Highlights from the Global Ethics Summit
I had the privilege of moderating this panel, which included Douglas Lankler, chief compliance and risk officer at Pfizer; Alan Yuspeh, chief ethics and compliance officer at HCA Group; and Marc Litt, partner at Baker McKenzie specializing in the securities industry and white-collar crime issues (and previously the lead prosecutor in the Madoff case).
We covered a lot of ground in an hour, from practical issues like how to manage the compliance workflow in a highly decentralized organization to high-level issues regarding what a good – and bad – compliance culture looks like. A particularly interesting point was made by AlanYuspeh: he stressed that the culture of compliance is just as much about clarity from the compliance department as it is about the actions of top management. Moreover, the panelists agreed on the importance of the “tone from the middle,” reinforcing each day the message and culture generated from the C-suite.
The panel also touched on how expectations regarding compliance have evolved, not just since the financial crisis but as far back as Enron and Sarbanes-Oxley. Drawing on his experience as a federal prosecutor, Marc Litt emphasized the growing expectation that firms implement programs based on the characteristics of the firm, its industry, and the evolving regulatory and enforcement environment. As Marc also pointed out, one result of the perceived failures of the regulators in the financial crisis and Madoff scandal is a regulatory environment dedicated to not being caught napping again, meaning more and deeper information requests and the initiative to encourage whistleblowers to come forward and provide information directly to the SEC.
The discussion wrapped up with Doug Lankler’s particularly valuable insight into the restructuring of the compliance function at Pfizer in the wake of a case involving the marketing tactics used by some of its sales reps. As part of the settlement, Pfizer agreed to remove compliance from the legal department and elevate it to a level equal to and independent of the general counsel, reporting directly to the CEO. The upshot: propelled by the support of the CEO, there is now a very clear emphasis on compliance, and ethics, within the company.
With an audience filled with compliance and ethics professionals, you’d be tempted to think this is fairly standard stuff, but the differing perspectives of the panelists reinforced the need to see the world beyond our own experiences and understand how others, particularly in highly regulated sectors, have approached the same problems.
Guest post by Scott McCleskey, managing editor, Governance, Risk and Compliance