The following interview is with Leas Bachatene, CEO at ethiXbase.
Hi Leas, thank you for participating in today’s Q and A. I have really enjoyed working with the ethiXbase team, including on our recent White Paper and at the September 15th event in Houston on “Crime, Cooperation, and Compliance.” So, Leas, first, perhaps you can share some of your background and experience that led you to ethiXbase.
LB: Thank you, Richard. I must say it has been very enlightening working with you. In fact, your keynote presentation at the Houston event which we hosted last month was key in making the event a success. All attendees commented that they thoroughly enjoyed hearing from you. Particularly your thoughts regarding the ‘circle of lies’ whereby third party intermediaries conspire with company employees to circumvent even the most robust and well-intentioned onboarding and vetting process.
To your question, my background is like many professionals within the field of compliance. As times have changed, the importance, scope and size of compliance as a professional field has grown. I like many others started my career outside of compliance, namely in the Oil & Gas industry, on an oil rig somewhere in the middle of the North Sea between Scotland and Norway.
Quickly realizing my true calling in life was not to be a Piping Designer in the middle of a freezing ocean, I moved into the information services industry and joined a leading provider of compliance solutions for the financial services industry – the rest is history. I have since found a field that not only am I truly passionate about but much like many professionals in this space, a domain that only increases in scope as regulatory pressure mounts and the need for compliance is recognized across industries and the globe.
Leas, there is no shortage of third-party due diligence providers, but as you and I have discussed, the approach of ethiXbase is quite unique. Perhaps you can share some of that, including the Ethical Alliance Community.
LB: Well to start, ethiXbase is not just a due diligence provider. We are an organization committed to making a difference by empowering organizations, no matter their size or budget, with compliance solutions to assist them to increase transparency and stamp out corruption.
We do this firstly by connecting individuals through the global Ethical Alliance community where like-minded professionals can actively exchange ideas on knowledge and best practices while benefiting from our Anti-Bribery & Corruption certification and the expert guidance of the Ethical Alliance Advisory Council.
Secondly, we work closely with our clients to partner with them through every stage of their corruption risk life cycle. Working as their extended compliance arm, we support the entire third party management process from surveying to onboarding, benchmarking, verifying, monitoring, reporting, educating and certifying. In Asia for example, we work with multinational organizations to manage their third parties through a connected approach involving due diligence, ongoing monitoring, and classroom training.
I recently read a few ethiXbase White Papers, including “The Problem with Supply Chains Today,” which I thought was extremely relevant and engaging. You talk up front of the “challenge of knowing who you’re doing business with” and go on to highlight the increasing risk as senior executives are now being held responsible should come to light that the company associated with an individual or entity involved in corrupt practices. In the context of today’s enforcement environment what are companies getting ‘wrong’ with respect to this risk?
LB: I believe there is a broader issue here. Instead of examining what companies are getting ‘wrong’, we need to address what regulatory authorities, stakeholders, and multinationals can do more of to motivate compliant behaviour and practices within the industry. Having come from a background in Financial Services, there is no question that the financial services industry is far more regulated than non-financial corporates. The gap between these two ‘industries’ if you will is too wide. This leaves corporates and their third parties crying out for guidance as regulatory scrutiny steadily increases.
The paper states that “there needs to be an understanding of where high risks lie and a decision made as to what corporate goals are worth pursuing, changing or abandoning in the face of this risk.” I think that presents a very real-world challenge, in terms of operating in high-risk, low-integrity regions, where perhaps a clear-eyed view is required before committing personnel and resources. Do you see companies making these hard choices, or is it more of an incremental approach where risk is analyzed once boots are ‘on the ground.’
LB: This is a challenge we see constantly as organizations seek out new territories and regions for greater business potential or cost saving opportunities. As businesses expand into new areas, compliance considerations are often a secondary to the perceived potential for economic gain. However, just because a region is perceived to be ‘high-risk, low-integrity’ does not mean that a business relationship cannot be formed if an organization has the right compliance framework in place. I firmly believe we all need to ask ourselves what can be done at an individual, organizational and/or government level to increase transparency in these ‘high-risk, low-integrity’ environments. Authoritative measures are needed to drive a bigger influence at a nation-wide level in these regions to change what is currently a way of life.
As large organizations move into these territories they bring with them a certain amount of influence, whether it be through employment or contracts, or the boost to a regional economy. Organizations must consider not only the risk of doing business in these regions based on the potential for corruption (as an example) but also their ability to uplift the community’s business culture and mindset. We have seen this being driven throughout Asia, not just by government bodies but also large multinational firms.
At ethiXbase, we support these activities through the Ethical Alliance Anti-Corruption Program, assisting organizations not only to set a strong tone from the top when it comes to ethics and compliance but also to know who they are doing business with, manage those relationships and ensure their staff and third parties are being trained on the ground in what may be now be considered ‘high-risk, low-integrity’ regions. Though we hope through this activity, this will not always be the case and I have no doubt many share our aspirations as well.
Thank you, Leas. Is there anything you would like to add?
LB: Only to thank you for this opportunity Richard and to encourage your readers to visit our website at ethiXbase.com and join the Ethical Alliance as a free Associate Member. I personally believe we are doing a lot of exciting things and with close to 40,000 Associate members we are rapidly gaining traction. I can also be reached directly at leas.bachatene@ethixbase.com should your readers have any questions in regards to what we have discussed today.
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