A Guide to Compliance From the Bard

I saw the performance of King Lear with Glenda Jackson as the mad king. It was a magnificent production and if you have the chance to see, I would certainly urge you to do so. The production had many interesting features and interpretations which seemed to be great entrees into several compliance topics. The play was directed by Sam Gold and it was scored by Phillip Glass but the star power was derived from Jackson as King Lear. It was a fabulous take on the story and one that will resonate directly to our turbulent times. Therefore, inspired by octogenarian Jackson and her performance, I am going to use King Lear as a deep dive into several compliance topics this week. In this episode, I want to discuss how this production changed the focus of the play, away from the madness of the king to the actions of the three daughters.

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I saw the performance of King Lear with Glenda Jackson as the mad king. It was a magnificent production and if you have the chance to see, I would certainly urge you to do so. The production had many interesting features and interpretations which seemed to be great entrees into several compliance topics. The play was directed by Sam Gold and it was scored by Phillip Glass but the star power was derived from Jackson as King Lear. It was a fabulous take on the story and one that will resonate directly to our turbulent times. Therefore, inspired by octogenarian Jackson and her performance, I am going to use King Lear as a deep dive into several compliance topics this week. In this episode, I want to discuss the opening scene where Lear bids his daughters express the breadth and scope of their love for him.

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I recently saw the performance of King Lear with Glenda Jackson as the mad king. It was a magnificent production and if you have the chance to see, I would certainly urge you to do so. The production had many interesting features and interpretations which seemed to be great entrees into several compliance topics. The play was directed by Sam Gold and it was scored by Phillip Glass but the star power was derived from Jackson as King Lear. It was a fabulous take on the story and one that will resonate directly to our turbulent times. Therefore, inspired by octogenarian Jackson and her performance, I am going to use King Lear as a deep dive into several compliance topics this week. In this episode, I want to discuss how Jackson, starring in the role of King Lear, added a new level of complexity, nuance and interpretation to the entire play.

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In this podcast series, I have use the Broadway performance by Glenda Jackson as King Lear to introduce several compliance topics. Today, I want to discuss the role of The Fool. Initially I should note that the actor who played it, Ruth Wilson, also played Cordelia; which in and off itself is rather amazing. The Fool did well to speak truth to power during the play and Wilson was excellent in both roles.

Wilson’s performance as The Fool added a shading of interpretation that certainly works. It also informs today’s review topic which is who was the fool and who was the criminal in one of the most notorious acquisitions in recent memory, the Hewlett-Packard (HP) acquisition of the UK company Autonomy. The matter is now on trial in London, it being the largest UK civil trial in history with HP claiming some $5 billion in damages. The former Autonomy CEO Mike Lynch is in the dock as he will be in the US when his criminal case goes to trial sometime after the conclusion of this civil action.

The trial began last month and the fireworks have already started, with HP claiming Lynch and his former CFO engaged in massive fraud; the trial judge asking HP what accounting standards they used to evaluate HP and Lynch basically saying HP dropped the ball completely in both the acquisition and after closing for a variety of reason. Based upon all of this tomfoolery I thought a review of HP actions was warranted today.

Perhaps the simple truth is that everyone involved in this matter was a Fool.

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What is the most famous line in Shakespeare about lawyers? That is an easy one because lawyer-haters across the world (and lawyer-lovers as well) know it – First thing we do is kill all the lawyers. It comes from Henry IV, Part II. Most lawyers understand that by killing all the lawyers, it will create an atmosphere that would allow for tyranny and anarchy. Unfortunately this clear import is not as widely seen by civilians (i.e. non-lawyers).

While I think the debate about whether the compliance function should be located in a company’s legal department or in a separate compliance function has largely concluded that it should be independent because of the difference in the two discipline’s mandates; many in a corporate compliance function came from the General Counsel’s office or have legal training. The lack of law schools providing training in leadership skills has led to a paucity of such proficiencies in my brethren.

