If you are watching the “Big Game” Sunday Feb. 7 (or the “Big Pre-Game” or the “Big Post-Game”), and a pithy thought pops into your head about ethics, or compliance, or business leadership and culture, please join me in using the hashtag #SB50Ethics. And if you just want to see what E&C oriented folk are thinking, then follow #SB50Ethics.
No pressure. It’s not a live-blog, something happening every 30 seconds, must write thing. Just thought I’d suggest a single social media home for our collective musings, however casually they are offered.
Will we really be thinking about ethics between the wings, beer, and commercials, you ask? Oh, yeah.
An advance workshop on drafting and negotiating contracts with compliance provisions — this would take the next step from the compliance contract panels that Amy and I did at the CEI in 2014 and this year.
“The Good Reasons Why People Do the Wrong Things” — Exploring the frequent instances when people follow their own ethical code and choose to break rules. (Think about teachers or nurses following their deep ethic of care.) The lesson: it’s not just greed or “bad guys” that lead to misconduct.
“Fostering a Speak-Up Culture: What Really Works” — Now more than ever, it’s critical for compliance professionals and business leaders to focus on what, objectively, has worked best to foster and maintain a culture in which people report suspected wrongdoing freely, constructively, and internally. So how do you make that happen?
I wish they’d let us do all three of them! So tell me, what’s your favorite?
As compliance professionals and leadership counselors, we focus on “tone at the top.” What the C-Suite says is critical to establishing an ethical culture in an organization. What is even more important to foster that culture is whether top executives speak and act consistently. We advise our leaders that even one act of apparent hypocrisy, or of “looking the other way,” can undo a lot of cover-letters-with-Codes-of-Conduct.
With this perspective, I commend to you two recent blog posts by fellow compliance lawyers, about the tone coming from the very top, compliance wise: the Department of Justice.
One is Mike Scher’s post this week in the FCPA Blog about the DOJ’s findings that downplay the alleged corruption violations by WalMart in Mexico.
At the SCCE’s annual Compliance and Ethics Institute earlier this month, I perceived a consensus of approval among the compliance community for the DOJ’s September 9th “Yates Memo,” in which Deputy Attorney General Sally Quillan Yates sought to send a strong message that the DOJ would henceforth be eager to prosecute culpable individuals for wrong-doing within the corporations they lead. There were many concerns (see this and this), yet the general thought seemed to be that the tone set by the Yates Memo would reinforce our efforts to get buy-in within our companies.
But Mike Volkov raises this concern: with the GM case (as now with WalMart), do the DOJ’s actions speak louder, tone-wise, than Yates’ words?
As important as it usually is that “Compliance” be independent from “Legal,” there are realms in which it’s best when those two functions are full collaborative partners. One of those is the realm of contracts with third parties.
That was an inescapable take-away from a session on October 5th at the SCCE’s annual Compliance and Ethics Institute: “Peer-to-Peer Compliance: Are Y
our Contract Clauses Running Offense and Defense For Your Ethics and Compliance Program?” I had the honor of presenting the session, with Amy Hutchens of CLEARresources. I also had a complete blast, pretending to negotiate typical clauses with Amy, fielding questions about covenants that troubled SCCE colleagues in the audience, and sharing our lessons-learned.
Lessons such as?
That the intersection (collision?) of transactional law and corporate compliance is happening more often, as companies pay more attention to the risks their third-party relationships can pose, and authorities from the Sentencing Commission to the FDA voice their expectation that these risks be managed contractually.
That a careless clause can damage the structure or credibility of a company’s compliance regime – but a legal department engaging in zero-sum negotiations, without benefit of a partner from compliance, might miss that risk.
That there are two strategic extremes for the company in the “prime contractor” role, each of which can be problematic: Unyieldingly insist on the most favorable language for your side, and eager vendors may agree even though they know they cannot follow the contract they signed. Take an overly flexible position, open to each vendor’s full range of concerns, and your resources may get nibbled to death while you wind up with no predictable consistency among your agreements.
What’s an enlightened company to do? First, consider your goal – is it to get a signed document full of hard-ball victories, or to have third-parties who are actually working with your guidance to engage in compliant behavior? Assuming it is the latter, your company may be better served by living its core values even in its negotiating style, and by taking a firm, comprehensive, but reasonable form of contract to market. And for that to happen, “Legal” and “Compliance” must work together, and understand the other’s issues.
If you missed the session at the CEI – or if you missed the CEI altogether – no worries. We are reprising the session in the form of an SCCE Webinar, on Tuesday, October 13th. Please join us!
If you are coming as well, I hope you will join Amy Hutchens and me at 1:30 on Monday, October 5th, to explore the increasingly frequent intersection (collision?) of transactional law and corporate compliance.
