Why We Can’t Stop “Doing” Anti-Bribery

We can argue all we want about what compliance is or is not, or what bribery is or is not.  In truth, in both cases, we know it when we see it.

We can pretend that all we really need to do to avoid “legal landmines” is to have our legal department provide some training to “keep us out of trouble,” as the old saying goes. 

We can harken back to Volkswagen, Walmart, Wells Fargo and Bank of America, and recognize that a compliance failure does not always signify the death knell of a company, especially a large one, and because of that, wonder why we have an anti-bribery program at all.

And we can acknowledge that no matter how good our compliance programs are, some amount of bad activity, and, yes, even bribery, is still likely to occur somewhere in our organization at some time.

What we CAN’T do, is stop “doing” anti-bribery.  Not because the law says that bribery is wrong, which of course it does, and not because the financial penalties for getting caught bribing can be large, which, of course, they can be.  Rather, we can’t stop doing anti-bribery because our true compliance leader, the CEO, cannot operate effectively without it. 

Why Building a Culture of Trust is Essential to Corporate Growth

There is essentially one primary element that underlies all successful compliance programs.  We refer to it in compliance parlance as a “culture of compliance.”  The CEO/CCO knows it as trust. 

CEOs must operate in an environment of trust.  Despite all of the old stories about chainsaw CEOs who come in and clean house with reductions in force and a fear-based command structure (sound familiar?) we know from experience that these regimes do not last.  They don’t last because corporate growth, like economic growth, cannot survive, let alone flourish, in a fearful, constricted environment.   A CEO who wants to keep her company growing and innovating knows that she must stand for something.   She must, at a fundamental level, engender trust in her team so that they have the confidence to do something (anything, really) without worry of being undermined by her or by a culture that takes the cheapest and easiest route to revenue, which most often will include cutting corners and bribing where necessary, as many of our recent corporate bad actors have demonstrated.  Why?  Because even if the company may survive the stock price hit and the inevitable exodus of quality employees in the wake of a bribery scandal, the CEO will not.

As the Company Grows, So Too Must the Compliance Program

Now, it is true that successful compliance programs require more than trust.  Compliance requires resources (people and tools) that cost money.  They require accepted fundamental principles of conduct (otherwise known as “company policies”) that take time and intellectual capacity to do well.  And they require expensive recurring attention to corporate, commercial and personnel trends, so that the company stays on top of what is “right” at every step of the company’s growth.  As the company grows and changes, so too must the compliance culture and the compliance program.  We have seen this over and over as companies embarrass themselves with corruption disclosures and then build out a strong compliance culture, not because they are required to do so by law, but because they see it as fundamental to customers’ trust, which in turn is critical for their return to growth. 

The CEO, the company’s true “chief compliance officer,” must build trust with every stakeholder. A company’s leadership team, employees, managers, competitors, regulators, and opponents must all believe that the CEO understands the company’s values, risks, and commitments when building out company goals and objectives for growth.  If there is no common ground for this environment of fundamental trust, then the CEO cannot rely on coordinated, consistent movement toward those objectives.  Compliance, and especially anti-bribery, should not be considered “adjacent” to corporate planning.  Instead, it should be treated as core to the CEO’s fundamental trust in the workforce, and the workforce’s trust in the CEO.  It is the touchstone of what is “right” within the company.  There is no substitute for that. Compliance, and especially compliance with anti-bribery laws, matter now as much as at any other time because trust matters to the CEO.  Presidents and Congressional caucuses will come and go.  Government may from time to time stop the clock to try to better understand what is going on with anti-bribery laws and the programs intended to help companies comply with them.  But the CEO won’t feel the need to do that.  The CEO knows that when times are tough and decisions require serious gut checks to resolve high level internal disputes, especially at the board level, there simply is no substitute for trust.

Joseph Burke

Professor, Building Compliance Programs