Compliance and Ethics: Ideas & Answers. Edition 52

Dear friends,

Welcome back to another edition of Compliance and Ethics: Ideas & Answers.

In edition 52, we start with Adam Balfour's piece 'The Two Ethics And Compliance Questions That Should Be Asked In Every Job Interview For Leaders And Managers'. In this edition, I expand on Rebecca Walker's recent piece on Board Resolutions, including an example resolution for you to download for free.

We have a piece on Shin Jae Kim , whom I consider to be a hero in Compliance and Ethics.

Finally, in our regular feature, Compliance Lite Adam Balfour asked ChatGPT if people should subscribe to Ideas & Answers. Find out how it responded.

And as always, there's more content on our website so please do visit us there to read our other articles.

Thank you, Joe.

The Two Ethics And Compliance Questions That Should Be Asked In Every Job Interview For Leaders And Managers

by Adam Balfour

Job interviews are often the only opportunity to assess an external candidate’s skills, knowledge and experience for a role, but the process needs to focus more than simply on the technical skills or knowledge that someone brings to the table. Asking the typical question “What interests you in this role?” is fine as a general icebreaker, but unless someone really messes up the answer you are likely to get a polished response that reveals little, if anything, of real substance.

The two questions that every organization should ask anyone interviewing for a leadership or manager role are (1) “Can you tell a time when you spoke up in your career and what happened?” and (2) “Can you tell me about how you have handled when employees have spoken up to and what you did?”

The first question matters because if leaders and managers have not spoken up in their careers, then they should not count on those under their responsibility to speak up - they need to understand that speaking up is the right thing to do, but that doing so can also be incredibly uncomfortable and they need to be able to relate to others who do speak up. The second question matters because leaders and managers need to be a trusted reporting channel and see themselves as such - if a leader or manager has never had someone raise concerns to them, you need to understand what type of leadership they offer and if they will be a leader that employees can trust.

If a candidate provides good and detailed answers to these questions, then their experience of speaking up and helping others to speak up should be given appropriate credit and consideration. If someone cannot answer the questions, you need to press more to understand if there are valid reasons as to why someone might not have spoken up before (early in their career, they were previously in a hostile workplace where speaking up was discouraged, etc.). If there are no real valid reasons, you need to carefully consider if this is a leader you want in your organization.

If you are a candidate and no one asks you these questions in the interview process, you need to ask about the culture and determine whether or not it is a place that aligns with how you lead others.

Integrity should be seen and valued as a highly marketable skill and mindset. Give candidates who have integrity the chance to shine in interviews by asking about how they lead with integrity and the value they will provide to your organization and employees.

A Board Resolution for Your Compliance Program – An Example

by Joe Murphy

In Edition 49 Rebecca Walker explained in very compelling language why companies should have a board resolution recognizing and empowering the compliance and ethics program. In this piece I offer an example of a board resolution to achieve this objective. 

This resolution is designed to achieve several objectives.  It empowers the chief ethics and compliance officer (“CECO”) and establishes that the board, not management, determines what happens to the CECO.  Certain reporting to the board is mandatory, including allegations against the executives and any allegations of retaliation. It is designed to prevent anyone trying to get around this responsibility;  thus, for example, there is no “materiality” threshold. But notifying the board can be as simple as an email to the chair of the Audit Committee.

I welcome any questions from our readers. Here are just a few notes about the resolution.   

The paragraph giving the Audit Committee the right to retain outside experts is taken from the Sarbanes-Oxley Act. The same is true for item 6 in the section addressing the role of the CECO. 

The provision addressing the Board’s Compensation Committee is an excellent idea I read some time ago in a draft ALI Principles document. It helps ensure your compliance program includes important coverage of incentives – one of the minimum requirements under the Sentencing Guidelines standards. 

In the section addressing the role of the CECO, item 5 provides full access to data.  This is key to meeting DOJ’s expectation that the CECO will use data analytics as part of the program. 

Read the full article and download the Example Board Resolution

Shin Jae Kim – A Quiet Hero In Compliance & Ethics

by Joe Murphy

This was a high point for me.  I had planned a vacation to South America, including a few days in Rio.  Meanwhile, back in the States, my then-partner, Win Swenson, had been discussing compliance and ethics with a Brazilian lawyer from the TozziniFreire firm in Sao Paulo.  He had a partner at the firm, Shin Jae Kim , who was very interested in this area.  When they heard that I would be in Rio, Shin arranged to hop on a flight from Sao Paulo and talk with me there.  We made the connection, beginning a years’ long collaboration with my friend Shin. 

Shin invited me to return to Brazil as a compliance and ethics missionary, and we definitely made the rounds.  I was interviewed by the business press, resulting in an article (in Portuguese).  I met with academics, lawyers, government folks, and firm clients.  Shin even took me down to the south of Brazil, Porto Alegre, a state that has many family-controlled businesses, to meet with local businesspeople and her partners there. 

Through Shin SCCE established its first really successful overseas Academy, and one that has run the longest of all international academies, continuing to this day. It was through Shin’s diligence and promotion that Brazil came to lead all countries outside of the US and Canada in SCCE members.  Many officials of the Office of the Comptroller General (CGU) attended academies and had a positive impact in promoting compliance programs and on Brazil’s fight against corruption.   

 Continue reading on our website...

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