Popcorn and Compliance

Welcome to the Day 4 of the five-day podcast series Jay Rosen and I are producing in honor of the latest Star Wars movie The Rise of Skywalker. Each day over this week, Jay and I will review a Star Wars movie and discuss it from the compliance perspective. Today, we consider Episode VII, The Force Awakens and disruption in compliance.

Today we consider Episode VII – The Force Awakens. It was the first one not created by LucasFilms, as George Lucas had sold his company to Disney. It was directed by JJ Abrams and told the story of the Star Wars universe some 30 years after the destruction of the last Death Star. It is this disruptive nature of the Star Wars franchise that I will focus on today as it relates to disruption innovation in compliance.

The film introduced several new characters: Rey, Finn and Poe Dameron, Kylo Ren and the First Order, a successor to the Galactic Empire. The film was largely one giant search for Luke Skywalker who had gone into isolation after his failure to re-establish the Jedi order. In addition to introducing the new characters, we are reunited with Han, Chewbacca and Princess Leia, who is now General Leia Organa. The First Order has developed new weapon, Starkiller, a deliciously worthy successor to the Death Star; the Rebel Alliance majorly disrupts the weapon and the First Order by destroying it, in the film’s climactic battle.

Compliance is a process. Compliance programs should evolve as business risks change. Just as disruptive innovation tends to focus on process, your compliance program should focus on your overall business process to be successful.

Compliance 3.0 is very different from compliance programs of the past decade. Compliance is moving from a solutions shop where all compliance functions are centered in the legal or compliance department to a process function where the front-line business team can use technology and other tools to operationalize compliance. The 2017 Evaluation of Corporate Compliance Programs focused on how well a company operationalizes compliance into the business functions. The authors point to new business models as disruptive and I think this concept translates into how compliance can be burned into the DNA of an organization rather than simply sitting in the corporate office in the US.

Not all disruptive innovations succeed as disruption is only one step in both the creative and growth process. The key concept are the three goals of any compliance program; to prevent, find and fix issues. This is how compliance differs from legal, whose job is to protect the company; from compliance whose mission is to monitor, obtain the data and then use the data as a feedback loop back into the company.

As many compliance practitioners are lawyers, we are naturally reticent to embrace such change, however I think the pronouncements of the DOJ throughout the year have made even clearer the need for continued evolution of anti-corruption compliance going forward. In The Force Awakens, there were numerous disruptions. We saw the death of one of the most beloved characters in the series, Han Solo, the growing awareness by Rey of her powers and the return of Luke Skywalker. It totally disrupted the First Order and destroyed its most lethal weapon.

Join us tomorrow where we consider The Last Jedi and the Board’s role in succession.

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Welcome to the Day 3 of the five-day podcast series Jay Rosen and I are producing in honor of the latest Star Wars movie The Rise of Skywalker Each day over this week, Jay and I will review a Star Wars movie and discuss it from the compliance perspective. Today, we consider Episode VI, Return of the Jedi and effective training.

In this final movie from the original three, the good guys win in the end after overcoming incredible odds. Many fans and critics panned it for including the incredibly cute and furry Ewoks on the moon named Endor as a part of the storyline. Many thought one very tall Wookie was enough cuteness for the series. This movie’s big reveal was that Luke and Princess Leia were twins and that she was now free to unabashedly pursue bad boy Han Solo. While Episode VI was the lowest grossing film of the original three, coming in at only $572MM worldwide, it was still a great ride and visually stunning. George Lucas’ in-house organ, Industrial Light & Magic (ILM), certainly earned their title for their special effects in the movie. The Sarlacc battle sequence was great, the speeder bike chase on the Endor moon was way cool and the space battle between Rebel and Imperial pilots was a great ride.

I have adapted an approach from Joel Smith on his Inhouse Owl website to help determine compliance training effectiveness.

1.What you want to measure. Before you ever train an employee, you should have a goal in mind. What actions do you want employees to take? What risks do you want them to avoid? In compliance, you want them to avoid non-ethical and non-compliant actions that would lead to compliance violations. The goal is to train employees to follow your Code of Conduct and your compliance program policies and procedures so you avoid liability related to actions.

2. What is employee engagement? The next step is to get a sense of whether employees feel that the training you provided is relevant and targeted to their job. If it’s not targeted, employees will likely not be committed to changing risky behavior. You can get data on employee engagement through a quick post-training survey, which will help you isolate and qualify the training benefit.

