March/April 2009 www.FAOToday.com

CEO’s Corner
Embracing
Responsible
Common Sense
This is more in the nature of a blog than a column. I am writing
it at the CRO Summit in Washington, DC, on April 23, 2009,
while listening to a panel of BPO providers discussing the management
of compliance in the era of corporate responsibility.
The CRO Summit series (www.thecro.com) is part of an offering by CRO Magazine and the
CRO Association. The acronym stands for “Chief Responsibility Officer.” The mission of this
group is the professionalization of an area that subsumes corporate responsibility, sustainability, and
governance risk and compliance.
David Good, chief representative of Tata Sons (parent company of Tata Consultancy Services) in
North America; Charles Bartels, director of Global Social Responsibilty & Knowledge Sharing at
Manpower; and Suranjan Pramanik, head of Client Services, Manufacturing at Infosys BPO are discussing
the various ways their companies have addressed the rigors of BPO compliance management
in the new world order. Glenn Davidson, managing director of EquaTerra’s public sector advisory
services in the Americas, is moderating the panel, going right at issues like the Satyam scandal and
the need to meet the responsibility requirements of the provider agenda and the client agenda.
It occurs to me as I listen that the world has changed a great deal. We need to live in the era of
common sense as providers. Where does the role of provider end and whistle blower begin? What is
technically compliant and morally sound?
Responsibility in the financial profession is hemmed in on all sides by AICPA rules, FASB guidelines,
SEC guidelines, and local and national laws. It would seem in the current financial crisis,
however, that the phrase, “plausible deniability” gets too much use. “We did not know,” or “We did
not realize” or “What we did was not technically against the rules, so we were in compliance,” are
common refrains.
For financial executives, where does common sense in managing a business come into focus?
When you lend the same $10 to 40 people, that is more than “leverage.” It is like a weird rewrite of
the Mel Brooks play, “The Producers,” where the characters have a 400 percent equity interest in
the same Broadway show. Let’s not forget that show ends with Max Bialystock in jail.
The role of financial executives is not only measurement and recordkeeping. It is also managing
and discerning dishonesty in the business. The coming storm of “re-regulation” as some are calling
it is the result of the bad acts of a few leading to the punishment of the many. Common sense is a
cornerstone of responsibility. Most of the time, when people are doing something wrong, they know
it but rationalize it away, or decide to do it anyway.
Should the FAO provider be made an accomplice if they manage compliance, or be culpable if
they do not inform the proper authorities? In the case of law breaking, the answer is simple. Yes. If a
provider sees law breaking, they need to inform the company’s chief compliance officer or the chair
of the audit committee. In the case of behavior that is irresponsible but not so clearly illegal, they
need to discuss with the chief financial officer the behaviors that concern them.
Merely keeping the books is no longer enough and is not in the best interest of the shareholders
who are paying that provider’s fees. As for financial professionals, we live in a new era of responsibility,
and all of your internal departments and external resources now have to ask not only what is
compliant but what is sensible, what is responsible, what is sustainable, and what is in the best
long-term interest of our shareholders, employees, and customers.
Elliot H. Clark, CEO
4 FAO Today March/April 2009
CEO: Elliot Clark
eclark@crossingmedia.com
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