You cross that line alone (a brief article on corporate behaviour and compliance)

Your “gang” will not cover your back

One common mistake made by corporate executives willing to push legal boundaries when chasing results is to believe that they will have the support of their bosses, peers and the company they work for, should anything go wrong with their endeavour. They think that they belong to a special group of handpicked corporate heroes who can decide when rules and regulations are optional and that this group, their “gang”, will have their backs.

I am not talking about a crooked executive who wants to steal from his or her company. That is a common felon, a specimen that can be found in all sorts of environments, corporations being just one of them. This felon usually acts in solitude, for his or her own benefit and takes special care in not being caught stealing. When they get caught, they usually have an escape plan at hand, but that is a different story. 

In this article, I am referring to those executives who, believing that they are going the “extra mile” for the company, cross one or two lines and end up in a dark place. This type of person is quite unique to the corporate environment. He or she is confident, proactive, outspoken and brave. He or she has what it takes to get things done and will not stop until the task at hand is accomplished.

Sometimes, they act on own initiative, other times they act following direct orders, insinuations or open commands such as: We must do what it takes to beat the competition! Of course, if asked about it, the person issuing the order will answer that the “do what it takes” order had to be carried out in a legal, compliant way. But that is not how it sounded to our high-flying executive’s ears. 

Sometimes, these executives – even senior ones – think that there is non-written rule of allegiance, loyalty or omertá (the silence code of the Sicilian Mafia) that will save them from the disciplinary or legal consequences derived from their not so holy acts.

However, as proven by the – regrettably too many – corporate scandals that have unfolded in recent years, there is not such a thing as corporate omertá. 

This is especially true when it comes to point fingers in a breach of compliance or corruption case.

As some executives have painfully found out, corporations are quick to throw overboard a suspected delinquent employee, even if he or she has not personally profited from his or her wrongful actions, if that is what it takes to save the ship. In fact, the company may as well throw him / her overboard even if the ship is not sinking, but a few gallons of sea water have leaked into the lower deck. Why getting rid of a great talent even if the risk is not that high or the evidence of wrongdoing is not conclusive? As concisely explained by mafia boss Remo Gaggi (the fictional Midwest gangster played by actor Pasquale Cajano in 1995 Martin Scorsese’s “Casino” film) when deciding the physical elimination of a gang member whose allegiance was slightly dubious: Why take chances?

All the sudden, all those bosses and peers that, more or less subtlety, encouraged the now troubled executive to get that cunning tax deduction, bend the company’s credit rules or engage in opaque dealings with authorities to get that special license, no longer answer his or her calls.

Soon, that manager realises that he or she is alone. All the hailers and pushers who prompted him or her to take that bold action now act as if he or she did not exist.

Who are you, again?

The employee then turns to the broader corporation and says: But I did it for you! Yes, the annual bonus or that elusive promotion was at the back of my mind when I did it but, really, I did it because a (wo)man has to do what she/he has to do. That is why we are managers, we manage things and get the job done! No excuses given, or prisoners taken. Now I need you to cover my back, pay my lawyers and keep me employed while the storm rages on. 

After an endless eternity of silence and no answer from the company, the manager realises one – now seemingly obvious – thing: companies do not behave in a “humane” way. We call them “moral”, “ideal” or “legal” persons (as opposite to real persons) but they do not have feelings, friends or allegiances. 

What companies have is by-laws, codes of ethics, internal rules, legal managers and compliance officers. They are the companies’ “conscience” and none of them will be lenient with a suspected delinquent employee. 

On the other hand, people who work in corporations do behave in a are very humane way. When they feel threatened, they activate their most basic human instinct: the survival one. This instinct will be in full gear for all those involved, once the news of the committed “crime” and ensuing investigation come out. Everybody will do whatever they can to save their own souls. 

What this now very troubled executive also probably failed to see when he or she undertook that special task is that when you engage in an illegal or unethical behaviour, you are not only putting your own job, reputation, assets and freedom on the line. You are putting other people’s jobs (and their reputations, assets and freedoms) on the line too. These people will be questioned. Then your fate will depend on people who will have to choose between protecting a suspect felon or protecting their careers. Guess which one they will choose. 

