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Feature The last wordby Joe Murphy, CCEPSure, it’s ethical, but is it legal?Compliance & Ethics Professional March/April 2012MurphyHow many times have you heard “Itmay be legal, but is it ethical?” or thestatement, “We’ve moved beyondethics to compliance.” But our field is complianceand ethics. Why not just ethics?Ethics purports to be about values, andto be above merely obeying the law. Soundsgood, until you look at history and experiencea bit closer. The problem with“values” is that there are quite afew values, and they often conflict.Loyalty is certainly a popular value,but is loyalty to family always good?If you are making a hiring decision,would your values tell you to rewardyour family out of loyalty and hireyour brother for that open position in the company?Loyalty to country is good, but if yourcountry is a fascist dictatorship, is loyalty theright value? We make choices among valuesall the time.What is law? Law is society’s assessment ofthe order of values, based on the community’sexperience. So, if your loyalty and honor tellyou to do something (e.g., an act of revenge),but the law says otherwise, this sets the priorityfor your values.Here is an example: Your long-term friendworks for a competitor. The competitor is a disadvantagedbusiness struggling to survive. Itis also devoted to saving the environment. Youknow there is plenty of business available foryour company to survive, but you and this onecompetitor have been shortlisted as the twobidders for a contract. So, out of loyalty, friendship,concern for disadvantaged businesses,and respect for the environment, you callthe competitor and agree to let him win. Youhave certainly been very ethical, with valuesprevailing over profit, but you have committeda crime. Why? Because society, in weighingcompeting values, has decided that competitionbrings the best value to all of society.“The problem with ‘values’ isthat there are quite a few values,and they often conflict. Loyalty iscertainly a popular value, but isloyalty to family always good? Ifyou are making a hiring decision,would your values tell you toreward your family out of loyaltyand hire your brother for thatopen position in the company?”Another example: People are suffering in aparticular dictatorship. In an exercise of compassionand courage, you go there to see foryourself and to see if you can help people. Ofcourse, you need to spend money there to survive.You are certainly following values andbeing ethical, but you have committed a criminalviolation of a U.S. boycott law. Society hasdecided that limiting this dictatorship is apriority value. Yes, you have been true to yoursense of values, but you broke the law.So before we proclaim the battle to preventcriminal conduct “done,” and decide it istime to “move on to ethics,” remember that inaddressing compliance with laws, you havenever left the issue of values. ✵Joe Murphy is Of Counsel to Compliance Systems Legal Group andEditor-in-Chief of Compliance & Ethics Professional Magazine. He may becontacted at jemurphy@voicenet.com.68 www.corporatecompliance.org +1 952 933 4977 or 888 277 4977
sTakeawaysMarch/April 2012Compliance & EthicsProfessionalTear out this page and keep for reference, or share with a colleague. Visit www.corporatecompliance.org for more information.Recipe for a Compliance Dayin 2012Cynthia Scavelli (page 22)»»Reach out to SCCE and other complianceprofessionals for valuable ideas.»»Events should reflect your company’sculture and stay on budget.»»Contact different company departments fortheir expertise and suggestions.»»Initiate a Planning Committee early.Things always take longer than you think!»»Plan a simple event for your first year.You can always add more later.»»Engage your employees with fun contestsand creative prizes.GRC focus: Keep youremployees close and yourauditors closerSteve McGraw (page 28)»»With regulatory attention continuing tofocus on GRC results, corporations need tofocus on ensuring compliance is up to par.»»Corporations need to show employeesthat all internally reported issues will betaken seriously.»»Sharing compliance self-assessments andmitigation programs with auditors can helpcorporations establish a strong reputation.»»GRC should be viewed as increasinglybeneficial, especially when preparing formergers and acquisitions.»»GRC systems can provide information toshow trend lines and correlations to addressroot-cause issues before regulators ask.Compliance in a casino worldMichele Abely (page 32)»»Operate in a good faith manner and inthe best interest of the company andits customers.»»Do the research to find the best answersand solutions.»»Document all decisions in a memoincluding the research done, the findings,and the outcome.»»Ensure all related procedures are writtenand/or updated regarding any decisions.»»Communicate decisions clearly and ensurethat outcomes are executed consistently.DOJ review: FBI’s Integrity andCompliance ProgramEmil Moschella (page 36)»»The FBI implemented a corporate-stylecompliance program to allow for the earlydetection of internal control weaknesses.»»The DOJ OIG reported that the FBI’sprogram has been beneficial to its effortsto monitor and enhance compliance.»»The DOJ OIG suggested that other agenciesmay wish to consider implementing asimilar kind of program.»»Remedial legislation, policies,and processes are inadequate.»»An integrated compliance and ethicsprogram in government agencies isimportant.Powerful witness preparation:The most important personDan Small and Robert F. Roach (page 40)»»The most important person in theroom is the one who says nothing:the court reporter.»»Consider your words carefully—thereporter’s machine is cold, mechanical,and humorless.»»Words have different meanings:think about manager.»»Avoid using jargon that jurors may notunderstand or find confusing.»»If you are not sure what counsel is asking,ask for clarification rather than answeringthe question.Nuts & bolts for boards: Whatethics oversight really meansFrank J. Navran (page 44)»»Total independence is an unattainable goal.The best we can hope for is to continuallyget closer to that goal.»»Perhaps the best we can ask of boardsis a “good faith effort” toward being asindependent as possible.»»The level of independence on the boardinforms the culture of the organization,and vice versa.»»Independence is more attainable whenthe board aims for a operating culture thatvalues ethics over compliance.»»You get what you measure, and assessingthe effectiveness of the organizationalculture requires that one ask differentquestions and apply different standardsthan when assessing organizationalcompliance.Multinationals and duediligence: What are thered flags?Charles Thomas (page 55)»»Failure to comply with regulations like FCPAcan cost companies millions.»»Due diligence processes help companiesavoid risk and make informed decisions.»»Due diligence is about building trust andstrong relationships.»»As companies implement due diligenceprocesses, they will encounter “red flags.”»»It’s important to examine red flagscarefully—they may be false positives.Computers and copyrights:A continuing source ofavoidable liabilityThomas W. Kirby (page 59)»»When employees share copyrightedmaterials, employers can take a huge hit—sometimes millions of dollars for somethingas simple as passing around an electronicnewsletter to a few colleagues.»»Not all copyright cases settle.»»Under the “statutory damages” provisionof the Copyright Act, a court is not limitedby actual damages, but may award up to$150,000 in statutory damages for eachwork the defendant has willfully infringed.»»Courts are not shy about using the power ofimposing statutory damages.»»Relatively simple best practices can greatlydiminish your exposure.Is your ethics and compliancetraining really preparing youremployees?Charles Ruthford (page 63)»»Our current web-based ethics and compliancetraining may leave us unprepared for peoplehaving to deal with risks.»»We cannot assume that people under stresswill first consider a rational, step-by-stepprocess to deal with a risk.»»When facing a difficult situation that haspersonal consequences, the human mindbases its choices on intuition and emotionrather than rational reasoning.»»Interactive, collaborative, transformative,management-led learning activities caninfluence values, intuition, behaviors,decision-making, and ultimately bottomlineperformance.»»Leadership and involvement by front-linemanagers is crucial to the success oftraining and change activities.Compliance & Ethics Professional March/April 2012+1 952 933 4977 or 888 277 4977 | www.corporatecompliance.org 69
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