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In this podcast, I use my favorite character in all Shakespeare’s works, to introduce today’s post. He is The Fool from King Lear. Of Shakespeare’s many theatrical innovations, his transformation of The Fool from the Renaissance Court Jester of songs, music, storytelling, medieval satire and physical comedy to commentator is right up there for me. The Fool became closer to the Greek Chorus. Shakespeare brought the Chorus commentary function back. As noted in Wikipedia, “Where the jester often regaled his audience with various skills aimed to amuse, Shakespeare’s fool, consistent with Shakespeare’s revolutionary ideas about theater, became a complex character who could highlight more important issues. Like Shakespeare’s other characters, the fool began to speak outside of the narrow confines of exemplary morality. Shakespeare’s fools address themes of love, psychic turmoil, personal identity, and many other innumerable themes that arise in Shakespeare”.

While Lear’s Fool was actually a font of wisdom and commentary, the same cannot always be said for the corporate fools who put evidence of bribery and corruption in emails, excel spreadsheets and PowerPoint slide deck presentations. In Foreign Corrupt Practices Act (FCPA) training I always remind attendees that if you put your bribery scheme in emails, it will be uncovered. Further, if you put together an excel spreadsheet tying your nefarious acts, such as hiring the family member of a foreign official or state owned enterprise employee to the award of a contract, it will be uncovered. Now I find I must supplement my training to add the following admonition: do not put your fraudulent scheme in a PowerPoint slide deck for presentation to senior management.

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Which play in Shakespeare’s cannon presents the biggest clash of cultures, which leads to the most catastrophic result? I would have to opine Othello, one of the great tragedies in all of Shakespeare. Othello, a Moor and General in the service of the Venetian republic, wins great honors on the fields of battle with the Turks. He also wins the hand of the lovely Desdemona. However, off the battlefields, Othello falls prey to the whiles of Iago, who convinces Othello of the infidelity of his bride. Othello murders his wife and then, realizing his mistake, takes his own life.

There are many culture clashes going on in the play. The military ethos vs. the deceit of civilian life, African tribal culture vs. the isolation of life in Venice, and even the warm bloodedness of a Moor vs. the chilly civilization of 16th century Venice. Yet it all leads to one thing – destruction.

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How does Shakespeare portend social media in the 21st century? I would submit that one only need look at Much Ado About Nothing to see how it should all play out. As with all Shakespeare’s plays there is quite a bit going on but the play centers around the action and dialogue of Benedick and Beatrice who go after each other in a manner which shames modern NBA trash-talkers. Apparently everyone else in the play understands the two are meant for each other so they engage in a very social media style of communication to put the two together. Of course, as this is a comedy, everyone ends up married so Beatrice and Benedick, prompted by their friends’ interference, finally, and publicly, confess their love for each other.

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This podcast opens a five-part podcast series on Shakespeare’s Problem Plays. These are plays where the structure of comedy ends the plays; i.e. everyone gets married at the end of the day. Yet these were really not happy endings. Equally they are not tragedies either. Usually in the middle is some very dark part, which tests the reader, play-goer or listener with some very difficult subjects. 

In “All’s Well That Ends Well” Helena is a low-born ward of a French-Spanish countess. She chases Bertram across Europe, sends another woman into bed with him and then captures his heart by all this aggressive stalking. Yet Helena is largely broken by Bertram’s actions.

I thought about All’s Well That Ends Well when I read a recent article in the Harvard Business Review (HBR) by Roger L. Martin, entitled The High Price of Efficiency. In this article, he posited that the relentless pursuit of business process efficiency can actually make an organization less resilient. As they become less resilient, they are more at risk for a catastrophic failure or a likelihood of a control failure which could lead to something akin to a major ethical violation or even legal violation such as under the Foreign Corrupt Practices Act (FCPA). Most interestingly, for the compliance professional, the author’s prescription is what we would call operationalizing compliance through pushing out the structure to allow greater resilience, largely from a diverse group of stakeholders.

