. Multiple employees and partners were terminated as a result. Since then, Microsoft says it’s been defending itself against legal claims raised by the terminated parties.

Despite President Trump’s 2012 statements against pursuing bribery in other countries, Attorney General Jeff Sessions reinforced the Justice Department’s commitment to enforcing the FCPA and other anti-corruption laws in April, 2017.

‘Companies Need To Establish Effective Communication Processes With Third Parties’

Establish communication

Join BW Businessworld for an in-depth interview with Anthony Crasto, partner in the Risk Advisory practice for Deloitte India. Crasto discusses organizational risk management, while answering questions specific to supply chain and third party risk. The interview also addresses the role of Chief Compliance Officer in India, where companies are lagging on compliance directives as compared to global companies.

Gain insights into assessing compliance frameworks for effectiveness using Crasto’s five points of appraisal, focusing on three main elements; people, process and technology.

Laura Noren advocates data science ethics for employee info

data science ethics

Laura Noren, director of research at Obsidian Security, talks about the ethics of data science in the tech industry. The current trend is to gather as much data as possible on both customers and employees, despite there not necessarily being a reason or plan for using the data in the future. As people become more aware of how and where their personal information is being collected and stored, it’s necessary to consider the ethical implications.

Noren discusses how organizations can continue to collect data in an ethical capacity by being transparent and communicative. Instead of burying data collection practices in a long legal document that requires agreement before doing business or getting hired, remind people of how they can prevent their data from being sourced and enact the right to be forgotten.

California lawmakers limit nondisclosure agreements

#MeTooCalifornia has taken a step forward in the aftermath of #MeToo to bar forced arbitration and nondisclosure agreements. The pending bill prohibits employers from requiring nondisclosure agreements related to sexual misconduct as a condition for getting or keeping a job. While organizations could still require arbitration, it can not be a condition of employment.

With widespread support from state senators, celebrities and the #MeToo movement, the bill was approved by the state Senate, 25-12. Republican Sen. Jeff Stone of Temecula was the only senator to speak out in opposition, claiming the bill would deter companies from growing or staying in California and put more stress on already overwhelmed courts.  

Dozens of CEOs ask Trump administration not to change immigration policy

American flagSome of America’s biggest companies are coming together against the Trump administration’s immigration policies. In a letter to Homeland Security Secretary, Kristjen Nielsen, organizations with big reputations, including Apple, JPMorgan, Pepsi, AT&T, Coca-Cola, IBM and Bank of America warn that “Inconsistent government action and uncertainty undermines economic growth and American competitiveness.”

CEOs are particularly concerned about changes to the H-1B visa that is provided to highly-skilled workers who often hold degrees in science, tech, engineering or math. The letter argues that the confusing and unpredictable immigration policies could encourage H-1B visa contenders to find employment in different countries, thereby putting the American economy at a disadvantage.