Going Global: Ethics and Compliance Regulations

As more and more companies shift their focus to ethics, compliance and good corporate citizenship, international governments are also making changes to the regulations within their borders.

Posted by Joe Gerard in Ethics & Compliance on October 7th, 2010

In the past decade or so, ethics and compliance have become significantly important topics on a global scale. As more and more companies shift their focus to ethics, compliance and good corporate citizenship, international governments are also making changes to the regulations within their borders. According to Keith Darcy at the ECOA conference held in Anaheim a couple of weeks ago, “these are extraordinary time of historical significance.” I attended the session “Ethics and Compliance Goes (Quietly) Global: New OECD Anti-bribery Recommendations, Good Practice Guidance and Other Recent Developments,” which discussed the global developments that have taken place in the ethics and compliance sphere. The presenting panel consisted of Donna Boehme, Patrick Gnazzo, Joseph Murphy and Keith Darcy (Moderator). Here are my notes from the session:

OECD Developments

  • OECDRecommendations for Further Combating Bribery- November 26, 2009
    • Inclusion of internal controls, ethics and compliance requirements and practices.
  • Good Practice Guidance on Internal Controls, Ethics and Compliance- February 18, 2010
    • Includes most of the federal sentencing guidelines- 7 elements, plus additional standards.
  • Specifically focused on anti-corruption, however, implication for ethics and compliance are significant.

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  • Global standard signed by 38 nations, recognizing the significance of proactive ethics and compliance programs.
  • No US fingerprints- Incorporates most of the elements of the Federal Sentencing Guidelines. It’s good to have guidance that isn’t “US-centric,” when acting on a global scale and developing globally accepted recommendations.
  • Followed by Good Practice Guidance to be reinforced through the OECD peer review mechanisms.

Role of the Chief Ethics and Compliance Officer (CECO)

  • FSG amendments include direct reporting obligations, direct access to the governing authority.
  • OECD Good Practice Guidance- senior corporate officer, with adequate level of autonomy from management, resources and authority.
  • Competition Bureau Canada, Compliance Program Guidance- Focus on independence, professionalism, empowerment, financial support and business awareness for the CECO.
  • String of high profile settlements and judicial rulings- include a focus on the role of the CECO, including resources, reporting line and board access.
  • Senior Corporate Officer- specific wording, person at the highest level of the organization to meet the requirements of the standard.
  • Raise the importance of the role in organizational life.
  • The next step after recognition for the CECO is that the profession needs to speak up. The CECO spot is earned at the table alongside other senior management members.

UK Anti-bribery, Adequate Procedures and IFBEC

  • UK Bribery Act is now the highest standard, surpassing the US FCPA.
  • More stringent than the FCPA.
  • Broad jurisdictional reach.
  • Includes commercial bribery.
  • Emphasis on “associated persons.”
  • New strict liability standard for failure to prevent bribery through “adequate procedures.”
  • Adequate Procedures Guidance- Recently released by the Ministry of Justice, consultation September 14-November 8 2010.

6 Principles of UK Adequate Procedures

Only covers bribery- doesn’t cross over into other areas. No mention of a chief compliance officer, but there is mention of a senior officer to implement the program within the organization.

  1. Risk assessment
  2. Top level commitment
  3. Due diligence
  4. Clear, practical and accessible policies and procedures
  5. Effective implementation
  6. Monitoring and reviewing

Other Notable Developments

  • Transparency International consultation on UK adequate procedures guidance- July 22, 2010
  • NZS/AS 3806 Joint Australia/ New Zealand compliance programmes standard- April 29, 2009
  • Competition Bureau of Canada corporate compliance programs bulletin- 2008
  • Competition Antitrust Regulators of UK, Israel, Singapore, India and France
  • Hong Kong Independent Commission against Corruption- Good governance and internal control guide 2008.
  • Italy’s legislative decree 231/01 (2001)
  • Many, many more.

Joe Gerard
Joe Gerard

CEO, i-Sight

Spend my days showing off the i-Sight investigative case management software and finding ways to help clients improve their investigations. Usually working with corporate security, HR & employee relations, compliance and legal teams.

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