Compliance Interview

In a recent interview, Mark Pastin discusses a wide range of issues on corporate compliance. Please feel free to offer comments on any of the topics discussed in the video.

 

Welcome

headshot of Mark PastinWelcome to Mark Pastin’s web site. You will find information about Mark and his publications, services and speaking engagements here. Mark started working on ethics and compliance problems in business, government and the professions in the early 1970s. His 1986 book, The Hard Problems of Management: Gaining the Ethics Edge, was the first to take a managerial approach to ethics in business. (See Publications for details.) In his new book, Mark shows readers how to use their own innate ethical sense to create organizational and social change. Make an Ethical Difference: Tools for Better Action was released late in 2013 and is available now at Amazon.com and Berrett-Koehler Publishers.

Author Interview

The attached video explains the main themes of Mark Pastin’s new book Make an Ethical Difference. One novel theme of the book is that individuals have an innate ability to make ethical judgments. Pastin calls this ability the “ethics eye.” More on this topic in coming posts as the main themes of Make an Ethical Difference are previewed.

How Much Agreement Is Enough

One of the excuses people give for not taking ethical action is that people never seem to agree about important ethical issues. In truth, people agree about ethics as much as they agree about science, art or anything else. It is time to put this excuse aside and Training Magazine has an article about this at http://www.trainingmag.com/how-much-agreement-enough.

Reaching Agreement on Ethics

I am always troubled that as soon as people thing of ethics, their thoughts turn to intractable disagreement. But there are broad areas of agreement on ethics, even across cultures, and it is possible to build on these agreements. This is the topic of my new article at in Business Edge. You will find it at http://businessedge.michcpa.org/issue/article.aspx?i=v11n8&a=699&s=MI. As always comments are welcome.

 

The Walmart Decision

A recent (July 23, 2014) unanimous decision by the Delaware Supreme Court has potentially momentous importance for ethics and compliance programs. Because Delaware is the “corporation state,” other courts tend to follow the Delaware courts on corporate governance issues – remember the “Caremark case.”

At issue was a discovery order on behalf of civil litigants in a Foreign Corrupt Practices Act (FCPA) case against Walmart alleging that Walmart’s board may have breached a fiduciary duty to investigate bribery allegations. (Wal-Mart Stores, Inc. v Indiana Electrical Workers Pension Trust Fund). Among the documents sought by the plaintiffs were files from Walmart’s former compliance officer and files allegedly pertaining to an on-going investigation being conducted under legal privilege.

I know little about the underlying litigation which concerns allegations of bribery in Mexico. And that is not what matters. What matters is that files and documents thought to be related to Walmart’s compliance program were deemed open to discovery in a civil litigation. The Court’s decision was focused in scope, pertaining to files and documents related to potential breaches of fiduciary duty. But it is likely that this decision is a first step toward breaking down the both the legal privilege and the so-called self-evaluative privilege concerning compliance matters. The impact of the decision is great as the plaintiff’s attorneys asserted breach of fiduciary partly on the grounds that the board was or should have been informed of an on-going compliance investigation. In other words, reports of compliance concerns should go to the board but may not be protected when they do.

I believe that this decision will have significant impact on ethics and compliance programs. The relatively free exchange of information between some compliance officers and their boards may well be impaired. More importantly, asserting legal privilege with respect to investigations that are or should be reported to the board is threatened. Like most of these matters, there is a good and bad. Arguments that compliance should report to legal to protect the privilege may be weakened. But compliance reporting to a board may be subject to far greater caution. You can read the decision at:

http://courts.delaware.gov/opinions/download.aspx?ID=209130

Healthcare Reform

I am often asked what ethical questions are posed by healthcare reform. Like healthcare reform itself, this is an very complex issue about which confusion abounds. For example, healthcare reform extends healthcare coverage to more individuals. But it does so in part by cutting Medicare. Is this right? Are we financing our social goals on the backs of seniors? Healthcare reform also tries to push the costs of Medicare down through a program called the Medicare Shared Savings Program. I can’t explain the whole thing here but the basic idea is that Medicare rewards you if you drive down the costs for a given patient population while maintaining or improving quality. This sounds like a wonderfully noble idea Read the rest of this entry »

Influence with Ethics

I recently had a chance to do a webinar for a company called Soundview. Soundview is famous for its its Executive Book Summaries.

The topic is how to influence people with ethics. The key theme is that most books and talks on influence teach you how to manipulate people. Manipulating people has a “rebound effect” when people realize that they have been manipulated. When you influence with ethics, there is no rebound effect. In fact, when you influence someone with ethics, you are building a foundation for your future efforts to influence them. So the webinar definitely talks about how to become an effective source of influence, but it emphasizes the advantages of taking an ethical approach to influence.

You can attend the webinar online at http://tinyurl.com/o7yy9fp.

Be a Source of Ethical Influence

Some who have commented on Make An Ethical Difference: Tools for Better Action have pointed out that the tools provided for making an ethical difference are also good tools of influence. This makes sense since accomplishing something in ethics often means influencing people. Most discussion of influence are thinly veiled manuals on how to manipulate others. The problem with this is that people recognize that they have been manipulated and limit your future influence. When you influence with ethics, there is no rebound effect. In fact, your ability to influence grows as you learn to influence with ethics. A recent piece in CEO Magazine discusses just this point: http://chiefexecutive.net/4-ways-ceos-successfully-influence-decisions

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