The Best Compliance Reads Are Not About Compliance
Lately, during a number of webinars and speaking engagements where I frequently cite the work of what I consider to be thought leaders in anti-bribery compliance, attendees have asked me afterwards “can you send me a copy of that article,” or “who was the author of that book?”etc. However, what is interesting is that the papers and books which I reference, and which I think of as extremely relevant to anti-bribery compliance, are not about compliance. They address behaviors, business strategy and the consequences of corruption, among other relevant issues, but they are not stand-alone compliance thought pieces. Yet they address issues that I consider to be extremely important and pertinent to those who operate at the front-lines of international business and to those executives who are tasked with supporting them to manage corruption risk.
So, here is my list, which I will continue to update on my newly launched e-mail subscription service (see right column for sign up). To be fair and consistent, I have included links to the author’s website where they exist, or otherwise to the Amazon purchase link. In the case of papers, I have either linked them on this site for download, or you can e-mail me for copies at Richardtbistrong@gmail.com
Finally, I have had the pleasure to engage with almost all of these authors, either through e-mail, video and for many, face to face. Thus, I consider myself extremely fortunate and honored to be in a position where I can not only read these works, but to speak and correspond with these thought leaders on an individual basis, as allowing me to absorb more of their perspective and experience. Also, I have tried to do my best to annotate correctly, so any errors are my own and feel free to e-mail me with corrections.
Some of the best books about #antibribery and #FCPA are not about #compliance
Chayes, Sarah. Thieves of State, Why Corruption Threatens Global Security. (New York: WW. Norton & Company, 2015) Not only did I have a chance to interview Ms. Chayes for a two-part article (here and here), but I also had the pleasure to hear her speak at Yale University. For those on the front lines who think of small bribes (as I once did) as a win-win at the field level, read this book. The illusion that bribery has no victims is replaced by the detailed description of criminal enterprises “masquerading” as governing regimes and small bribes are nothing but the tributary waters into that ecosystem. Ms. Chayes does not share her perspective from the comfortable quarters of the corporate “ivory tower”, but rather from a “boots on the ground” experience in some of the highest-risk regions that we might think of in today’s security environment, including Afghanistan. As Ms. Chayes shares, that experience “taught me a great deal about systemic corruption and all the reasons that can be dreamed up for ignoring it.” Author’s site here.
Feinstein, Andrew. The Shadow World: Inside the Global Arms Trade. (London: Penguin Books, 2011) Mr. Feinstein’s Shadow World is the tour-de-force on corruption into the global arms business and like Ms. Chayes, this work demonstrates the awful consequences of bribery upon societies and individuals. It is a sad but true treatise of how corruption went unchecked for so long, with a story that continues to unfold. The research and detail in TSW is extensive, impressive and leaves no stone unturned in describing the proliferation of corruption and secrecy in the arms trade. As Mr. Feinstein states in his introduction “the trade in weapons is a parallel world of money, corruption, deceit and death. It operates according to its own rules, largely unscrutinized, bringing enormous benefits to the chosen few, and suffering and immiseration to millions.” While that intro might sound like quite a generality, the next 531 pages address the global details which support those reflections. My question remains, is it still happening? Author’s site here.
Gino, Francesca. Sidetracked, Why Our Decisions Get Derailed and How We Can Stick to the Plan. (Boston: Harvard Business School Publishing, 2013) Full disclosure: I wave this book around at every speaking engagement. Literally! When combined with “Self Serving Altruism? When Unethical Actions that Benefit Others Do Not Trigger Guilt,” Working Paper with Ayal, Shahar and Ariely, Dan. (Boston: Harvard Business School, 2012), you now have a behavioral road map into the world of corruption. If you want to know why well educated and compensated employees (as I was), would make ethical choices that involve real world risk (as I did), this book and the referenced paper are must reads. The implications of Professor Gino’s work upon the world of anti-bribery compliance are nothing less than profound, as she shares “the line between what is right and wrong blurs, especially when we are going after short-term rewards, such as a promotion or financial benefit” as but one example. Furthermore, conclusions such as those are backed up by extensive behavioral research, of which Professor Gino shares the results and methodologies within each chapter. As Professor Gino states, and I use her work as an academic pivot to my own experience “subtle factors can lead us astray,” but in combination, we can, at the end, get totally “Sidetracked.” If you want to better understand how these factors interplay with rationalization and justification at the front-lines of international sales, this is your book! Author’s site here.