3. Did employees actually learn anything? A critical part of any employee training is the assessment. If you want to understand the “benefit” of training employees, you must know whether they actually learned anything during training. You can collect this data in a number of ways, but for compliance training, the best way is to measure pre-and post-training understanding over time. Basically, each time you train an employee, measure comprehension both before and after training.

4. Are employees applying your training? You need to conduct a survey to determine employee application and their implementation of the training topics. To do so, you must conduct employee surveys to understand whether they ceased engaging in certain risky behaviors or better yet understand how to conduct themselves in certain risky situations. These surveys can provide a good sense of whether the training has been effective. 

Join us tomorrow where we consider The Force Awakens and disruptive innovation in compliance.

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Welcome to the Day 2 of a five-day podcast series Jay Rosen and I are producing in honor of the latest Star Wars movie The Last Jedi. Each day over this week, Jay and I will review a Star Wars movie and discuss it from the compliance perspective. Today, we consider Episode V, The Empire Strikes Back and due diligence.

This movie is my personal favorite of the initial trilogy. During the climactic battle between Luke Skywalker and Darth Vader, there is the BIG REVEAL where Vadar utters the immortal line, “I AM YOUR FATHER”. In the context of knowing who you are doing business with under the Foreign Corrupt Practices Act or UK Bribery Act. I once heard a company President say he did not need to perform due diligence because he looked a man in the eyes and that was enough to know if he was honest. (I should add, this company President also evaluated the strength of a handshake as an additional level of due diligence.) Hopefully we have moved past this level of sophistication for due diligence and its evaluation thereof.

There are three levels of due diligence and you must make a determination which is appropriate for the entity or person you are investigating. If a red flag appears it must be cleared or a risk management strategy articulated to allow moving forward.

Level I

First level due diligence typically consists of checking individual names and company names through several hundred Global Watch lists comprised of anti-money laundering (AML), anti-bribery, sanctions lists, coupled with other financial corruption and criminal databases. Level I due diligence addresses such basic issues as whether the third party actually exists, the identities of management, officers, directors and shareholders and whether such persons are on regulators’ watch lists. It can also provide some basic information on whether there are politically exposed persons (PEPs) involved in the third party. Finally, if there are any media reports linking the company to corruption.

Level II

Level II due diligence encompasses supplementing Level I due diligence with a deeper screening of international media, typically the major newspapers and periodicals from all countries plus detailed Internet searches. Such inquiries will often reveal other forms of corruption-related information and may expose undisclosed or hidden information about the company, the third party’s key executives and associated parties. Level II can give you information on adverse litigation, any bankruptcy proceedings, overt signs of financial difficulty. More generally it will also provide local online information such as corporate filings, regulatory filings, lawsuits and locally archived materials. You also be able to determine if there were any in-country investigations or sanctions from regulatory entities.

Level III

This level is the deep dive. It will require an in-country ‘boots-on-the-ground’ investigation and is designed to supply your company “with a comprehensive analysis of all available public records data supplemented with detailed field intelligence to identify known and more importantly unknown conditions. Seasoned investigators who know the local language and are familiar with local politics bring an extra layer of depth assessment to an in-country investigation.

Now imagine if Luke had performed a more robust level of due diligence on Darth Vadar? Would he have been able to find out Darth Vadar was his father? Perhaps not but then again, we might not have heard that seminal line “I AM YOUR FATHER”.

Join us tomorrow where we consider Return of the Jedi and effective training.

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Welcome to the first day of a five-day podcast series Jay Rosen and I are releasing in honor of the latest Star Wars movie The Rise of Skywalker. Each day over this week, Jay and I will review a Star Wars movie and discuss it from the compliance perspective. Today, we consider Episode IV, A New Hope and risk.

The full series schedule is:

Monday, December 16, A New Hope and risk.

Tuesday, December 17, The Empire Strikes Back and due diligence.

Wednesday, December 18, Return of the Jedi and effective training.

Thursday, December 19, The Force Awakens and disruptive innovation in compliance.

Friday, December 20, The Last Jedi and the Board’s role in succession. 

