What is the first thing that you think of about Former First Lady Nancy Reagan? Right up there for me is three things actually Just Say No, which was her campaign against not only drug abuse but also premarital sex in the 1980s. Chief Compliance Officers (CCOs) fear being known as ‘Dr. No’ and compliance practitioners generally fear inhabiting the ‘Land of No’.

However sometimes as a compliance professional you are called upon to do just that, channel your inner Nancy Reagan and Just Say No. Occasionally you must say ‘No’ to conduct which might violate your company’s Code of Conduct or get your business in hot water for a violation of the Foreign Corrupt Practices Act (FCPA), UK Bribery Act or other anti-corruption compliance law. Sometimes, as Chuck Duross once intoned, you may have to be ‘The Alamo’ (not the slaughtered part, the line in the sand part). But sometimes you may want to say ‘No’ for yet another reason altogether; that being by saying ‘No’ you may actually be opening yourself up to other solutions.

I thought about this concept when I read an article in the Financial Times (FT) Undercover economist column, entitled “The power of saying ‘no’”, by Tim Harford. Hartford who looked at saying ‘No’ from an economist’s perspective referred to it as “hyperbolic discounting” which he, in part, defined as follows, “Adopt a rule that no new task can be deferred: if accepted, it must be the new priority. Last come, first served. The immediate consequence is that no project may be taken on unless it’s worth dropping everything to work on it. This is, of course, absurd. Yet there is a bit of mad genius in it, if I do say so myself. Anyone who sticks to the “last come, first served” rule will find their task list bracingly brief and focused.”

But there is another economic principle at play with the use of the word ‘No’. Harford said, “It’s the idea that everything has an opportunity cost. The opportunity cost of anything is whatever you had to give up to get it. Opportunity cost is one of those concepts in economics that seem simple but confuse everyone, including trained economists.” Moreover by saying ‘yes’ to one thing, we are by definition saying ‘No’ to something else. Harford believes that is something that should be considered if you do not say ‘No’.

This concept is what Jan Farley, the CCO at Dresser-Rand, talks about when he say that you do not want to spread your compliance program too thin. Farley has said that you cannot stretch your compliance program so thin that you try and cover everything so that you miss the larger FCPA or UK Bribery Act risks that your company faces. For the CCO or compliance practitioner, this requires you to assess your risks and then work to remediate those risks going forward. But you cannot deliver the necessary resources to a risk unless it is properly evaluated. With such a protocol in place, you will then be in a position to not only say ‘No’ but to be able to articulate your reasons for doing so if a regulator comes knocking.

So if your company’s sales model is to use third parties, that is probably your highest risk, then prioritize your time and compliance budget on managing that risk, initially before you move on to other compliance risks. Conversely, if your sales model is to use employees, then put your time and effort into managing that risk, through training and monitoring employees regarding their interactions with foreign officials. Do not spend your time, budget and energy on managing the risk of low to no-risk parties and issues. There is no substitute for carefully thinking through your company’s risk profile.

Just say no also relates to some ideas put forward in a recent New York Times (NYT) Corner Office column by Adam Bryant. In an article, entitled “The Upside of Being Replaceable”, Bryant interviewed Kristin Muhlner, the Chief Executive Officer (CEO) of NewBrand Analytics, a provider of social media monitoring. One of Muhlner’s early lessons in the corporate world was that everyone’s replaceable. She said this was because large companies are run like armies where everyone is replaceable. However Muhlner found not only an upside to this concept but also comfort in it. She said, “The wonderful thing is that you cultivate this sense that you are not the center of the universe. If you leave, someone will replace you, the circle will close and it just doesn’t matter. That lesson has been helpful because it is really easy, as you move up in your career, to think that you’ve got to be involved in everything.” In other words, you do not have to know everything and by extension, you do not have to do everything. You can just say no sometimes.

Another key lesson that Muhlner has learned is patience. This can be with a person or a situation where you may need to “let things play out a bit. People often come to you and say “We’ve got to fix this now.” And it’s very rare that you have to act immediately. You have to have the patience to say, “I’m going to evaluate the situation and the individuals involved, and I might choose to act on this, and I might not choose to act on this right now.””

Muhlner’s thoughts on how to advance culture were also insightful. She said that she has found employees want to feel connected. She said, “people just have this incredible thirst to be connected, and they need multiple reinforcing points of communication. I have to remind myself over and over not to assume that everyone knows something. I’ve started sending out an email once a week called “Where’s Waldo?” The email is just to say where people are, like that our V.P. of sales is meeting with this company. It’s amazing the reaction that it gets from people, because they feel like, wow, cool stuff’s happening, and now I know why he’s not responding to my email today. It helps.” For the compliance practitioner, this clearly shows the power of creating and distributing short messages about compliance.

Harford’s article and Muhlner’s interview drove home a message that compliance practitioners may not usually embrace. Saying ‘No’ can sometimes be the right call when it comes to delivering your compliance resources to your compliance issues. While saying no to high-risk business ventures may be a harder sell to CEO types, it may well be that Nancy Reagan’s admonition to Just Say No can be more effective to deliver a better and more efficient compliance service to those who may need it the most.