Saturday, November 11 was National Remembrance Day for Veterans who served their country and across the world. In the US we call it Veteran’s Day. In the UK, it is called Remembrance Day. Whatever it is called, where you are, it is designed so that we may never forget the sacrifices that the men and women made so that we can live in a free society. I was in London last week and the number of persons wearing and selling red poppies boutonnieres was inspiring. At my father’s funeral, by far the most moving part for me was when the Navy buglers played Taps, then folded the American flag draped over his coffin and presented it to my mother, ending with the solemn words “From a grateful nation.” Although our Veteran’s Day was Saturday, I hope you might spend a few moments today reflecting on those who made the ultimate sacrifice to allow us all to go forward into the 21st Century.
I want to especially honor the men and women who served our country in World War II both those who made the ultimate sacrifice, those WHO have died since and those still with us on this Veterans Day. I certainly view them as “the greatest generation” for a whole host of reasons, not in the least their collective fight against the forces of evil in the world. Name any right you hold sacred as an American and the men and women of that era fought to defend it. Right to vote, freedom of expression, freedom of religion, are but a few. However, there are many other rights that you might not think of that we owe to these men and women who fought and sacrificed for us during this conflict.
My father served in that conflict and the Korean War as well. For over 40 years he was a labor arbitrator. He believed that working men and women should have due process regarding their jobs and as an arbitrator he has put that belief into practice by requiring companies who terminate employees to follow the due process requirements of termination for just cause. Put another way, if an employer is going to deliver a death penalty sanction in the workplace, in the form of job termination, it must do so fairly and justly. This does not prevent management from exercising its rights or prevent management from running its business. At a bare minimum, it means that a company must have an agreed upon disciplinary process in place and that process must be followed if the company is going to terminate an employee. A company must investigate and it must allow an employee to tell his or her side of the story, the employee must have the right for union or other representation in the process and the final appeal of any termination must be made by someone other than the original decision maker. It is procedural fairness. It is one of the rights which the greatest generation defended in that conflict.
Procedural fairness is one of the things that will bring credibility to your compliance program. Today it is called the Fair Process Doctrine and this Doctrine generally recognizes that there are fair procedures, not arbitrary ones, in a process involving rights. Considerable research has shown that people are more willing to accept negative, unfavorable, and non-preferred outcomes when they are arrived at by processes and procedures that are perceived as fair. Adhering to the Fair Process Doctrine in two areas of your compliance program is critical for you, as a compliance specialist or for your compliance function, to have credibility with the rest of the workforce.
The first area is that of internal company investigations. If your employees do not believe that the investigation is fair and impartial, then it is not fair and impartial. Further, those involved must have confidence that any internal investigation is treated seriously and objectively. I have written about several aspects of internal investigations, to emphasize how to handle internal whistleblower complaints in light of the Dodd-Frank implications. One of the key reasons that employees will go outside of a company’s internal hotline process is because they do not believe that the process will be fair.
This fairness has several components. One would be the use of outside counsel, rather than in-house counsel to handle the investigation. Moreover, if company uses a regular firm, it may be that other outside counsel should be brought in, particularly if regular outside counsel has created or implemented key components which are being investigated. Further, if the company’s regular outside counsel has a large amount of business with the company, then that law firm may have a very vested interest in maintaining the status quo. Lastly, the investigation may require a level of specialization which in-house or regular outside counsel does not possess.
However, as important as the Fair Process Doctrine is with internal investigations, I have come to believe it is more important in another area. That area is in the administration of discipline after any compliance related incident. Discipline must not only be administered fairly but it must be administered uniformly across the company for the violation of any compliance policy. Simply put if you are going to fire employees in South America for lying on their expense reports, you must fire them in North America for the same offense. It cannot matter that the North American employee is a friend of yours or worse yet a ‘high producer’. Failure to administer discipline uniformly will destroy any vestige of credibility that you may have developed.
In addition to the area of discipline which may be administered after the completion of any compliance investigation, you must also place compliance firmly as a part of ongoing employee evaluations and promotions. If your company is seen to advance and only reward employees who achieve their numbers by whatever means necessary, other employees will certainly take note and it will be understood what management evaluates, and rewards, employees upon. I have often heard the (anecdotal) tale about some Far East Region Manager which goes along the following lines “If I violate the Code of Conduct I may or may not get caught. If I get caught I may or may not be disciplined. If I miss my numbers for two quarters, I will be fired”. If this is what other employees believe about how they are evaluated and the basis for promotion, you have lost the compliance battle.
This year, when considering Veteran’s Day, I honor the memory and service my father and all the other ever-dwindling number of World War II veterans for their part in making this country the greatest country in the world. I would ask each of you to honor our veterans in your own way, even if it is just a moment to reflect on those who made the ultimate sacrifice in giving their lives or those who raised their right hands and swore to protect the rest of us.
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