One of the plotlines is that the Galactic Empire has created a Death Star with enough firepower to destroy a planet. The Rebel Alliance is determined to destroy the Death Star and has blueprints detailing the defensive posture of the Death Star. A computer analysis determines a weakness in the Death Star’s defensive shield. At one point, the Death Star’s commander, Grand Moff Tarkin, played by Peter Cushing, is told there is a ‘risk’ in the Rebel’s plan of attack. Tarkin dismisses this risk as insignificant. Of course, Luke Skywalker then proceeds to exploit this risk and destroy the Death Star.

Tarkin’s incorrect assessment of this risk was lethal. Today I want this part of the story to introduce the subject of how you evaluate compliance risk under the Foreign Corrupt Practices Act (FCPA) or an economic sanctions regime. Failure to appreciate risk can lead to some very serious and perhaps lethal consequences.

Whether you utilize one approach or another, analyzing the results of your risk assessment is as important as doing the risk assessment. With the recent Department of Justice (DOJ) remarks around how they will review the effectiveness of compliance programs during an enforcement action to determine potential credit or even granting a declination, the stakes have never been higher. Of course, for Grand Moff Tarkin, his refusal to analyze the risk assessment presented to him was fatal.

Join us tomorrow where we consider The Empire Strikes Back and due diligence.

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In this podcast series, recovering screenwriter (and Mr. Monitor) Jay Rosen and Tom (the Compliance Evangelist) indulge in passion for the movies by looking at them through the lens of compliance. Jay is a contemporary movie fan and I am more of a classic movie maven so we present a well-rounded view of the movie fandom. If you want to indulge in your love for the movies with two guys who are passionate about Hollywood and get some ideas for your compliance program, this is the podcast series for you. For this  offering, we consider the Star Trek III-The Search for Spock.

Some of the highlights include: 

Ø  How and why did this movie has such operatic themes?

Ø  Can you separate the soul from the mind?

Ø  What are some of the leadership lessons? Tom has five.

1. What is your one rule?

2. What is risk and how do you assess it?

3. Never carry a swagger stick or any other affecting accoutrement of leadership.

4. Hope for the best, plan for the worst.

5. If you include your senior management in your decision making, they will be more invested in the outcome.

Ø  How did one short scene with Uhuru (Nichelle Nichols) explain the scope of her entertainment career?

Ø  How did Ronald Reagan make a related appearance in this movie?

 Tom gives the movie a full bucket and ½ of Popcorn and a medium sized Diet Coke. Jay gives the movie a full bucket of fresh popcorn with Milk Duds mixed in.

Join us again where in our next episode of Popcorn and Compliance, we consider Star Trek IV-The Voyage Home.

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In this podcast series, recovering screenwriter (and Mr. Monitor) Jay Rosen and Tom (the Compliance Evangelist) indulge in passion for the movies by looking at them through the lens of compliance. Jay is a contemporary movie fan and I am more of a classic movie maven so we present a well-rounded view of the movie fandom. If you want to indulge in your love for the movies with two guys who are passionate about Hollywood and get some ideas for your compliance program, this is the podcast series for you. For this  offering, we consider the Star Trek II-The Wrath of Khan.

Some of the highlights include: 

Ø  How did this movie return the series to its television roots?

Ø  Did they cut back too much on the special effects?

Ø  What are some of the leadership lessons? Tom has five.

1. Sometimes you must be vulnerable to be effective.

2. Always see life as an adventure.

3. Fortune often favors the brave.

4. The needs of the many outweigh the needs of the few or the one.

5. Infinite diversity in infinite combinations.

Ø  What was Tom’s favorite line of the movie?

Ø  How would Jay the screenwriter, written Spock’s death scene?

Ø  Tom gives the movie two full buckets of Popcorn and two Diet Cokes along with the popcorn. Jay gives the movie a full bucket of fresh popcorn with Milk Duds mixed in.

Join us again where in our next episode of Popcorn and Compliance, we consider Star Trek III-In Search of Spock.

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In this podcast series, recovering screenwriter (and Mr. Monitor) Jay Rosen and Tom (the Compliance Evangelist) indulge in passion for the movies by looking at them through the lens of compliance. Jay is a contemporary movie fan and I am more of a classic movie maven so we present a well-rounded view of the movie fandom. If you want to indulge in your love for the movies with two guys who are passionate about Hollywood and get some ideas for your compliance program, this is the podcast series for you. For this  offering, we consider the Star Trek-The Motion Picture. Some of the highlights include:  Ø  Why was the plot so special effects driven?Ø  Why did the movie take so long to make?Ø  Did it make money (or not)?Ø  What are some of the leadership lessons? Ø  What are some of the compliance lessons?Ø  Tom gives the Inside Hollywood story of the production.Ø  Tom gives the movie a full bucket of Popcorn. Jay tepidly gives the movie 1/2 bucket of stale popcorn.