If you would like a copy of the Self-Serving Altruism working paper, feel free to e-mail me at email@example.com
Kennedy, Alan and Thomas E. The Alpha Strategies. (Lexington, Xlibris Corporation, 2013. As I often ask, can business strategy in itself be a potential red-flag for corruption? In this work, Alan and Thomas Kennedy take strategy out of the organizational silo and look at how it impacts an organization. See here for my complete review of this very engaging book which has great relevancy to anti-bribery compliance, which from my perspective, starts at the strategic level. Do you think that risk and growth should be treated separately? Well, as the authors state, The Alpha Strategy, as their structural and process paradigm “enables boards, management, and employees to understand and agree upon current strategy.” And the reason that is so important, is that if you don’t understand current strategy, how can you shape future strategy? Authors site here.
Silverstein, Ken. The Secret World of Oil. (London: Verso Books, 2014) I really enjoyed this book, as I read and reviewed it (here) prior to a speaking engagement at an Oil and Gas Conference in Houston. As Mr. Silverstein shares in his introduction, a “constant in the energy business is corruption,” adding that “two central figures in this secret world are fixers and traders.” As with Mr. Feinstein’s book, The Secret World of Oil proves to be a valuable window into the front-lines, and as Mr. Silverstein well states “the lines of US anticorruption laws are drawn very strictly, but oil company executives are sent overseas to make deals, and they are measured by performance.” Indeed, and that reflection goes back to my front-line dilemma where field personnel ponder “what does management really want, compliance or sales, as I can’t deliver both.” As a Chevron executive shared with Mr. Silverstein “You’re supposed to be clean, but you’re also supposed to create business. That leads to a tension.” Amazon site here.
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A few papers worth a shout out as well.
Appleton, Robert, M. “The Incidents of Foreign Bribery Remain Largely The Same. A circumstance unlikely to change.” (White-Collar Crime Committee Newsletter Winter Edition, March 2. 2015). Link here to the entire work. As to Mr. Appleton, I had the pleasure of recently meeting him, but this was not the first time we crossed paths. In 2006, he was the Chairman of the United Nations Procurement Task Force – an ad hoc investigation unit, created within the UN by the General Assembly to root out fraud and corruption in the UN, all of its peacekeeping missions around the world and its overseas offices. The PTF was part of OIOS, the Office of Internal Oversight Services – and Mr. Appleton reported directly to the Under Secretary General for OIOS, Ms. Inga Britt Ahlenius. The PTF operated between 2006 and the end of 2008 –when its funding expired. It was during this time period that Mr. Appleton targeted me as the subject of an internal UN fraud investigation, which ultimately led to my dismissal from my former employer to be followed by my Justice Department proffer and years of cooperation.
When I read his interview with Sam Rubenfeld in the Wall Street Journal (link here), I dowloaded his paper which was referenced, relating to the OECD Bribery Report. Mr. Appleton brings a unique view to the field of anti-corruption which is quite unprecedented. In addition to Mr. Appleton’s UN experience (including Special Counsel and then Chief Investigations Counsel to Paul Volcker, Mark Pieth and Richard Goldstone as part of the UN Iraqi Oil for Food Programme Scandal), he was a Supervisory Assistant United States Attorney for thirteen years, Director of Investigations & Senior Legal Counsel for The Global Fund to Fight AIDS, Tuberculosis & Malaria for over four years, and now Partner at Day Pitney LLP.
