WOW Moments in Compliance (Part 3)

02 March 2020
Knowledge Base

by Geert Vermeulen

Often ethics & compliance officers only end up in the news when things have gone wrong. Many people don’t realise that ethics & compliance officers also prevent numerous crimes and unethical practices, sometimes at the risk of being fired or by risking our health or even our lives. Usually you don’t hear about these cases. Therefore, I decided to share a couple WOW moments in compliance.  The first part of this series of articles was about due diligence in the aviation industry and the second part that was published last week discussed due diligence in the energy industry. The third section will seek to discuss change of strategy. 

There I was, late in the evening with the recently appointed country manager in a sort of country club, having a drink. A few months earlier we had received indications that some things might have gone wrong within this local business unit. We had conducted an investigation and stopped certain practices from the past. We were going to fire a couple people and take disciplinary action against others. Some people saw it coming and already resigned themselves. This would certainly give rise to more questions from clients and suppliers. We had already said farewell to a number of clients.

Change of Strategy

The question arose as to whether this business unit was still viable. Can we do business in this corrupt environment? After another drink, the country manager suggested that we should completely change the strategy of the company. Going forwards, we would try to be the most ethical organisation in this country in our industry. It was probably the only way to put the misery behind us. And maybe it would attract new customers; customers we’d rather do business with than with the old ones.

Over the next couple of days, we made a plan together with the local management team. A lot of resistance had to be overcome; you can’t change a culture in a couple of weeks. Not only would the local compliance department be expanded, I would also become more heavily involved with this entity in the coming months. After all, in the past there had been too little attention for this business unit from the head office, also from my compliance department. In the next couple of months, we used just about every tool in our arsenal to make the necessary changes and regain the trust of our clients, suppliers and employees.

For a while, the situation remained challenging. As we had stopped a number of payments, our employees received threats from former clients. People had come to their homes, waving with knives and shouting that they would kill them if the old situation would not be restored. Judging from the news in the local newspapers, these kinds of threats had to be taken very seriously. No matter how much I like to fight for ethical and compliant business practices, I also think that nobody should get hurt physically in the process. One time, early in my compliance career, I had missed one of these signals, and that still weighs heavily on me.

Another thing I learned is that it often helps to discuss these challenges with a few people. Also in this case. One smart and courageous colleague of mine suggested that we should take away the authority to make payments from the local business unit. In that case, it would not make sense to threaten our local employees anymore, as they no longer had any influence on the payments. If people would still have a problem with payments, he would come over from the head office to listen to them and provide an explanation in a safe and secured location. And that is what we did.

That is, in the end it appeared that my colleague was not available to travel to the country to provide the explanations. And I was the most obvious candidate to fulfil this role. The night before I travelled to the country, I spent a little more time than usual watching my children sleep. We had to tread carefully in this country anyway, but now it was even more important to travel safely, only by car, and only visit hotels, restaurants and offices that used guards, bodyscans and checks against weapons and car bombs. Luckily nobody showed up for the payments conversations, but one time I had to wait a couple hours until some suspicious characters had left the streets.

It was important though to show our local employees that we were in this situation with them together and that we supported them with boots on the ground. A year later, the local country manager and I looked back at these moments while reviewing the business results. Much to our own surprise, we had not only survived the incidents, the client portfolio had been shaken up and both the turnover and the profit of the country organisation had grown. The strategy to become the most ethical company in this country in our industry was paying off already!

When I left the organisation a little later, I received a last message from the country manager. The local business unit had gone through major changes successfully. He was very proud of that and thanked me wholeheartedly for the vital contribution that I had made to making this change. The business leaders don’t often give a compliment like that to the compliance folks; this was a real WOW moment in compliance.

The author, Geert Vermeulen, is a teacher, trainer, consultant and interim ethics & compliance officer. His goal is to help organisations conduct business in an ethical and compliant way. He also writes and speaks on ethics and compliance.

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