Darth Vader Week: Part 2 - Compliance Lessons

Thomas Fox
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Thomas Fox - Compliance Evangelist

As most of you all know, I can get carried away with a blog post and turn one post into a five-part series. I feel one coming on as I was so fired up in writing yesterday’s blog that I decided to dedicate this week’s blog to Darth Vader. Of course, that meant I had to rewatch the original three Star Wars movies plus Rogue One but it was a sacrifice I was willing to make.

As with my first post, I will continue with some signature Darth Vader lines which inform today’s topic of compliance lessons from Darth Vader.

  1. The Emperor Is Not As Forgiving As I Am.” According to Screenrant, if Darth Vader calls to put you back on schedule, you know there is a problem! That was the situation when Commander Jerjerrod and his construction crew started falling behind on the construction of the second Death Star. The Emperor sent Lord Vader to “pick up the pace in preparation for the Empire’s trap to catch and destroy the Rebellion. Rather than rely on Force chokes, Vader instead tried a different tactic by telling Jerjerrod that the Emperor was soon to arrive. It was enough to scare the pants off the Commander, especially when Vader hinted that the Emperor was a far, far worse Boss to disappoint.” From Star Wars Episode VI: Return of the Jedi.

Compliance Lesson – Incentives. The Department of Justice (DOJ) seems to have recognized this when, in the 2020 Update to the Evaluation of Corporate Compliance Programs (2020 Update), it stated: Incentive System – Has the company considered the implications of its incentives and rewards on compliance? How does the company incentivize compliance and ethical behavior? Have there been specific examples of actions taken (e.g., promotions or awards denied) as a result of compliance and ethics considerations? Who determines the compensation, including bonuses, as well as discipline and promotion of compliance personnel?

When considering how a company could use incentives to further a compliance program, consider how incentives might lead to the converse, as they did in the now-infamous Wells Fargo fraudulent-accounts scandal. When you misalign these two concepts with a faulty sales strategy it can lead to a catastrophic failure, literally costing the company millions of dollars in fines, loss of business and depreciation of shareholder value.

  1. There Is No Escape! Don’t Make Me Destroy You”. Poor Luke Skywalker, with brash foolish bravery, he thought he could take down Darth Vader in a lightsaber duel, despite not being able to balance two rocks on top of one another. What could go wrong? “After thrashing Luke within the bowels of Cloud City, Vader ended the duel by slicing Luke’s hand off at the wrist and robbing him of Anakin Skywalker’s lightsaber. With nowhere to run, Vader drove home Luke’s unfortunate plight, warning him not to continue.” From Star Wars V: The Empire Strikes Back.

Compliance Lesson – The inter-relationships between each Hallmark of an Effective Compliance Program. It is critical for a Chief Compliance Officer (CCO) to understand how compliance must move forward in the coming years. Consider how you can use your Code of Conduct development to help your risk assessment and how your risk assessment can then inform your Code of Conduct and, equally importantly, you are training on it; you can begin to move towards continuous monitoring and continuous improvement in your overall compliance program. By understanding this inter-related nature, you can garner a much better strategic picture of your risk.

  1. You Are Unwise To Lower Your Defenses!” As the Rebellion battled desperately against the fierce onslaught of an Imperial trap with their X-Wing fighters in space, Luke and Vader battled it out in the Emperor’s chambers for the fate of the Force itself. After demonstrating vastly improved skills in comparison to their initial encounter, Luke was able to gain an advantage long enough to start chipping away at Vader’s psyche. Sheathing his lightsaber, he took the passive road, but Vader would have none of it! From Star Wars Episode VI: Return of the Jedi.

Compliance Lesson – When was the last time you looked at your internal controls? As the DOJ asked in its 2020 Update, “whether the corporation has made significant investments in, and improvements to, its corporate compliance program and internal controls systems” and “whether remedial improvements to the compliance program and internal controls have been tested to demonstrate that they would prevent or detect similar misconduct in the future.” Moreover, when and how does management have the right to over-ride these controls without appropriate oversight?

  1. If You Only Knew The Power Of The Dark Side!” Luke believed he found the proper conduit to tap into and turn his father away from evil. He offered Vader a simple path – to come with him, leave the Empire behind, and turn back from his ways. Yet the Dark Side still controlled Vader. “To Luke, it seemed easy enough, but Vader stressed just how powerful the Dark Side of the Force really was, and how all-consuming it could be. Unable to break devotion to Darth Sidious, Vader ignored Luke’s passionate pleas and prepared him to meet the Sith Master, face to face.” From Star Wars Episode V: The Empire Strikes Back.

Compliance Lesson – When you think about the Dark Side, always remember the Fraud Triangle and the Fraud Pentagon. The three sides to the Fraud Triangle are pressure, rationalization and opportunity. Jonathan Marks added the following two prongs:  “(Perceived) Competence and Arrogance”, which he notes are human elements. Thus, the Fraud Pentagon was officially born. He went on to explain the intersection “where an employee’s competence or power to perform and arrogance or lack of conscience are factored into the conditions generally present when fraud occurs.” As a Compliance Professional, you need to be aware of all these conditions, particularly involving control personnel, for example those with access to a Vendor Master list or payment authority.

  1. When I left you, I was but the learner. Now I am the master.” This is the first time we see Darth Vader falter. Yes, he is confident, but there is a hint of fear in his tone. After all, the last time he saw Obi-Wan, he lost terribly in a lightsaber duel. This scene is tense for a whole host of reasons, but before the fight begins, Vader insists that he will not be bested again by his old master. While it “might seem obvious that this terrifying Sith Lord in full gear would easily defeat an old man in simple robes. However, Obi-Wan is able to become a force ghost, something a Sith Lord would never be able to do. And so, even though Darth Vader might be a master of the force, this quote could indicate that Vader is still unsure of himself.” From Star Wars Episode VI: Return of the Jedi.

Compliance Lesson – Training and Communications. How did Vader come full circle? Here you can think about how you communicate about compliance. As Kim Yapchai, Chief Counsel, Tenneco Inc., has said, “you want to take the grown out of compliance [training]”. Moreover, as the DOJ has noted in its 2020 Update, “Some companies, for instance, give employees practical advice or case studies to address real-life scenarios, and/or guidance on how to obtain ethics advice on a case-by-case basis as needs arise. Other companies have invested in shorter, more targeted training sessions to enable employees to timely identify and raise issues to appropriate compliance, internal audit, or other risk management functions.” You should consider this type of training and compliance communications.

Have some fun and learn some leadership lessons by checking out these clips on YouTube:

The Emperor is not as forgiving as I am

There Is No Escape! Don’t Make Me Destroy You

You Are Unwise To Lower Your Defenses!

If You Only Knew The Power Of The Dark Side

When I left you, I was but the learner. Now I am the master 

Join me tomorrow when I consider how Darth Vader can assist your Board of Director and senior management presentations.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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