Updated: Sep 11, 2020
This past November, I had the pleasure of sitting down with Sean Freidlin, Marketing Manager of Compliance & Ethics at SAI Global, www.saiglobal.com at The Little Beet Restaurant in NYC, to discuss my history with compliance, bribery, corruption, and the FCPA for a recently published eBook.
The restaurant describes its gluten-free menu as “wholesome food that makes you feel real good about eating it, and even better after.” For two people in the compliance & ethics field, we could appreciate the ambitious goal of producing something that makes a positive impact on people in the short term and long term.
Somewhere between the cauliflower hummus and roasted squash, we discussed some of my favorite books from 2016 about the impact and psychology of bribery, corruption, and unethical behavior. If you’re looking for a good read while on vacation, or a holiday gift for your friend (or compliance officer), these 7 books are perfect for a plane, a beach, or a commute to the office.
You won’t go wrong with any of them, but if you want to know more about a specific title, feel free to e-mail me at email@example.com
But back to lunch! As I shared with Sean, doing the wrong thing changed my life, and I hope the lessons learned are valuable for compliance and ethics professionals and their colleagues whose behavior they hope to steer in the right direction. As I once heard a CEO of a major multinational share, “the challenge of compliance leaders is to inspire people who are outside their organizational perimeter, yet who are on their team.”
That’s not always easy or intuitive. So, with my thanks again to Sean and SAI Global, below you’ll find an excerpt of some of the insights that we shared during our gluten- free interview!
SF: Richard, considering what compliance and ethics programs look like today, and will look like in the future with technology, is there anything you think would help those on the front-lines of international business and those in compliance who are tasked with supporting their work? In other words, how can we best operationalize compliance? We know that not all risk is created equal.
RB: Well, what I tend to focus on is the behavioral aspect of compliance and ethics, and how programs engage and inspire people on the front-lines. So, as I often reflect, is compliance in the field being embraced or distorted to the demands of business growth? In other words, do people in the field consider themselves as the recipients of compliance or compliance ambassadors?
One thing that’s clear is the behavior precedes the bribe, so I always try to pivot the discussion to “how can a compliance program impact how people think?” In my opinion, a rules-based compliance program, one that is articulated through policies and procedures, while a necessity, doesn’t inspire a workforce. As Ann Tenbrunsel and Max Bazerman address in Blind Spots, compliance programs can “contort the decision-making process.” How? By having a program devoid of a greater ethical discussion and awareness. Sean, I never thought about the ethical consequences of my decisions. I wasn’t spending my evenings on the Transparency International website, thinking about how bribery degrades human rights, economic development, and social progress.
I was thinking about it as a win-win, because who was really getting hurt? I wasn’t messing with the integrity or quality of the products I sold. The client got a great product, the intermediary moved on to the next opportunity and I made my bonus, quota, and forecast. And the public official who is the bribe recipient, who may be making next to nothing from a salary perspective, gets a little something extra to make ends meet.
Professor Francesca Gino co-authored a paper, “Self Serving Altruism” where she addresses the dynamic of how, when one’s unethical decisions benefits others, they come to be thought of as altruistic and morally permissible. It’s scary stuff and not to be discounted. It’s a great paper Sean, and if anyone would like a copy, just email me here. But from inner city hotels and fine restaurants, there’s an unhealthy ethical distance between where business gets conducted in these frontier markets, and the general population at large, which suffers significant harm due to corruption, even petty bribery.
To address and mitigate that illusion, you might want to unpack Chayes Thieves of State or Burgis, The Looting Machine, which might be a good start for front-line personnel to think about how their conduct impacts society at large. There are unintended consequences of bribery that you can’t find in a compliance manual, from safety to human rights. When field personnel think of their conduct as “I don’t bribe or feed corrupt governance” as above “I don’t violate the FCPA,” that’s a good start.
SF: So, Richard, what’s a compliance officer to do to address these illusions and hopefully remove their influence on front-line thinking?
RB: So, when I talk to compliance leaders, I encourage them to show their vulnerability and humanity to demonstrate to the field that they embrace the reality that compliance looks a lot more complicated in the field than it does at HQ. That means a lot to those who work far away from home in challenging commercial environments. Compliance officers need to communicate that they want their commercial teams to be successful, that they want to be a trusted partner, but that they also care about keeping people out of harm’s way.
And all those messages point to one critical moment: CALL US IF YOU ARE NOT SURE. That’s the moment where compliance and commerce collide. Let your teams know that “while we might be upset by what you share with us, if we are upset, it means that conversation is going well, because now we have a problem that we can fix together.” In other words, “if you tell us about it, we will work on a solution as a team, but if something comes to our attention via internal investigators or an enforcement agency, well, then it’s too late”.
But it’s a door that swings both ways because people in the field need to embrace their responsibility to speak up. When they see compliance missing real-world risk, they need to share that information and not keep it to themselves. People in the field need to understand that good news can wait, but bad news needs to be shared quickly, and with the same fidelity.
SF: Richard, what about local cultures?
RB: Sean, compliance personnel should not discount the impact of local cultures.
A German social psychologist, Jamie Lee-Campbell, calls it the “Cocoon of Corruption.” You start to trust the people who are in your circle and a micro-culture develops to get things done. You start distrusting the support systems and mechanisms that are there to help you, because you don’t think they understand the risks you face and how to engage in these environments.
The thinking becomes “compliance doesn’t know what it’s like out here, and what I’m up against” which is to everyone’s peril. In my case, that got reinforced as I met up with peers and competitors at trade shows and hotel bars, where war stories on corruption were exchanged. That has a profound effect, which I still hear today, on, “if I don’t do this, someone else will.”
I hate to talk in clichés, but it really is a slippery slope. I don’t think compliance officers always appreciate the impact of behaviors that such environments can have, especially in frontier markets, where corruption risk and lucrative business opportunities are intertwined. So, I think the challenge remains in getting teams to keep their ethical north no matter where they are.
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