There have been a plethora of new books about the Battle of the Somme. Daniel Todman reviewed several in an article for the Financial Times (FT), entitled “Stories of the Somme”. One of the books reviewed, Breakdown: The Crisis of Shell Shock on the Somme, 1916, by Taylor Downing, focused on the relatively new condition identified as ‘shell shock’ a term which became ‘combat fatigue’ in World War II (WWII) and today is called ‘post traumatic stress disorder’. Downing thoroughly discussed the range of symptoms experienced by the combatants. Yet his innovation was to consider the mental health of the entire British nation as the causalities mounted and mounted with no end or even result in sight.

I thought about Taylor’s insights when considering the collective mental state of Great Britain after the Brexit vote or, as we would say in Texas Breeee-exit. The topic has certainly dominated both the UK and US news since last Friday, although since Monday, the British press is equally talking about the English exit from the European Football Championship, losing to Iceland 2-1. Many have wondered what Brexit might mean for compliance, the Foreign Corrupt Practices Act (FCPA) and enforcement of the UK Bribery Act. I explored some of the these issues with Jonathan Armstrong, from Cordery Law Firm in London, in a podcast earlier this week, you can listen to Episode 262 The Brexit Edition on the FCPA Compliance and Ethics Report.

Regarding enforcement of the UK Bribery Act, Armstrong believes that there is likely to be little change. The UK Bribery Act 2010 is not a part of any body of European Union (EU) legislation and the UK bribery prosecutors are independent of the EU regime. There may be an effect on some investigations, for example into alleged corruption in EU funds, but as the law will remain the same, there should be no change in how it is enforced. My concern would be that the British government would be so low of funds or required to use its resources in other more politically palatable areas that it could lead to underfunding for the Serious Fraud Office (SFO) to conduct investigations and put on trials for companies that do not settle with the government.

Armstrong did opine that there might well be big changes in areas which do impact FCPA enforcement and those are the areas of data privacy and data transfer. Armstrong noted while there has obviously been much debate in Europe about data transfer issues, what happens with the UK after the exit remains to be seen. He believes that much is likely to depend on whether the UK remains in the European Economic Area (EEA) or not. If the UK does, there may well be little practical change. However if the UK leaves the EEA regime, it would likely have to go through some sort of an adequacy assessment under the EU General Data Protection Regulation (GDPR). He indicated that data transfers could be complicated if the UK does not remain in the EEA as there have been allegations of surveillance by UK Government agencies. He concluded that if a working Privacy Shield deal can be done next month the UK would still be a party to that, at least in the short term. He did conclude with the well-known British admonition to ‘Watch this space”.

I was also interested with Andrew Hill’s FT On management article entitled “Five failures of leadership and one hollow Brexit success”. As usual many of Hill concepts translate well over the role of the Chief Compliance Officer (CCO) so I wanted to use this to reflect on leadership issues for the compliance professional. Hill was merciless that over the course of the referendum campaign and the subsequent events since the vote was tallied on Friday that there has been a complete, total and utter failure of British political leadership.

First is the underlying historical failure of British leadership within the EU. Hill wrote, “A dearth of leadership in the EU itself over recent years exacerbated the economic and political mess that repelled many insular UK voters from the European project. A fatal failure to exercise UK leadership in the EU… further primed the electorate to reject the invitation to remain.” For the CCO or compliance practitioner, I think this means you have to actively engage at all levels of your organization going forward. Never forgot that creating corporate allies is an ongoing process.

The second was the failure of strategy. Presciently, Hill notes that having a strategy is not the same as having a goal. Hill quotes UCLA Professor Richard Rumelt for the obvious, “Winging it is not a strategy.” You need to have both a goal and strategy. Based on the continued comments from the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) over the years, you need to have a roadmap for the design, implementation and continual improvement of your compliance program.

Failure number three is the failure of teamwork. The Brexit referendum campaign certainly embodied the age-old adage that politics makes for strange bedfellows. However in this campaign, Hill said, “The formation of opposing groups drawn from across the political spectrum was always going to pose vast challenges.” Moreover, “Scratch teams can do great work. In business the most diverse groups often come up with the best innovations, but such groups are also the hardest to manage.”

The lesson for the CCO is the management of diverse groups within an organization. Obviously the General Counsel’s (GC’s) office should be a natural ally of compliance. Yet the roles of both disciplines within an organization are very different. These differences will need to be managed throughout the existence of any compliance issue. The same is true, perhaps even more so, for other corporate functions.

As a fourth failure, Hill pointed to “disintegration of the opposition Labour party’s fragile unity after the vote has exposed the inability of Jeremy Corbyn, its leader and a reluctant Remainer, to shape the agenda”. Hill recognizes that political leaders can only get out so far in front of their constituents. Yet being a leader means more than simply talking into an echo chamber but also leaders have “a duty to conduct the sound that the chorus makes rather than simply to sing along.”

Here I think the message for the CCO is that you must continually work to shape the message of compliance throughout your organization. This certainly means more than simply coming from the compliance department. You must also get the C-Suite and senior executives to both talk the talk and to walk the walk of compliance.

Finally, is the failure in the post election phase of this disaster, Hill contends that while “Succession is almost always bloodier in politics than in business” this act by British politicians presents a “scene of near-total disarray”. He intones, “Boards often allude to contingency plans in case their chief executive is “run over by a bus”.” For any CCO, you must prepare for such an exigency. More importantly, you must lead this effort for your company.

The implications of Brexit may well be with us for many years. As a CCO you need to not only begin to prepare for some the issues identified by Jonathan Armstrong but also heed the leadership failures identified by Andrew Hill.