Good compliance begins with clearly communicating the facts and enough resolve to fix the problems you uncover
To put it bluntly, reporting identified or potential compliance issues to the board or those in leadership positions is difficult. This truth is particularly grating if you have someone involved who doesn’t want to correct the problem. I had to deal with this reality as a compliance officer and I understand the challenges. What I don’t understand is why people give up.
It is sickening to see the congressional hearings in which members of legal, audit, finance, and in one case, a compliance officer, were all paraded before senators to say, ‘Yes, I knew, and no, I didn’t do anything about it.’ They were either worried about their jobs, felt these responsibilities weren’t theirs, or simply didn’t have enough backbone. Clearly, most of them really needed help delivering the message. I often hear that compliance officers should report to the board but I rarely hear advice as to how they should do it.
The method I used could aid any compliance officer. it should go without saying that in any good compliance program the job description includes the responsibility to report compliance issues to leadership and/or to the board. As a compliance officer I worked with physicians and with management, a terrifying environment indeed. And while many physicians are saints, others can be extremely difficult, often resorting to intimidation to put a stop to things they don’t like.
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In my experience, I made sure to have the key facts backed up by experienced outside professionals, as credible sources are key. With almost all compliance issues, problems are caused not as a result of a single faulty component, but due to a cascading series of things that went wrong. When looking for a solution I would pinpoint the main area that had to be changed or corrected, then leave the rest until I had agreement to fix the main problem. Getting that agreement often resulted in an implied agreement to fix the related issues.
A technique often used by upset or manipulative people is to try to drive the discussion toward smaller related problems or weaker supporting arguments, and to then discount them. They will go on to tell other people (whose support you need) things like, ‘He has nothing,’ or ‘He has a weak argument,’ and sit back smugly in their chairs.
To be fair, some in strong leadership use this intimidation technique in a professional manner to quickly sort the wheat from the chaff. They attack the problem to see if it holds water. If you hang on and are clear, they often get behind fixing the problem. The conundrum lies in the fact that many people crack under this interrogation because they use poor technique. They walk away saying, ‘These guys don’t want to do the right thing.’ The truth is, they failed because of their poor delivery.
Often the person who finds the problem is the problem. It’s not always the leadership’s fault. Leadership can get daily reports that ‘the sky is falling’ and has to sort through them in some expeditious way.
Warning signs
Some people who intentionally want to trip you up may also begin the conversation with, ‘Is that all you have?’ Poor negotiators would respond, ‘Of course not,’ and give their second weakest argument, then their next weakest argument and soon they would be trying to support the need to go to the board with junk. Manipulative people harp on the weaker pieces of the argument and if there is no one willing to bring the conversation back to the main point, bad decisions are made. Many people believe more is better and that is not always the case.
What I would do in this situation is pick a single sentence describing what happened and a single sentence describing why it was wrong (usually in the form of a law or regulation). Of course background must also be provided, along with further explanations, discussions and details. However, every five minutes or so, I would come back to the point. Many people intentionally and unintentionally get lost in the details.
I think sweeping generalizations are underrated. In fact, they can often be quite useful. For instance, most people, when faced with the problems described above, do one of two things: go along to get along and ultimately give up, or, go back to their office, and maybe get a baseball bat and break everything in sight. In the latter option, after a brief battle with defensive parties, the person goes over their heads to the highest-ranking person they can find (maybe the board) and starts ranting. Neither of these two scenarios works well.
Instead, I would climb the ladder of authority, but as quickly and deliberately as possible. I wouldn’t rant but I also wouldn’t stop.
An offer they can’t refuse
After a few meetings in which I would regularly come back to the point without getting anywhere, I would make them an offer they couldn’t refuse by suggesting that my job description, the US Sentencing Guidelines and other important documents state that I must report this issue. I would tell them I respected their opinion but that we seemed to be at an impasse and I didn’t want to report the issue alone.
Because we had a tie with regard to the corrective action, I would suggest we go to anyone they choose to settle the tie. If that person could get us to a point of agreement, we could be done with the issue. They often picked people who would just cave to their pressure or had no authority. I didn’t care. If that person also wanted to do nothing, I would say that since we couldn’t reach an agreement, they could pick anyone else to help settle the tie. I didn’t care how many people we had to go to before we went to the board, as long as we did it quickly.
I once had a case that went from internal audit to a consulting firm, a second consulting firm, a law firm, the chair of the committee that wrote the rule and finally to three of his colleagues from around the country. This was done inexpensively and quickly, because I would just ask that the main point of the case be confirmed, not the endless details.
In the end, the case went to the compliance committee at which point I said I was done arguing. There wasn’t a single question, just an affirmative decision to fix the problem. Frankly, they probably thought I went too far, but that is just what I wanted them to think.
I used this approach many times. I rarely ever got out of anyone’s office without a settlement. We rarely went to anyone to settle the tie. They often knew they were wrong and didn’t want to have their dirty laundry aired. They wanted to see if I was weak. Some manipulative people feel that if they can win an argument with the first person that comes along, everything is going to be okay. Which, of course, is not often the case. Just ask Enron, WorldCom or Tyco.
