I have been taking online classes this year from MasterClass, beginning with writers. There are classes taught by actors, directors, historians and business leaders. I have made it through James Patterson, Malcolm Gladwell, David Baldacci, Doris Kerns Goodwin and Bob Iger. It is a great way to hear from some of the top practitioners of their craft in a very intimate and entertaining format. I highly recommend this streaming service. I am greatly looking forward to learning from this site over the rest of the year. Over this next week, I will write about lessons from these online classes which can inform your compliance program, the Chief Compliance Officer (CCO) and the compliance profession. Today I want to continue with a concept set out by David Baldacci in his class on writing mysteries and thriller. It is viewing things through what he termed the ‘Writers Prism”.

One of the things that is true for literally every CCO, compliance practitioner or compliance professional is that you are only limited by your imagination. It does not matter what your head count is or what your budget is, even in the current and future economic dislocation. But often the question which is posed to me is ‘where I can get some ideas to test or implement?’ Here I would suggest you use Baldacci’s idea of the ‘Writers Prism’. In his MasterClass, Baldacci said that most of his ideas are “observation-based.” This does not mean that he observes these things he writes about but that he can take the most simple or mundane observation from daily life and turn it into a dark, elaborate tale that he can refine into a part of a story.

Baldacci noted, “Observation is critical, so next time you leave the house, don’t be afraid to let your mind wander, link up the seemingly unrelated events, speculate wildly, and take a mysterious turn. Even if it doesn’t come naturally, you can develop the ability to observe the world around you and channel your creativity into describing what you see in unexpected ways.” As a CCO or compliance professional you can use this same strategy but look at things through a ‘Compliance Prism”.

Every Deferred Prosecution Agreement (DPA) and Non-Prosecution Agreement (NPA) issued by the Department of Justice (DOJ) over the past five years have all included an element along the following strictures, “The Company will conduct periodic reviews and testing of its anti-corruption compliance code, policies, and procedures designed to evaluate and improve their effectiveness in preventing and detecting violations of anti-corruption laws and the Company’s anti-corruption code, policies, and procedures, taking into account relevant developments in the field and evolving international and industry standards.”[Emphasis supplied]. This means that the DOJ expects imagination in your compliance program to keep up with evolving international and industry standards. Yet I would submit that if you utilize the ‘Compliance Prism’ approach, you will be able to meet this requirement.

All of this means you should begin with a strategy for your compliance program. The key to success is something that every CCO or compliance practitioner should take to heart; which is that a compliance practitioner must be able to lay out a strategy for compliance that details the efforts to support the overall business strategy. This means creating a compliance program that will create value for customers, i.e., employees, third parties and customers; show how the company will capture that compliance value going forward and, finally, which types of compliance imagination to pursue.

If you have a good strategy, it can promote alignment among diverse groups in a company, help to clarify objectives and priorities and guide your focus on those objectives. It can also be modified as necessary and with sufficient feedback. There are several questions you need to consider in connecting your strategy to the business. Initially, how will it create value for the customers of compliance; i.e., your employees and relevant third parties? Your imagination can make compliance faster, easier, quicker, nimbler and so on. Focus on that creation of value going forward. Next what types of imagination will allow the company to create and capture value, and what resources should each type receive, such as a change in technology and a change in a business process?

Obviously senior management has a key role around imagination in compliance, as it can be driven downward or backward if there is not sufficient management support. This means not only must there be sufficient resources allocated but management must also incentivize the business units to proceed with implementing the imaginations. Another area where senior management is critical is with making trade-offs. A supply-push approach comes when your imagination is focused on something that does not yet exist, for example if you are initially implementing a compliance program. A demand-pull approach works more closely with your existing customer base to determine what they might need and works to implement imagination around those needs.

Finally, consider what every speaker from the DOJ or Securities and Exchange Commission (SEC) says when they talk about the basics of any best practices compliance program. It is that both compliance and strategies must evolve. You must recognize that your compliance program will have to be innovative. Start with a strategy, that has senior management buy-in and support, then move to implement. Finally, use data in a feedback loop to fine tune your imaginations. Imagination in compliance is one of the key differences between those who advocate static compliance standards embodied in a written paper program and those who advocate an operationalized compliance program and it is the latter that creates an active, vibrant and effective compliance program. That is the bottom line for imagination in compliance.

How can you as CCO use this approach? Look at your business processes; have a chat with your Internal Audit, Finance, Internal Controls, Human Resources or IT counterparts. Look at what ERP systems are running and what information is available that you could look at through your ‘Compliance Prism’. Just remember, you are only limited by your imagination.

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