As to the OECD Bribery Report, Mr. Appleton raises a serious issue with respect to the methodology in that the results and conclusions are only the collective summation of 427 reported enforcement actions. In other words, it leaves us with the issue of “we don’t know what we don’t know.” Indeed, as Mr. Appleton states, reflecting on his own experience, the conclusions of the OECD Report “under-report the state of corruption in developing economies, and under emphasize the extensive presence of corruption in public contracting worldwide.” As Mr. Appleton argues from his own experience with over 600 forensic investigations “public bribery remains ubiquitous, and remains largely unaddressed.” He goes onto list a number of categories as to why the OECD Report might not be an accurate reflection of bribery activity “because no prosecution was pursued and no “case” was successfully made.” The reasons as to why bribery remains “unaddressed” are compelling as he describes how what we might think of a “culture of corruption” in the developing world is nothing less than “customary practice. The reason which gave me reason for pause was Mr. Appleton’s experience of how, when an “investigation reaches closer to the party in power, or in the higher ranks of a government, the less likely it is to be pursued by the host government.”
Miles, Roger. Dr Roger Miles is a Behavioural Risk Lead for Thomson Reuters and recently published “Tracing the True Origins of Bad Behavior: New Ways to Predict Conduct Risk Exposure.” (Thomson Reuters, April 2015) When I am not waiving Professor Gino’s Sidetracked I am quoting Dr. Miles who has provided me with a plethora of “go-to” lines. My favorite is “the most powerful predictor for bad behavior turns out to be when people won’t talk about bad behavior.” From there I turn to Dr. Miles’ WAH as to “what actually happens.” While the field of anti-bribery compliance presents no shortage of the “formal organization” and the essential structures of compliance, it does not address that WAH which reflects on Dr. Miles’ statement that “we can either cling to the comforting, but wholly misguided, view that published rules and codes are effective ways to curb human bad behavior, or we can work with real human behavior to develop new forms of risk control that don’t rely on systems and false proxy measures of performance.” His description of local influencers, what he calls “a person’s immediate work group,” which “defy all interventions from corporate control structures,” is a must read for those who want a true understanding of how well trained, educated and compensated employees can easily “go local” at the front-lines of international business.
Interested? I hope so, and feel free to e-mail me at firstname.lastname@example.org for the entire paper.
Finally, the Harvard Business Review, April 2015, has a series of articles under the Heading of Inspire Your Sales Force. Perhaps more than any other work on the impact of incentives upon behaviors, these three articles have tremendous relevancy, and will certainly be the subject of future blogs. The first, How to Really Motivate Salespeople by Doug Chung states that “studies of personality type show that salespeople typically have a larger appetite for risk than other worker,” and it talks about how that intersects with quotas, forecasts and the risk of the sales cycle. While I list these articles in order of appearance, Mr. Chung’s is probably the most significant piece of the three in the context of anti-bribery compliance.
Who’s Your Most Valuable Salesperson by V. Kumar, Sarang Sunder and Robert R. Leone addresses forecasting and performance. As the Authors share, salespeople “respond quickly and enthusiastically to monetary rewards and recognition.” The final of the three is The Right Way to Use Compensation by Mark Roberge, which addresses strategy. As Mr. Roberge well states, compensation “is the most powerful tool you have” when it comes to shaping and motivating behaviors. In his conclusion, Mr. Roberge states “the sales compensation plan should reflect the type of business you’re in and the stage of business you’re at,” to which I would add “and calibrated to the risk of the region in which you operate.”
I do have a limited number of pdfs for these three articles which I can share, so if interested in the full version please e-mail me at email@example.com If you are an HBR hard copy or digital subscriber, a search on any of these titles will bring you to the link.
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#RobertAppleton #RichardBistrong #SarahChayes #KenSilverstein #AndrewFeinstein