As for the people probing the case, they will be very senior and outside your sphere of influence: think of regional or global company directors, central compliance officers and remote, expensive NYC or London based external counsel. For even if what you did may not look that bad locally, there is probably one or two regulations in the jurisdiction of your company’s global headquarters that have been breached by your actions (UK’s anti-bribery act, anti-corruption European directives or US regulations for companies with overseas activities comes to mind). 

Most likely, the people leading the investigation will not even know you. They will not care whether you are last year’s record-breaking sales manager, rain maker financial director or the charming head of PR who won the hearts and minds of influent politicians. What makes matters worse, they too have a lot to lose if they look hesitant to deal with the issue in a swift manner. Their jobs, careers and pensions are also on the line. They want the problem solved and, sometimes, the easiest, fastest and cleanest way to do this is to get rid of you altogether. No, it will not be done in the Remo Gaggi’s way, but it will not be nice either. 

Failure to be aware and understand these circumstances is very often the reason why some company managers engage in risky behaviours.

Nobody is “The Company” 

If anybody told our troubled manager to hide or inflate profits, bribe that customs officer or turn a blind eye on that harassment case, this person did it on his or her own. He or she could never have done this in the company’s name. The reason for this is simple: no person – no matter his or her rank or paygrade - is entitled to issue an illegal order (and no, that person’s boss is not the company either, he or she is just another employee, who just happens to sit higher in the corporate food chain but is bond by the same rules and regulations as our troubled manager). 

Therefore, no matter what kind of support a superior may be granting you when commanding, inciting or suggesting foul play, do not be fooled: it is not “The Company” who is asking you to do it. It is that individual, who probably expects to obtain some personal gain from your actions. 

Maybe, if you are lucky, you will not get caught this time and your actions could buy you the “wise guy” tag… for a while. But if you do get caught and - believe me – these days it is usually only a matter of time before you do, it is like being a spy behind the enemy lines in a Cold War film: everybody will deny they know you. Your former colleagues will become your enemies and you will not get a medal. 

“The Company” (now the real one) will get rid of you as soon as possible to prevent further damage to its brands, corporate name, and share price. And who could blame the company for it? Corporations’ most important duty is to its shareholders, clients and loyal employees. Without them, companies could not exist. Doing the best for them is where the company’s morale compass aims at, not at saving “fallen heroes”. 

Read this before you proceed

So, before engaging in dubious acts, you need to ask yourself a few questions: 

If you are acting on own initiative:

Are you sure your superiors are fully aware of what you are going to do? 

Is there a chance that you misunderstood what you considered a direct or implied order?

If you are acting following explicit or not so explicit orders:

Is there any written communication about this action I am being asked to perform? Granted, even today, some people will be dumb enough to write down the plot to assassinate Julius Caesar in a beautifully detailed memo or Academy Award winning PowerPoint presentation, but this is not the rule. Generally, nobody will give you an illegitimate order in written. If an order cannot be written, it is usually a good sign that, if anything goes wrong, the person who issued the order will be quick to bail out of the situation, leaving you to put off the fire by yourself.

Why is the person suggesting or commanding this action not doing it by him/herself? If there is an opportunity to go for gold and glory, you would assume that, bar a case of rare and excessive generosity, he or she would grab it.

In any case:

How would this action look if published in the first page of a newspaper? Would you feel comfortable telling your spouse, children and friends about it? Usually, your gut feeling will be right. If it is not publishable, it is probably wrong.

Has the compliance / legal department checked this? When in doubt, do not hesitate to ask for the experts’ opinion. If they are reluctant to provide it or the opinion is ambiguous or negative, it is probably the ultimate red flag you need to walk away from this mission.

Bottom line: do not cross the line

You may feel like talking (or writing) about this is easy, after all you are the one who has stand up and say no to your boss or refrain from taking that medal winning initiative and live with the consequences. But guess what: the consequences of a bad end-of-year performance review cannot be compared to the consequences of falling from corporate heaven into corporate infamy. 

So, the next time a boss, a team mate or the little devil inside asks you to perform a dubious business action or comit a faulty omission “for team and company”, know that what is really being asked from you is to cross the line, alone. Will you do it?