Adventures in Compliance

Over this week’s podcast series in Adventures in Compliance, I have used stories from The Casebook of Sherlock Holmes, mining each story for themes and lessons related to the compliance professional, leadership and business ethics. In today’s offering, I consider The Veiled Lodger. It is one of the shortest stories in this volume and one of the clearest which shows the influence Holmes can bring to bear on the participants in the tale. The final problem solved informs today’s discussion of empathy in compliance.  Holmes is visited by Mrs. Merrilow, a landlady from South Brixton who has an unusual lodger who never shows her face as it has been hideously mutilated. This woman, Mrs. Ronder, carries a terrible secret but will not involve the clergy or the police and will only talk to Holmes. Holmes and Watson travel to see Mrs. Ronder and she is wearing her veil. The mutilation was caused by a planned murder gone awry. She and her lover, Leonardo, used a circus lion to murder her husband and the lion then turned on her, severely disfiguring her. Mrs. Ronder could not bring herself to implicate Leonardo in her husband’s murder at the inquest and is only now telling this story because she believes that she will soon die. Ever since the night of the incident, she has lived alone and veiled. Holmes can only offer advice in this situation; realizing that Mrs. Ronder is contemplating suicide, he reminds her that her life is worth something as an example of patient suffering in an impatient world. She responds to this by lifting her veil, and the sight is ghastly. However (and this is where the empathy comes in) Holmes see a bottle of prussic acid on her mantle and tells her “Keep your hands off it.” A few days later,  Holmes receives a bottle of prussic acid from Mrs. Ronder. In considering what Holmes told her, she apparently thought better of it. Compliance Takeaways Empathy is an important habit for any CCO or compliance practitioner to not only practice but also master.Engaging in empathy does not mean shying away from difficult conversations.Do you look for empathy in the hiring process?One way that empathy manifests itself is courtesy.People rarely think of courtesy and respect as leadership skills but if you can bring these to bear in your compliance practice, you can garner greater influence as not only someone who cares but someone who cares and gets things accomplished.I hope you have enjoyed another Holmes themed week as much as I have enjoyed rereading the stories and bringing the compliance and leadership insights to you.

Welcome back to another episode of Adventures in Compliance. This week, we are considering stories from The Casebook of Sherlock Holmes, mining each story for themes and lessons related to the compliance professional, leadership and business ethics. Today, we  The Lion’s Mane. This is one of two stories narrated by Holmes himself and not reported by Dr. Watson. The final problem solved informs today’s discussion that it is risk-based monitoring which allows a person (or company) to operate safely so that no injury occurs. Yesterday, I considered The Creeping Man as an introduction to risk management and compliance at the very top of an organization. Today I want to discuss risk-based monitoring. Compliance Takeaways What is Risk-based monitoring?It is really about continuous, ongoing monitoring for those things which provide the most potential future risk to you. By using risk-based monitoring to review issues on an ongoing basis, and the models that are behind the risk-based modeling, risk-based monitoring models, they’re continuously refined based on incoming data.Siloed Data.The problem for many companies is they are siloed in not only their data but also in the systems. Because of the disparity of data systems, many companies are not tracking rigorous, quantified information all the time. As data comes in you begin to note certain patterns, which might actually point towards a variety of red flags for more thorough investigation.See issues in real-time?Having access to information around sales, the sales process and corporate largess in areas from corporate social responsibility work, to gifts, travel and entertainment, to conferences for customers and end users. With such risked-based monitoring a compliance professional has the opportunity see trends developing which could allow an intervention for a prescriptive solution which could prevent an issue from becoming a Foreign Corrupt Practices Act (FCPA) violation.Greater Profitability.Finally, the beauty of all these techniques is that they are tools that can make companies more efficient and, at the end of the day, more profitable. They also move compliance into the fabric and DNA of an organization or to use another well-worn phrase, operationalize compliance. The Department of Justice has made clear what it expects around the risk management process. You need to develop your response now.Join us tomorrow as we mine the story of The Veiled Lodger for its compliance lessons.

We are back with another podcast on Adventures in Compliance, where we consider the intersection of Sherlock Holmes and Compliance. Today, I visit The Adventure of the Creeping Man. From this story we take the Holmes utterance to Watson “Come at once if convenient—if inconvenient come all the same”. This informs today’s discussion how Boards of Directors can be more involved in compliance through more effective oversight of risk management. Compliance Takeaways What is the role of a company’s Board in a compliance program?A Board should not engage in management but should engage in oversight of the Chief Compliance Officer. The Board does this through asking hard questions, particularly around risk assessment, risk identification and risk management.What are 6 principles for Board oversight of compliance?Define the Board’s role.A.Foster a culture of compliance risk management. B. Incorporate risk management directly into a compliance strategy. C. Define the company’s appetite for risk around compliance. D. Execute the compliance risk management process. E. Benchmark and evaluate the compliance process. 5. CCO reporting to the Audit/Compliance Committee must be structured carefully to promote ethics and compliance. Here are five best practices to help guide the reporting. a. Quarterly reports. b. Executive session. c. Sitting in on other reports. d. Informal relationship. e. Annual report to full board. Join us tomorrow as we mine the story of The Lion’s Mane for its compliance lessons.

