Business and values led compliance with a small c: Is Big C Compliance Weakening Culture Episode 4

The Preframe

Welcome to the latest edition of the Untold Compliance newsletter, where we delve into the final episode of the The Eight Mindsets podcast and ask the critical question: "Is Big C Compliance weakening corporate culture?"

Recent headlines are teeming with corporate scandals that underscore the stark implications of compliance failures. In 2024 alone, we witnessed PwC's hefty fines for lapses in auditor independence, and the UK Post Office's continuing saga with its Horizon IT system, which wrongfully accused postmasters of theft. These cases, along with Exelon Corporation's bribery scheme, reveal how stringent compliance measures often mask deeper cultural rot. Then we have the Boeing 737 Max scandal, where design flaws were concealed leading to fatal crashes, and SAP Indonesia's brazen bribery chats, which both highlight how compliance, when mismanaged, can lead to catastrophic outcomes.

Is it that Big C Compliance might be undermining the very culture it's supposed to protect?

In this week's edition, I share:

1. Feature of the Week: The final part of The Eight Mindsets podcast series: Is Big C Compliance Weakening Culture Episode 4: Business and Values-Led Compliance with a Small C.
2. Podcast Resource: A comprehensive resource I created relating to all four episodes of the podcast series, including my favorite quotes, key takeaways, and actionable points for your organization.
3. Featured Article: In "A Root Cause Analysis of Compliance Failures", I share how to guide learners through a root cause analysis to critically analyse ethics and compliance failures.
4. Upcoming Workshop: Details of my latest workshop, "Ethics Exposed: Learning from the Wirecard and Carillion Scandals," inspired by the recent PwC scandal.

Dive in and explore how we can navigate the complex landscape of compliance while fostering a strong and ethical corporate culture.

About this newsletter

This newsletter isn't just another read; it's a whole new way of looking at legal and compliance. By integrating insights from a diverse array of fields—think psychology, neuroscience, economics, physics and beyond—with seasoned legal and compliance expertise, we're crafting a narrative that legal, ethics and compliance in organisations is a catalyst for innovation.

If you enjoy this newsletter, subscribe to the Untold Compliance, The Weekly Tell, where I share insights, chapters from my new book, Told: How in-house legal and compliance professionals secure airtime, gain traction and transform organisations, tips and tools to product engaging training and communications and research I conduct within legal and compliance.

Podcast: Is Big C Compliance Weakening Culture Episode 4: Business and values led compliance with a small c

It is with a heavy heart that I share the final episode of this podcast series. While I would love to discuss the podcast's content, I’ve decided to keep it brief and instead focus on the incredible people who made it so special.

• I met Jason Meyer nearly eight years ago when my eldest son was born at the Society of Corporate Compliance and Ethics (SCCE) conference in Chicago. Whilst it is the first and only time we have met in person, I have spent a lot of time on zoom with him since. And I can hand on heart say that Jason is one of the smartest people and greatest writers I have ever had the privilege of working with. More importantly for this podcast, Jason has an exceptional talent for weaving together different strands of discussion, making complex ideas accessible and engaging for our listeners. He’s also our resident Eight Mindsets DJ (with a voice to match). Listen to the end of the podcast to hear Jason's compliance anthem for the series—it’s phenomenal.

"I am still friends with many of the people who worked for me"

• As for Ruth Steinholtz I had the pleasure of not only interviewing her but also listening to her repeatedly during the editing process. You can hear the richness of her experiences across different countries and cultures in her voice. But more than that, you’ll notice her human-centric approach to ethics and culture. As Ruth shared in our first meeting, "I am still friends with many of the people who worked for me."
• In this final episode, she discusses shifting from a top-down approach to one where ethics is embedded in the business’s DNA and the importance of values in guiding decision-making, especially when rules aren’t clear.

All I can say is that it has been a joy working with Jason and Ruth and I cannot wait to see where this tripartite takes us next.

Listen on Spotify

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Resource: Analysis of The Eight Mindsets Podcast Series: Is Capital C Compliance Weakening Culture?

I've put together an analysis of the valuable information Ruth has shared. This includes my favourite quotes, key insights, and actionable takeaways from all 4 episodes of this series, on topics such as cultural understanding, human-centric compliance, leadership, employee consultation, ethics ambassadors, and cross-functional teams.

Thank you for joining us on this journey. That's a wrap!

Featured Article: A Root Cause Analysis of Compliance Failures

What do PwC, Post Office Horizon, Exelon Corporation, Carlos Ramon Polit Faggioni, Maxwell Technologies, Boeing 737, SAP Indonesia, Albermarle Corporation, Freepoint Commodities, and Commonwealth Edison have in common?