I was also intrigued by Martin’s ideas about moving a company toward resilience. This allows a more adaptable response but also has redundancy which can operate to stop anything which might get through the monoculture of too great efficiencies. The points adapted for compliance are:

1. The first is to limit scale. Here for the compliance professional, I think the clear message is that compliance needs to be in the regions not simply headed from the corporate headquarters on high. Dynamic power out in the regions would prevent this redundancy both in the regions going out and in the corporate headquarters coming back.
2. The second is to introduce friction. This is the situation where a company creates an artifice so clean that if something untoward enters the system, it can wipe it out. You should is to bring in someone from the outside to review your compliance program on a two- or three-year basis, to provide an outside perspective but also put some sand in your shoes at times.
3. The third prescription should be high on every Chief Compliance Officer’s (CCO’s) game plan. It is to “create good jobs.” From the compliance perspective, this was mandated in the Department of Justice’s 2017 FCPA Corporate Enforcement Program, where one of the factors listed around the compliance function of a best practices compliance program was , “The compensation and promotion of the personnel involved in compliance, in view of their role, responsibilities, performance, and other appropriate factors”.
4. CCOs must also work to teach resilience in their organizations. Some may call this simply a “Can-do” spirit but I think the better approach is that as a compliance professional, you are only limited by your imagination.

Just as Shakespeare’s problem plays hold a dark middle to a usually comedic beginning and end, the continued resiliency of the corporate compliance function, even if it is not always as efficient as may be desired, can be a valuable lesson going forward.

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We continue our consideration of Shakespeare’s Problem Plays with today’s offering on Troilus and Cressida as an introduction to problems in compliance. Today, we consider Troilus and Cressida and how the title character was portrayed as a fool but the main action is around the death of other characters.

The title characters of this play are not the main story, which takes place during the Trojan War. Troilus loves Cressida, who are both Trojans. Unfortunately Cressida is exchanged for another Trojan who has been captured by the Greeks. This part of the play concludes with Troilus going into battle in a very frenzied manner. Shakespeare seems to portray him as a hot-headed fool in love, but he does not die.

The main action of the play involves the Trojans, King Priam and his oldest son, Hector. On the Greek side it is Agamemnon and Achilles, with minor appearances by Ajax and Patroclus. It is the story of both Hector and Achilles being lured out to an ultimate battle. Achilles only does so after his lover, Patroclus, is killed by Hector. There is a lot of death in this part of the play, yet most commentators do not see it as the anchor to categorize Troilus and Cressidaas a tragedy. Of course, there are many deaths, including Patroclus and Hector, yet these come in honorable battle. Perhaps the final word should come from Wisam Khalid Abdul Jabbar, who said, in The Subversive Homeric Reality in Shakespeare’s Troilus and Cressida, “Shakespeare sacrifices the tragic form, as it sets the characters in a normative direction, in favour of a tragedy of thought.”

We recently saw the tragedy of the victims of Larry Nassar go to a new level when Michigan State University (MSU) Interim President John Engler said (on the record) to the Editorial Board of the Detroit News, “There are a lot of people who are touched by this, survivors who haven’t been in the spotlight. In some ways they have been able to deal with this better than the ones who’ve been in the spotlight who are still enjoying that moment at times, you know, the awards and recognition. And it’s ending. It’s almost done.”

This is not the first time Engler has played the fool in this horrific tragedy. He has consistently attacked, belittled and demeaned the victims of Nassar’s abuse. Kim Kozlowski, reporting in the Detroit News last summer, “Calls mounted Thursday for interim President John Engler to resign from Michigan State University in the wake of emails in which he suggested that the first gymnast to publicly accuse Larry Nassar of sexual abuse might get a “kickback” from her attorney for “manipulating” other victims.”

Engler has led the destruction of any goodwill MSU might have engendered by its commitment to compensate Nassar victims with a $500 million pool of money. Yet, as Matt Kelly wrote in a Radical Compliance blog post entitled “Another Compliance Lesson from Michigan State, “The crisis at MSU is, foremost, a crisis of mistrust. People tried raising alarm about Nassar for years, MSU leaders didn’t listen, and today everyone is skeptical that the university will start listening now. Considering the smear Engler made against a victim only a few months ago, the skepticism isn’t unfounded.” In “Michigan State Reorgs Compliance Again”, Kelly wrote about the University’s effort to so obscure any compliance function as to make it basically non-functioning. What does that tell you about MSU’s commitment to ethics? Unfortunately everything you need to know.

Perhaps the best way to sum all this is up is as a tragedy.

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