We are back with another series of Adventures in Compliance podcasts. This week I am exploring stories from The Casebook of Sherlock Holmes. In this week’s second offering, I consider The Problem of Thor Bridge. From this story we take the Holmes utterance “We must look for consistency. Where there is want of it, we must suspect deception”. This informs our discussion on monitoring controls. Compliance TakeawaysHow do you determine that want of consistency? Monitoring controls is one key.Consider the fifth and final Objective from the COSO 2013 Internal Control Framework is Monitoring Activitiesas a guide.Further consider Principles 16 & 17 of the COSO Framework.Monitoring Activities should bring together your entire compliance program and give you a sense of whether it is running properly.Both ongoing monitoring and auditing are tools the CCO and compliance practitioner should use in support of this objective.The most important item to note is that all the controls need to be sustainable.Join us tomorrow as we consider The Adventure of the Creeping Man.

We are back with another five episodes of Adventures in Compliance to consider the next five stories from The Casebook of Sherlock Holmes, mining each story for themes and lessons related to the compliance professional, leadership and business ethics. In today’s offering, I consider The Three Garridebs. From this story the need for objective discipline in a variety of areas in any best practices compliance program. Compliance TakeawaysThat objectivity in disciple is called the Fair Process Doctrine. As you incorporate the Fair Process Doctrine in your compliance program, there are three key areas to focus on.Administration of discipline.Discipline must not only be administered fairly but it must be administered uniformly across the company for the violation of any compliance policy.Employee promotions.If your company is seen to advance and only reward employees who achieve their numbers by whatever means necessary, other employees will certainly take note and it will be understood what management evaluates and rewards employees on.Internal investigations. Simply put, if your employees do not believe that the investigation is fair and impartial, then it is not fair and impartial.An often-overlooked role of any Chief Compliance Officer (CCO) or compliance professional is to help provide employees with procedural fairness. If your compliance function is seen to be fair in the way it treats employees, in areas as varied as financial incentives, to promotions, to uniform discipline meted out across the globe; employees are more likely to inform the compliance department when something goes array. If employees believe they will be treated fairly, it will go a long way to more fully operationalizing your compliance program.Join us tomorrow as we consider The Problem of Thor Bridge.

We conclude our week of Sherlock Holmes-themed podcasts today. Over this week’s blog posts, I have been exploring the first five stories from The Casebook of Sherlock Holmes, mining each story for themes and lessons related to the compliance professional, leadership and business ethics. In today’s concluding offering, I consider The Adventure of the Sussex Vampire and it informs a root cause analysis in any best practices compliance program. The concludes my initial exploration of The Casebook of Sherlock Holmes and its intersection with compliance and leadership. I hope you have enjoyed listening to it as much as I did researching and brining it to you. But do not worry as I will continue my exploration of the entire Holmes oeuvre in later podcast series.

We are back with fan favorite Sherlock Holmes week. In this week’s special series of podcasts, I will focus on the first five from The Casebook of Sherlock Holmes, mining each story for themes and lessons related to the compliance professional, leadership and business ethics. In today’s offer, I consider The Adventure of the Three Gables and how institutional justice in any best practices compliance program.

We are back with fan favorite Sherlock Holmes week. In this week’s blog posts, I will focus on the first five stories from The Casebook of Sherlock Holmes, mining each story for themes and lessons related to the compliance professional, leadership and business ethics. In today’s offering, I consider The Adventure of the Marazin Stone and how it informs storytelling in compliance. Join us tomorrow as we continue our week of stories from The Casebook of Sherlock Holmes by looking at the The Adventure of the Three Gables and institutional justice.

We are back with fan favorite Sherlock Holmes week. In this week’s blog posts, I will focus on the first five stories from The Casebook of Sherlock Holmes, mining each story for themes and lessons related to the compliance professional, leadership and business ethics. In today’s offering, I consider The Adventure of the Blanched Soldier and learning to ask for help. Join us tomorrow as we continue our week of stories from The Casebook of Sherlock Holmes by looking at the The Adventure of the Marazin Stone and storytelling in compliance.

We are back with fan favorite Sherlock Holmes week. In this week’s podcasts on Adventures in Compliance, I will focus on the first five stories from The Casebook of Sherlock Holmes, mining each story for themes and lessons related to the compliance professional, leadership and business ethics. In today’s offering, I consider The Adventure of the Illustrious Client and its relationship to the humble reference check. Join us tomorrow as we continue our week of stories from The Casebook of Sherlock Holmes by looking at the The Adventure of the Blanched Soldier and learning to ask for help.

