How To Deal When You Get It Wrong

It’s such a horrible feeling. Your stomach starts to turn, your breathing becomes labored.  Perhaps you begin to sweat, feel the need to sit down, or throw up.  Your mind races.  “How could this have happened?”  “How could I have been so stupid?”  “Why didn’t I catch this earlier when I could have fixed it?”  Nearly everyone in compliance has been there, and if you haven’t, you probably will be soon.  Sometimes, despite our very best efforts, we get it wrong.
 
Perhaps you only read the first email in the chain and gave an approval, when, if you’d had time and energy, you’d have read the whole thing and realized the request was against policy.  Perhaps it was late at night and your child was asking a question at the same time you were trying to listen to a conference call taking place half-way around the world when you gave bad advice.  Perhaps you agreed too easily with the pushy head of sales without investigating alternatives.  It doesn’t matter why, it’s a problem, and it is your fault.
 
Particularly in compliance, we have an idea that we need to be perfect.  When your job is to create and enforce the rules, it feels awful when we fail to abide by them ourselves.  And yet, as we are all imperfect, we will all sometimes fall short.  When we do, how can we deal with it most effectively?

Put It In Context
 
Sure, at that moment it may feel like the end of your career, but the likelihood is that as the famous saying goes, “this too shall pass.”  Even enormous mistakes are wiped away over time.  Think about how the issue will feel in five minutes, five days, and five years.  You’ll have many opportunities to get it right in the next five years.  Whatever happened will probably be OK.
 
Accept That You Made The Mistake
 
Few things infuriate people more quickly than watching someone deny responsibility when they have clearly made a mistake.  You may be seen to be lying, instead of trying to simply save face.  Do yourself a favor- accept that you made a mistake; publicly if required.  Apologize sincerely, and drop it. 
 
Try Not To Be Defensive
 
Along with accepting that you made a mistake, you should try not to be defensive.  If you are contrite and willing to learn from the mistake, you are much more likely to win the affection and forgiveness of those around you.
 
Learn From It
 
My father rarely swore, but when something was truly hard, he occasionally said, in a tongue-in-cheek-way, “Oh good, another f-ing learning opportunity.”  We may very well feel this way about our mistakes, but they do in fact, lead us to wisdom, experience, and the opportunity to get it right next time.  Maya Angelou famously said, “When you know better, you do better.”  I couldn’t have said it better myself. 
 

FCPA Third-Party Risk: Budweiser, FIFA and 2014 World Cup- Part 1

Note: This is a guest post by attorney and compliance expert Ramsey Kazem.  It is the first in a five-part series that we will be sharing for the next five weeks. 

The 2014 World Cup soccer tournament in Brazil provides an interesting case study of how changing conditions and the failure to recognize and respond to red flags can transform a lucrative business opportunity, with seemingly low third-party risk, into a high-risk venture with substantial FCPA exposure.
 
The World Cup is the most popular sporting event in the world.  In 2014, the tournament reached a television audience of 3.2 billion people with approximately 1.013 billion tuning in for the final match.  With the eyes of the world captivated, the World Cup presents an exceptional platform to promote the game, showcase the host country, and highlight the philanthropic achievements of the soccer community.  From a business standpoint, the World Cup presents a tremendous opportunity to market commercial products and services.  It is no coincidence that from 2011-2014 soccer’s governing organization, the Fédération Internationale de Football Association (more commonly known as “FIFA”), earned a total of $1.6 billion in sponsorships alone.
 
While FIFA offers lucrative business opportunities for its sponsors, there is a potential downside to doing business with this organization. 
For many years, there have been rumors of widespread corruption within FIFA.  In 2015, these rumors were all but confirmed when the DOJ filed a 92-count indictment against more than 30 FIFA officials and business partners.  The indictment alleges a complex scheme of corruption where high-ranking FIFA officials solicited bribe payments in connection with tournament related contracts, media and marketing rights, and sponsorship rights.  In addition, senior FIFA officials are alleged to have received bribe payments in relation to the host country selection process for the 1998 and 2010 World Cup tournaments.  The trial in this matter is tentatively set for November 2017, but so far at least sixteen individuals and two sports marketing companies have pleaded guilty for their roles in the corrupt scheme resulting in more than $200 million in forfeiture.  To date, none of FIFA’s sponsors is directly implicated in the corruption scandal.  Nevertheless, they should closely monitor any developments on this front as their continued affiliation with FIFA could present a threat to its brand reputation. 
 