Our program is titled, “Peer-to-Peer Compliance: Are Your Contract Clauses Running
Offense and Defense For Your Ethics and Compliance Program?” (If you’re keeping track, it’s session #205.)
And even if you are not coming to #SCCEcei, good news! You can still catch our panel, in the form of an SCCE Webinar, on Tuesday, October 13th.
This is our updated remix of the well-received panel we did at the 2014 #SCCEcei. Part of what makes it so much fun is that Amy and I begin the hour by engaging in mock negotiations. Amy plays the lawyer for the big multinational company, I play the lawyer for the smaller vendor/supplier, and we go at it hammer-and-tong over issues like:
Which Code of Conduct should apply to a Vendor?
What training requirements can a general contractor “push down”?
What sales incentives are appropriate?
How can a smaller entity resist onerous auditing. monitoring, and indemnification requirements ?
(OK, I might have shown my character’s bias in that last bullet point.)
After the negotiations, we’ll offer some lessons we’ve learned as compliance-minded transactional lawyers and in-house counsel. Then we’ll open it up to questions, and to any thorny contract clauses with which you might want to challenge us.
This year, we will also spend some of our time on the phenomena of “Quality Agreements,” which are increasingly common for contract manufacturing in the life sciences.
Our point is, when it comes to your company’s routine contracts, the right clause can really bolster your E&C program – and the wrong clause can wreck all your careful work. The trick is knowing which is which, and playing offense and defense so that the contractual playing field leaves your client best positioned for success. That’s something that is not going to happen unless the “legal” and the “compliance” camps in a company work together, and understand the other’s issues.
If you are inclined towards the Orange and the Black and this weekend you are “Going Back” (that is, if you are going to Princeton’s Reunions this weekend), then I invite you to check out a panel I am participating in tomorrow, on the topic “Whistleblower: Tattletales or Heroes?” The panel is one of the Alumni-Faculty Forums that showcase Princeton’s faculty and the expertise of its graduates.
I’ll be joined by Mark J. Biros (Class of ’70), Founder of the White Collar Defense and Investigations group at Proskauer, and Norm Champ (Class of ’85), who until recently was Director of the Division of Investment Management at the SEC and is now a Visiting Scholar at Harvard Law. Our moderator will be Brandice Canes-Wrone (Class of ’93), the Donald E. Stokes Professor at the place I majored, Princeton’s Woodrow Wilson School of Public and International Affairs.
I am sure we will be surveying the state of whistleblowing, and exploring what I think are the highly divergent views that we have of those who “speak up.” On the one hand, corporate compliance programs depend on them; on the other hand, they are “rats” and “disloyal.” Does it just come down to whether they are correct in their reports, or is there more to it? I’m really looking forward to being a part of the discussion – and I will report back on how it goes!
Last Sunday, three of us compliance lawyer types had ourselves a virtual Oscar Party.
We three – Amy Hutchens (CCEP), President of CLEAResources; Kirsten Hotchkiss, now an employment and employee relations counsel with American Express Global Business Travel, and I (President of LeadGood, and also CCEP)– conducted an experiment with the following hypothesis:
IF the leaders of an institution, through their every message and action, set a “tone from the top” that either fosters or undermines the ethical culture of that institution; and
IF the culture of our nation – an institution we all share — is in part determined in those rare events that a large proportion of the population share in-common;
THEN an ethical “tone at the top” will be set by the cultural stars and leaders who speak and act during the massively multi-person annual event that is the Academy Awards.
Amy, Kirsten and I made that hypothesis the topic of a “live-blog” that we conducted Oscar-night on my company’s website. We watched the Oscars along with everyone else, and reacted in real time to those things that compliance lawyer types notice. (You can still read our stream of observations and musings here.)
Our hunch going in was that we might hear a few moments of ethical leadership, and maybe a few ethical gaffes, among the presenters, red carpets types, and the commercials of the Oscar telecast. To our surprise, we (along with the rest of the billion-plus viewership) wound up hearing an almost continual series of stars speaking out forcefully and fervently for noble causes that should command our attention. Just in the acceptance speeches, we heard advocacy for:
Gender Equality (Best Supporting Actress)
A.L.S. (Best Actor)
Alzheimer’s (Best Actress)
Whistleblowers (Best Documentary Feature)
Teen Suicide Prevention (Best Adapted Screenplay)
Returning Veterans (Sound Editing)
Civil Rights (Best Song)
Immigrants’ Rights (Best Picture)
Calling Your Parents (Best Supporting Actor)
As the New York Times put it, “Oscar nights usually do have their share of political posturing, but this was a particularly passionate evening. “
But there was a tone from the top, and it was this: “Speak Out for your Beliefs! Take Action to Help Others!” It was Corporate Social Responsibility Night at the Movies. Hooray for Hollywood!
