We asked in-house counsel and compliance officers to provide examples of issues that arose during in-person training that might not have been uncovered through any other form of training. Most of the examples involved very specific questions about the scope of a definition: is an employee of a partly-state-owned entity a government official? Do gifts provided publicly at contract signing events, after the business has been awarded, need to be scrutinized for FCPA implications?
What follows is another example, provided by Vince O’Connor, Vice President for FCPA Compliance at L-3 Communications Corporation.
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“When I was appointed as the Compliance and Ethics officer, one of the many goals set for me was to train all “gatekeepers” (those involved in foreign activities) on the FCPA. One issue arose repeatedly. When it came to defining international consultants there was some confusion as to whether a U.S. company located in the U.S. should be considered an “International Consultant”. This is true in spite of the fact that our Policy states that an International Consultant is: “A person, partnership, association, corporation or other organization located in the United States or abroad, that is retained by the company to provide professional or technical advice relating to the international sale of the company’s products and services, to provide professional or technical advice relating to investments made by L-3 abroad, or to otherwise interact with foreign governments, political parties or foreign candidates for political office on behalf of the company.”
One employee asked during training about a consultant that advised his team on how to conduct business in several foreign countries. When asked if the consultant ever traveled on behalf of the company to foreign locations the answer was “yes”. When questioned further it turned out that the consultant frequently traveled to foreign countries with senior company officials and the visits included meetings with foreign government officials. Because the consultant was with a company official, the employee did not consider the consultant to be acting on behalf of the company. One of the many dangers in this analysis is that the consultant may go back to the same foreign official without a Company official present, creating an impression that the consultant is representing the Company. In fact, his very presence at the initial meeting may be sufficient for the government official to consider him a spokesman for the Company.
This issue, which represents a possible gap in an otherwise robust compliance program, would not have come to my attention if the employees in question hadn’t had a chance to ask their questions in a live training forum.”
Four of the nine commissioners from Thailand’s National Anti-Corruption Commission spent this week in Washington describing their anti-corruption efforts and learning more about the American model. I had the opportunity to meet with them informally earlier today. They are a committed and forward-leaning team. They maintained a rigorous schedule all week in order to make the most of their time in Washington.
By the time we met, they were conversant in the language of FCPA enforcement, but they hadn’t heard of facilitating payments. When I asked their opinion of this exception under the FCPA, they first looked a little embarrassed for me, — as if I couldn’t possible have it right. When I insisted, they looked startled. In a lively exchange, we discussed the exception under the FCPA using, for example, US companies making payments to Thai customs officials to expedite routine, non-discretionary tasks. When they finally concluded that the confusion couldn’t be chalked up to a linguistic problem, they looked quite horrified. “We would consider that a bribe. We would prosecute that.” And, finally: “If that is in your law, please fix it.”
We complain about the constant harassment abroad for petty pay-offs and the failure on the part of foreign enforcement agencies to deter bribe-demands by their government officials. It’s worth considering the message we send when we explain to these officials that, when it comes to facilitating payments at least, they’re on their own.
Employees who believe themselves to have a strong moral compass can be hostile to the suggestion that they need compliance training. Kate Atkinson of Miller & Chevalier describes this training dilemma and offers some suggested responses.
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“One of the more common challenges in anti-corruption training is how to train employees who believe that because they are ethical people, they will not get themselves or their company into trouble. These employees lull themselves and their companies into a false sense of security. In a sense, companies can overachieve on building a culture of ethics, and compliance can start to fall off, in small but important ways. In conducting compliance audits, it is not uncommon to find a pattern of compliance lapses alongside a high level of employee confidence in adherence to the program. Typically, those lapses appear in expense reporting, invoice review, contracts compliance, and third party due diligence and monitoring.
In these circumstances, training needs to wake up the audience and reinvigorate the compliance effort. Remind employees why compliance — all of the time, not some of the time — is critical. Set the stage by making clear that policies and procedures help the company and its employees bridge the gap between ethics and legal compliance, which overlap, but are not the same. Show how the program serves both as a real-time trip wire for potentially corrupt activity or other compliance failures, and as a record of the company’s compliance rigor should auditors or enforcement officials come looking with 20/20 hindsight. Delve into specific examples of lapses and near misses, and how those events if left unaddressed tend to multiply over time and create risk for the company and its employees. Thanks to active enforcement, there is always a case or two to help you illustrate the last stop on that slippery slope.”
Last week’s posting on anti-bribery training challenges generated a lot of interest. To follow-up, this week we will post a series of short pieces on training tips and challenges. We invited Jean-Pierre Méan to provide a European perspective. Jean-Pierre is the former General Counsel and Chief Compliance Officer at SGS, a leading international inspection company, and is now President of Ethic-Intelligence Switzerland. He has an extraordinary amount of experience managing these issues in some of the most challenging countries.
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Training is no doubt an essential element of any compliance programme. It would indeed be naïve to believe that disseminating a Code of Conduct necessarily means that those to whom it has been sent will read and understand it even though they may sign a document attesting to it. In order for a Code of Conduct to start to be effective, staff must be trained. In order for the message to remain alive, they have to be retrained at regular intervals.
But what is it exactly that has to be communicated? Those advocating a legalistic rules-based approach will argue that what should be conveyed in the training is a functional knowledge of the provisions of a Code of Conduct and related policies, such as the dollar limits applying to gifts made or received, while those favouring a values-based approach will want the training to transmit the underlying values, such as the likelihood that a gift will influence the recipient.
Not surprisingly, the values-based approach is prevalent in Europe where Codes of Conduct are essentially conceived as self-regulation tools of the corporate world, while the rules-based approach is prevalent in the United States where the main goal of compliance is to avoid or alleviate corporate criminal liability.
In order to be effective, training will have to incorporate both aspects. However, while the transmission of pure knowledge is unlikely to make much of an imprint if the underlying thinking is not assimilated, a good understanding of the values involved should enable staff to make correct decisions even if they do not remember the applicable rule. Indeed, those equipped with a solid ethical compass may not always make the right decision while operating in a grey area, but they will have no difficulty confronting difficult situations. By contrast, knowledge of the rules will not prevent major integrity failures in cases not covered by any (recognisable) rule.