From an FCPA third-party liability perspective, a sponsor’s decision to partner with FIFA for the 2014 World Cup appears to have been low-risk.  The rumors and recent allegations, even if true, focus on bribe payments to FIFA, a non-governmental entity, whereas the FCPA prohibits the bribery of foreign government officials.  Moreover, the allegations against FIFA focus on the organization as a recipient or solicitor of bribes.  The FCPA only penalizes the person or entity offering, making, or approving the bribe payments.  For these reasons, an initial FCPA risk assessments would have green lighted the sponsorship opportunity and categorized the business relationship as low-risk.  Nevertheless, it is important to remember that a risk assessment is only a snap shot in time.  Changing conditions and unaddressed red flags can quickly alter the risk profile of a business opportunity.  This is precisely what happened with respect to Budweiser’s sponsorship of the 2014 World Cup.
 
In 2006, when Budweiser extended its sponsorship agreement to include the 2014 World Cup, its business relationship with FIFA presented very little FCPA risk.  At that time, Budweiser had been a World Cup sponsor for nearly twenty-years without incident and there were no obvious red flags signaling FCPA concerns.  However, in advance of the 2014 tournament, a controversy emerged that prompted FIFA to directly engage with the Brazilian government and demand governmental action for the exclusive benefit of the King of Beers.  In so doing, the Budweiser became exposed to significant FCPA risk.
 
This is Part I of a five-part series discussing FCPA third-party risk in the context of Budweiser’s sponsorship of the 2014 World Cup. Part II will provide an overview of Budweiser’s relationship with FIFA and discuss the changing conditions that substantially altered Budweiser’s FCPA risk profile.  Part III will identify and discuss the red flags that should have put Budweiser on high alert of its increasing FCPA risk.  In Part IV, using Budweiser’s sponsorship of the 2014 World Cup as an example, we will discuss a two-phased strategy for directly confronting and mitigating FCPA risk.  Finally, in Part V, we will explain how the lessons learned from this case study should be applied to mitigate FCPA risk in future business opportunities.

Ramsey Kazem can be reached by phone at +1-404-872-5615 or by email at info@thethreetwelvegroup.com.

Wildly Effective Compliance Officer Tip of the Week - 33

When you’re giving a speech or training, always imagine yourself in the position of your audience.  If you were listening, would you be entertained?  Would you be learning information relevant to your current role?  Would you be able to understand what you’re being told, and be able to implement it easily?  Always think of how you would experience training before putting it out to other people in the business.  Chances are if you’d be bored, they will be too.  If you’d find it interesting, you’re likely on the right path.

Wildly Effective Compliance Officer Tip of the Week - 32

When you meet new people in the business, be sure to tell them your positive intentions up front and out loud.  Say things like, “I’m here to help make sure you understand all of our policies and to be a friend to the business.”  Telling people your intentions up front helps to put people at ease and also to know what to expect from you.  When you live up to your statements, that builds trust, and trust builds good relationships.

Sales Incentives: How To Tame This Potential Ethical Foe- An Interview With Richard Bistrong

In this fast-moving 15-minute video, former VP of Sales and current compliance expert Richard Bistrong explores one of the most potent problems of our time: sales incentives gone amuck.  From the Wells Fargo scandal to VW, sales incentives have been the undoing of the reputations of many companies recently.  Hear Richard address the fundamental challenges around sales incenvtives, and offfer best practices, including answering questions like: 

What are the unexpected consequences of aggressive sales incentives? 
When are stretch goals imposed by management useful, and when are they a moral hazard? 
What is the Compliance team's role in handling sales goals? 
What happens when bad behavior hides behind good performance? 
What role do shareholders have in sales incentives and preventing unintended (bad) consequences? 
How do you fix your company's sales incentives to make them better?

Richard can be reached via his website www.richardbistrong.com or richardtbistrong@gmail.com

Wildly Effective Compliance Officer Tip of the Week! - 31

Be sure to stop small indiscretions and breaks in policy before they become rampant.  It’s easy to think, “Oh what’s the big deal?  It’s just a small indiscretion.” But this kind of thinking can lead to a normalization throughout the business of violating policies.  Small cracks can become big fissures, and people won’t know whether the policies really apply. Keep bright line rules which are easy to follow. Not only will it help keep everyone in line, it will also teach everyone what is expected of them.

The Case for Certifying Your Anti-Bribery Program

Check out this article I wrote for November's edition of Risk Universe Magazine.  In it I make the case for certifying your Anti-Bribery progam under ISO 37001.  Click here to read.