Seriously, Oscars 2015 was a big-time, highly public, star-studded endorsement of a speak-up culture. (Even the Lego Movie’s brainwash-the-citizenry song, “Everything is Awesome,” lost.)
But on reflection, I wonder if all those appeals blurred together, and if any of them still stand out in the memory of most viewers. It was almost as if the message was, “Everyone has their own cause – so any cause is right.” Having heard so many appeals for action, viewers may have felt ironically unmotivated to action.
So I ask: Was the experience of the Oscar viewer on Sunday that different than the experience of our employees, in this time of the multi-modal, socially savvy, short-message-oriented, compliance communications program? I happen to love the practice of delivering compliance information in shorter bursts at higher frequencies, of “social learning streams” and the like. If we’re not careful, though, does it sound like this?
Don’t discriminate! (HR).
Wear safety glasses! (EH&S).
No gratuities! (Commercial Compliance).
Donate! (United Way).
Protect our Trade Secrets! (General Counsel).
Protect our Company Data! (IT).
Follow our Code! (CCO).
If our quick compliance hits seem a blur, then the Oscars may have offered two lessons for our programs.
First, Focus. Too many emotional appeals may leave me numb. Too many instructions at once may strain my memory. If everything is important, nothing is important. (Maybe those programs that stress a theme-of-the-month have the right idea.)
Second: don’t just send a message; tell the story. “Still Alice” had a compelling message about Alzheimer’s, and “American Sniper” about veterans and war, because of the power of their storytelling. The movies had the time, and craft, and humanity to make a social issue real. By contrast, the short plugs in the acceptance speeches at the Oscars were only reminders: they returned an issue to the front of mind, and reminded us of something we care about. That is an excellent thing to do in the short nuggets we have added to our compliance messaging.
But the power behind those messages originates in good old-fashioned storytelling. And even in this social age, it is the story that provides the inspiration to act.
Hooray for Hollywood!
P.S. Since our little experiment worked, we’ve resolved to do our “Ethics and the Oscars” live blog again next year. Hope you can join us!
(Note: A version of this post also appears on LinkedIn.)
Our focus tonight, as we watch the OSCARs, is on the little messages in the speeches, the commentary, on the carpet, and in the commercials – those little messages that can reinforce or dismantle an ethical culture.
There are theaters full of other, more learned critics of the movies. But those little messages are among the canvases on which we work.
Each of the three of us blogging tonight are lawyers; we’ve been in-house corporate counsel and compliance leaders; and we each have (or have had) our own private practice in ethics and legal compliance. In short, we like to help organizations and their employees do the right thing – and that begins with ethical leadership.
Amy Hutchens, JD, CCEP: Amy is President of CLEAResources. Previously, Amy was General Counsel of Watermark Risk Management International, a Special Assistant United States Attorney and an Air Force Judge Advocate. www.linkedin.com/in/amyhutchens
Kirsten Hotchkiss, Esq: Kirsten is Vice-President of Global Employee Relations at American Express Global Business Travel, and the founder of HotchkissLaw, LLC. Previously, she held multiple legal and compliance leadership positions for Wyndham Worldwide. www.linkedin.com/in/kirstenhotchkiss
Jason B, Meyer, JD, CCEP: Jason is President of LeadGood, LLC (which is hosting this live blog). For more than 20 years, he’s helped lead companies involved in legal and compliance education; he’s also a former Chief Legal Officer and Compliance Officer.
Our views are, as they say, our own, and not necessarily those of our respective employers and organizations.
Please join me in congratulating Donna, who is being most-deservedly honored “for her tireless dedication and unwavering support for the independence of the compliance and ethics profession.” If you follow Donna on Twitter (@DonnaCBoehme), you will see what I mean – and like me, you will get the value of her strong and experienced analysis.
I’m really looking forward to my upcoming presentation to the annual Compliance and Ethics Institute of the Society of Corporate Compliance and Ethics.
The topic is: “Are Your Corporate Contract Clauses Running Offense and Defense for Your Compliance Program?”
It should be a lot of fun – seriously! Amy Hutchens and I will engage in some lively mock contract negotiations as we explore these bullet points:
An effective program must reach beyond the boundaries of your company; do your company’s contract clauses give your program room to operate to its fullest potential?
Discover how to play offense and defense with your program using contract clauses – learn about common limitations in contract clauses that could tie your hands if something goes wrong.
Hear how agreeing to certain contract clauses can bind your company to complying with another company’s program – and how to negotiate terms that your program can live with.
Among the common contractual issues we will use as examples are: whether to agree to follow another company’s Code of Conduct; and whether a vendor can agree to let its client dictate the terms of its bonuses and the topics in its training program.