Wednesday, December 2, 2015




      There's a lot of buzz these days about corporate compliance and deterrence.  Everyone is either writing about it, reading about it or scrambling to hire a compliance officer to help them stay on the right side of the law.  Why all the hullabaloo?  Because seven years after the crash too many corporations continue to operate without a moral compass and are utilizing the No Questions Asked, (NQA), business model to gain even greater financial success.  Equally alarming is the general public doesn't seem to have a problem with it. And why should they because as long as the supply and demand chain isn't broken everyone gets along just fine. Results are really all anyone cares about anyway. 


    Human kind has always operated on a results driven basis.  First, long ago, as a means of survival as in if you work hard to gather food you will eat and live to see another day. Today, according to the Urban Dictionary, results driven means, "...relating to a form of corporate strategy focused on outcomes and achievements..... and holds performance to be more important than procedures."  And therein lies the problem. Too many are dismissing proper procedure in favor of performance to not only maintain a competitive edge but to go far beyond.    It's a given that competition in the workplace continues to ramp up as there are only so many dollars to be acquired in both the emerging markets as well as in the established marketplace. But the new super aggressive model of business as usual means that companies are willing to put themselves and their workers at extreme risk to excel at any cost.  But where do ethics fit in when this model is accepted?   When ethical behavior gets tossed out of the c-suite it's a slippery slope toward perverse incentives becoming the order of the day. When these incentives are either covertly or openly encouraged as a means to an end then open market competition becomes nothing short of a blood sport.  


     Whatever lessons were learned post crash, (we did learn that the bailouts of 2008 were nothing more than green lights for permission to proceed with business as usual), they have been short lived.  Profit driven risk is a given in today's highly competitive race to place but ladies and gentlemen the game has changed because the risks of doing business in a global market in a recovering and growing economy have increased exponentially.    Corporations are modern day gladiators who will fight to the the death for survival and gain using any means possible.  In many cases they will feed their young to the lions. You or a loved one may be facing risks in your workplace that you had no idea existed.  Corporations have little to lose and everything to gain by utilizing hard core results driven tactics that encourage unethical and illegal business practices and one must "go along to get along" in order to keep an income flowing to support themselves and or their families .  But individuals have everything to lose when undertaking dangerous risks on behalf of their employers. As a former white collar wife I take great offense to the current corporate climate that puts workers and families at great risk for the greater good of the company.    


       The motivation(s) to perform outside of proper procedure are similar for both the lone actor and the corporation.  Each has the same method of operation for getting ahead at any cost for their own benefit caring little about the consequence to self or others. However this similarity stops at the point of risk and the ability to absorb high risk consequences. Most corporations have contingency plans in place for any number of risks and in many cases they also enjoy the perks of DPAs, (Deferred Prosecution Agreements), and NPAs, (Non-Prosecution Agreements), in the event they have to tango with the Feds. The Feds can't put an entire corporation in prison but they can levy hefty fines.  These agreements and fines are served up under the guise of justice.  It's a win win scenario for all concerned. Although heavily fined, corporations can continue to operate while the Feds rake in billions of dollars in settlement fees.  With ample funds to cover these settlements corporations only have to endure the sting and embarrassment of their actions ever so briefly as the public has a short attention span and will look the other way in order to be able to continue to get the service/product they want without interruption.  A small bruise on reputation is not enough to deter a loyal customer.  Too big to fail corporations  embrace this predictable behavior and incorporate them into their risk assessment plans.  In American culture corporations do not lose customers unless a large portion of the population is directly affected in a negative way such as direct liability mass poisoning!!  Most large financial institutions are safe because they are now required to keep capital reserves high in order to offset the risk acute loss poses to the economy at large, thus they have a well planned and paid for safety net.  The public tends to reach angry mob status with banks but they are not angry enough to take their business elsewhere so there is also the built in lazy depositor to fall back on come time for risk assessment.  And finally, large corporations and financial institutions have deep pockets to hire the best defense teams and public relations firms money can buy to help them safely navigate through such troubled waters. 


     So how can the lone fraudster protect himself? He can't. Individual actors have no safety net.  In fact most lone actors perform fraud without ever fully considering the consequences.  Wouldn't it be nice if an individual who has committed a financial crime could be offered the same DPA as that of a large corporation?  Deferred prosecution agreements are rarely offered to those that act alone.  Unlike the corporation, more often than not lone actors lose everything as a result of their fraudulent behavior.  The cost benefit ratio a corporation might analyze is far different from that of an individual's assessment of risk for the individual risks nothing short of total annihilation of self, family and sovereignty and his actions will forever strip him of his reputation both professionally as well as personally. Worst of all, his family will be left in acute destitution and displacement. What on earth could possibly be worth risking every aspect of a life worth living?


     So as the conversation continues regarding compliance and operational risk management I urge compliance officers, (as well as individuals),  to begin to asses risk not only on a monetary scale but on a personal scale as well.  Corporations are made up of people. People who make decisions regarding risk and how to manage those risks and people who perform on behalf of the corporation. Enforcement of compliance to procedure over performance must be held above all else. It is a given that employees have an obligation to their employers to perform to the best of their abilities on behalf of the corporation. But corporations have an obligation not to place employees and their families at risk for the betterment of the corporation. 


     Overall, corporate America has been a very bad role model  for the modern day executive and small businesses by setting the tone that corruption pays and pays big.  If you are a risk manager or compliance officer in need of an aggressive approach to operational risk management please contact me.  As a former white collar wife and founder/ facilitator of The White Collar Wives Club I can vividly illustrate the horrific real life consequences families endure as a result of fraudulent corporate behavior and can offer a clear path to deterrence that guarantees results. 


Lisa Lawler

The White Collar Wives Project 



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