Little Help From My Friends – Predictions For Ethics And Compliance In 2014

by Michael Volkov

friendsWhen it comes to predicting ethics and compliance trends and events for the new year, I admit I needed some help.  So I reached out to two leading ethics and compliance specialists in the industry – Donna Boehme (here) and Michael Scher (here), both of whom are well known and well regarded for their acumen and expertise in the ethics and compliance field.

Working together, we came up with a list of significant ethics and compliance trends.  Predicting FCPA enforcement is a lot easier that projecting what ethics and compliance issues will become significant during 2014.  Some compliance trends are reactive – meaning in response to enforcement actions or requirements imposed by the government.  A growing – and some may argue more important – influence is proactive, self-generated ethics and compliance trends.  More business leaders are getting the message – ethics and compliance is not only a defensive requirement but is an offensive tool which contributes to the bottom line – the financial health and success of the company. Based on the recent years’ trends and continuing enforcement and governance reforms, here is our list of significant ethics and compliance trends:friends3

1.  Continuing Separation of CCO and General Counsel – For the last four years, more companies are separating the CCO from the General Counsel, and empowering the CCO to report directly to the Board.  This trend, as a best practice, will continue to increase.  CCOs are demonstrating their commitment to this principle by voting with their feet – CCOs refuse to join companies which do not guarantee them independence and empowerment or leave existing jobs for greener pastures – companies that embrace the independent CCO model.

2.  Increased Board Supervision – Corporate boards are concerned about their own liability for corporate misconduct.  Shareholders are seeking greater accountability and government prosecutors are itching to prosecute a corporate board member or committee for failing to act and supervise corporate conduct.  In response, corporate boards are becoming more proactive, focusing greater attention on their own activities and efficiency, and seeking protection early in situations when a corporation gets in trouble. As part of this trend, more companies are conducting internal ethics and compliance assessments (as directed by the Board and/or senior management), targeting reviews and improvements, and focusing more attention and resources on these issues

friends43.  Focus on Compliance Analytics and Tools – CCOs know that monitoring a compliance program requires the use of appropriate metrics.  Data analysis and tools are necessary to carry out these functions.  CCOs are quickly embracing these tools to leverage their resources and can a better picture of corporate ethics and compliance.  The compliance industry is responding to increase demand for technology.  Vendors are developing new software programs which increase a company’s ability to monitor risks, including third parties, and collect information about third parties, vendors and customers.

4.  Increased Focus on Ethical Leadership – It has taken a while but company leaders are slowly recognizing what everyone has known for a long time – a company dedicated to a culture of ethical leadership will see bottom line financial improvement.  With the economy starting to pick-up, corporate leaders may reduce their obsession with quarterly financial results and embrace a longer-term view of financial profitability which emphasizes long-term growth and sustainability over short-term gains.  With a long term focus, more companies will focus on sustaining an ethical culture as part of a long-term growth strategy, using incentives and clawbacks to emphasize the point.

5.  CCOs as Rising Stars – CCOs will continue to rise in their status as superstars as leadership pays more attention to how these positions are positioned and empowered.  Companies will be less enamored with rock star CFOs or General Counsels, the name of the game has now shifted to CCOs as the hot commodity and lucrative corporate player.  Experienced CCOs with adequate independence. line of sight and seat at the table and resources will continue to demonstrate their capability to assess risk and proactively  respond to these risks in order to protect the company.crystal ball

6.  Whistleblowers – Despite some who want to ignore the growth in whistleblowers, forward-thinking companies and CCOs know that it is only a matter of time until most companies face serious threats from whistleblowers.  It is imperative that companies develop proactive strategies to identify and respond to whistleblower complaints in order to protect the company from serious consequences.  Overseas jurisdictions are starting to recognize the importance of whistleblowers and protecting them from retaliation and offering incentives to provide information to government enforcement agencies.

7.  Compliance Professionals as Monitors – Traditionally, DOJ has appointed former prosecutors or lawyers as monitors for corporations.  DOJ has started to recognize the ability of compliance professionals as corporate monitors – Pat Gnazzo, a leader in the compliance field, was appointed to a four-year monitorship of BP as part of the oil spill settlement with the government.

8.  Local Enforcement of Foreign Nationals – The GSK enforcement action in China demonstrated a growing risk – local government enforcement against foreign companies and foreign nationals.  China’s anti-corruption enforcement push sent a shockwave through the pharmaceutical and medical device industries.  Similarly, Brazil’s recent announcement of prosecutions of Siemens executives highlighted this growing risk.

friends29.  Due Diligence and Monitoring – The name of the game in anti-corruption compliance has boiled down to two significant activities – due diligence of third-party intermediaries and monitoring of the third parties based on risk.  Many companies have adopted policies and procedures for due diligence.  Companies are struggling with fine tuning these due diligence review.  In addition, companies have started to focus on monitoring techniques and the implementation of systematic risk monitoring programs to detect and prevent any potential problems.

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.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.