 Join us again where in our next episode of Popcorn and Compliance, we consider Star Trek II-The Wrath of Khan.

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In this podcast series, recovering screenwriter (and Mr. Monitor) Jay Rosen and Tom (the Compliance Evangelist) indulge in passion for the movies by looking at them through the lens of compliance. Jay is a contemporary movie fan and I am more of a classic movie maven so we present a well-rounded view of the movie fandom. If you want to indulge in your love for the movies with two guys who are passionate about Hollywood and get some ideas for your compliance program, this is the podcast series for you.For this  offering, we consider the recently released Spider-Man: Far From Home. Some of the highlights include:  Ø What drove the storyline?Ø Is teen angst always around?Ø How does this movie fit into the MCU?Ø How Marvel’s business strategy changed.Ø What are some of the leadership lessons? Ø What are some of the compliance lessons?Ø Jay gives the Inside Hollywood story of the production.Ø Jay gives the movie an overflowing bucket of popcorn as a summer movie treat. Tom tepidly gives the movie 3/4 bucket of stale popcorn.

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In this podcast series, recovering screenwriter (and Mr. Monitor) Jay Rosen and Tom (the Compliance Evangelist) indulge in passion for the movies by looking at them through the lens of compliance. Jay is a contemporary movie fan and I am more of a classic movie maven so we present a well-rounded view of the movie fandom. If you want to indulge in your love for the movies with two guys who are passionate about Hollywood and get some ideas for your compliance program, this is the podcast series for you.For this  offering, we consider the recently released Toy Story 4.  Some of the highlights include:  Ø  Why did this movie seem to come from a place of revenue generation over emotion?Ø Where was the heart of the movie?Ø Why did the entire movie seem so contrived?Ø Lack of minor characters playing much of any role. Ø The introduction of ‘Forky’ and does this character work? Ø Jay gives the Inside Hollywood story of the production.Ø  Jay gives the movie not only a half-full bucket of popcorn but a stale half-bucket as well. Tom joins with a half-bucket of popcorn as well but goes with fresh popcorn. Both were very disappointed in the film. Some of the Compliance takeaways: 

1.    How do you onboard new employees around compliance and ethics? 2.    What is your investigative protocol? 3.    Get out of the office and into the field. 

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In this podcast series, recovering screenwriter (and Mr. Monitor) Jay Rosen and Tom (the Compliance Evangelist) indulge in passion for the movies by looking at them through the lens of compliance. Jay is a contemporary movie fan and I am more of a classic movie maven so we present a well-rounded view of the movie fandom. If you want to indulge in your love for the movies with two guys who are passionate about Hollywood and get some ideas for your compliance program, this is the podcast series for you.For this  offering, today we look at the Marvel-universe hero, Endgame. As a special bonus, we are joined in this special episode by Marvel Cinematic Universe uber-fan, Sean Friedlin a/k/a The Compliance Guy. Spoiler Alert–we name who lives and who doesn’t. Some of the highlights include:  Ø  The film shattered 20 sales records in its opening weekend. What does all this mean for the film industry?Ø The film could have a net profit of over $1bn (not just gross sales) or over ½ the profit of the Disney Company in 2018.Ø What were the three waves of the Marvel Cinematic Universe?Ø How were Eggs used to great effect? Ø There was great story telling, great pathos and great acting.   Ø Who was honored in different scenes in the movie? Ø Jay focuses on The Hulk, Sean on Iron Man and Tom on Thor for extra insights into the character of each in the film.Ø  Jay gives the movie not only a full bucket of popcorn but as second bucket as well. Tom joins with a second bucket of popcorn as well. Sean gives it one bucket. Some of the Compliance takeaways: 

1.    Understand where you come from, know your business inside and out. 2.    How to overcome adversity. 3.    Things are never as low as they seem, nor as high as they appear. 4.    What is worklife balance and what can it add to your performance? 

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