The straightforward, easy answer is that these organizations were all embroiled in significant scandals between 2023 and 2024 and, on the face of it, compliance with a Big C and compliance with a small c failed. And as easy as it is to point blame in this way, we know that the truth is far more complex.

But can we "handle the truth?" Instead of erupting into a monologue from Jack Nicholson in A Few Good Men, let us consider our role as legal and compliance professionals in unpacking these cases using Root Cause Analysis (RCA).

RCA involves identifying the fundamental reasons for a problem by examining underlying human behaviors, thought processes, and systemic issues. It aims to uncover not just what happened, but why it happened, addressing root causes to prevent recurrence. RCA helps us understand how individual and collective actions contribute to organizational failures, involving areas such as leadership influence, employee motivation, and the organizational environment.

While we may not know all the answers, we can use our experience to make educated guesses. More importantly, we can use training sessions and workshops as an opportunity to ask questions that help participants dissect the case comprehensively, identify critical areas for improvement, and internalize key learning points.

Key Questions to Consider

• What are the relevant laws, regulations, or company policies involved?
• What actions or inactions directly led to this?
• Were there any underlying systemic issues?
• Were there weaknesses in the internal controls or processes?
• Were there cultural or organizational factors contributing to the issue?
• What role did individual behavior play?
• How did leadership influence the outcome?
• What were the immediate and long-term consequences?
• How did it affect stakeholders (employees, customers, shareholders, etc.)?
• What were the legal, financial, and reputational impacts?
• What actions were taken in response to the incident?
• What measures should be put in place to prevent recurrence?
• What are the key takeaways for improving compliance and organizational culture?
• What ethical issues are raised by this case?
• What are the broader implications for the industry or sector?
• How does this case influence regulatory practices or industry standards?

Postframe: Other people's shoes

By asking these questions, we can achieve one of the most impactful learning experiences—putting people in someone else's shoes. It’s easy to point fingers and think, "this will never happen to us," but the reality is that many small, seemingly insignificant behaviors can accumulate over time, leading to major compliance breaches.

Through this process, we help individuals grasp the intricacies of ethics and compliance failures. This understanding not only aids in preventing similar incidents but also reinforces the ethical foundations of our organizations. By fostering a culture of critical thinking and empathy, we can promote more conscientious behavior and better decision-making across the board.

Upcoming Workshop: Ethics Exposed: Learning from the Wirecard and Carillion Scandals

I am running an intensive ethics session that provides a deep dive into two of the most notorious corporate scandals in recent history. 

Learn how to identify, prevent, and address unethical practices by examining these real-world cases. CPD points awarded for lawyers and accountants.

Whilst these sessions are predominantly for accountants and auditors, finance officers and anyone in the accounting and finance profession, it's a session that anyone in Legal or Compliance can also benefit from.

What You Will Learn

• Understand the ethical breaches that led to the downfall of Wirecard and Carillion. 
• Gain insights into the importance of integrity, objectivity, and professional competence in accounting. 
• Develop strategies to identify and prevent unethical practices within your organization. 

There is a small fee. Register here.

The Caveat

The information in this newsletter (and the Eight Mindsets Podcast) is not intended to be used as legal advice. I would be happy to provide specific legal or compliance advice if you have any specific questions. Just email me at nicole@untoldcompliance.com.

Alternatively consult with a qualified professional for advice tailored to your specific situation.

Thanks for reading

Nicole Rose

Untold Compliance Co-host of the Eight Mindsets Podcast

p.s.

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Other articles by me

If you liked this article, check out:

1. The Ethics Policy Chronicles: Is Big C Compliance Weakening Culture Episode 3
2. Is Big C Compliance Weakening Culture? The Eight Mindsets Podcast Series
3. The Power of Personal Connection: Unlocking Creativity and Collaboration in Compliance Teams
4. Sex Tapes & University Hurdles: Lessons for Compliance Program
5. Why Legal and Compliance need to tell more and say less
6. Visualizing Compliance: Exploring Vision Boarding for Cultivating a Culture of Ethics and Compliance
7. Dancing with Compliance: How to use Physics to Reframe Compliance
8. Strengthening Ethics and Compliance: Lessons from Resistance Training and the 80-year old Harvard Study on Happiness
9. Challenging the Overconfidence of Compliance
10. Negotiating Compliance: Applying FBI Hostage Tactics to DOJ Corporate Compliance Standards
11. The Institute Insights: Organisations are just a “Mass of Habits”: Insights for Compliance from Sleepwalking Murderers and Compulsive Gamblers
12. How Great Leaders Inspire Action. Compliance lessons from Simon Sinek and an Aboriginal Elder
13. From Compliance to Conversion: Why the DOJ Transformed Leaders and Compliance Professionals into Marketing and Sales Teams