Today, I consider the theme of imagination in your compliance program.  The Adventure of the Empty House may well be one of the most famous in the entire Holmes oeuvre. It was the first story in over ten years, although Doyle set the tale only three years after the meeting of Holmes and Moriarty at Reichenbach Falls. Returned from touring the world, Watson and Holmes have an emotional reunion (at least for Watson) and then begin to tackle a locked room murder. This leads to Holmes being in jeopardy and putting a mannequin in his window to draw an attempted assassination attempt by Colonel Sebastian Moran, a henchman of Dr. Moriarty. Moran uses an air rifle which makes the murder and attempted murder all the more sinister. 1.     Every DPA and NPA mandates, “The Company will conduct periodic reviews and testing of its anti-corruption compliance code, policies, and procedures designed to evaluate and improve their effectiveness in preventing and detecting violations of anti-corruption laws and the Company’s anti-corruption code, policies, and procedures, taking into account relevant developments in the field and evolving international and industry standards.”[Emphasis supplied]. This means that the DOJ expects imagination in your compliance program to keep up with evolving international and industry standards. 2.     This means you should begin with a strategy for your compliance program. This means creating a compliance program that will create value for customers, i.e., employees, third parties and customers; show how the company will capture that compliance value going forward and finally which types of compliance imagination to pursue.3.     A good strategy will promote alignment among diverse groups in a company, help to clarify objectives and priorities and guide your focus on those objectives. It can also be modified as necessary and with sufficient feedback. 4.     there must not only be sufficient resources allocated but management must also incentivize the business units to proceed with implementing the imaginations.5.     You must recognize that your compliance program will have to be innovative. Start with a strategy, that has senior management buy-in and support, then move to implement. Finally use data in a feedback loop to fine tune your imaginations. That is the bottom line for imagination in compliance.

In this episode, I consider the theme of mentoring in compliance.   In the story The Adventure of the Six Napoleons, Inspector Lestrade says to Holmes, “Well,” said Lestrade, “I’ve seen you handle a good many cases, Mr. Holmes, but I don’t know that I ever knew a more workmanlike one than that. We’re not jealous of you at Scotland Yard. No sir, we are very proud of you, and if you come down to-morrow, there’s not a man [...] who wouldn’t be glad to shake your hand.” This comment provides insights into how Holmes is viewed by other law enforcement officers; Holmes is a sort of living legend and the other officers respect his skills. The matter involved the theft of jewelry as Inspector Lestrade of Scotland Yard brings Holmes a seemingly trivial problem about a man who shatters plaster busts of Napoleon. One was shattered in Morse Hudson’s shop, and two others, sold by Hudson to a Dr. Barnicot, were smashed after the doctor’s house and branch office had been burgled. Nothing else was taken in any of the break-ins. It turns out that the thief had stolen several pieces of jewelry and then hid them in the Napoleonic busts. The thief, having been released from prison on an unrelated offense, was tracking down the busts in which he had placed the jewels for hiding, breaking them open and reclaiming his purloined property.  What are some of the ways that you might mentor a younger or less senior compliance professional? I think there are several ways suggested by Conan Doyle as epitomized by the statement by Lestrade and his relationship with Holmes and Watson. 1. Passion- CCOs and seasoned compliance professionals tend to be passionate about compliance even if (like myself) they have a legal background and came to compliance from a corporate legal department. You should work to transmit that passion to others you are mentoring. 2. Developing Networks-Introduce your mentees to others in your organization, so that they can be exposed to different leadership styles and see how such leadership styles work in various areas and with different constituencies. 3. Develop Purpose-This can be aided through reflection, introspection and ability to change as a leader. Moreover, rather than influencing others through individual speeches or stories, the everyday connections between a compliance professional’s sense of purpose and the compliance vision can work to form an indelible impression about the importance of compliance to an organization.   4. Next Generation of Compliance Professionals-it is equally important that you communicate that to your mentee as it is certainly important that each generation of compliance leaders be fit for the future and be committed to continuous improvement going forward. 

Today, I consider The Adventure of the Abbey Grange.  In the story The Adventure of the Abbey Grange, Holmes feels something is just not right about the story told by Lady Mary Brackenstall regarding the death of her step-father Sir Eustace Brackenstall. Holmes’ largest concern turns on the contents of three wine glasses, one of which contains beeswing and the other two do not. It turns out that Sir Eustace was killed by a companion of Lady Mary, which Holmes uncovers. However, Holmes has an adaptability for justice when the situation demands it, stating, “Once or twice in my career I feel that I have done more harm by my discovery of the criminal than ever he had done by his crime.” Satisfied the actions of the criminal and his accomplice (Lady Mary) were both warranted and just; Holmes does not report his findings to the local police. Klinger dryly noted, “his sympathies may have overridden his judgement: Many scholars believe that Holmes lets himself be fooled by a villainess clever than he credited.”

Today, I consider the Adventure of the Priory School.  In the story The Adventure of the Priory School, Watson meets a character, Reuben Hayes, who  believes to be the most “self-evident villain” he has ever seen. The tale revolves around the disappearance of a Duke’s son who is kidnapped by the Duke’s illegitimate son, James Wilder, who has in turn hired that most evil person Hayes to kidnap the lad. In pulling off the crime, Hayes had killed the lad’s tutor, one Heidegger, who had gone off in search of the boy. Holmes resolves the matter, while Hayes swings for his crime, the illegitimate son, Wilder is packed off to Australia. This story informs criminality and compliance. 

This week I return to one my favorite themes for every Chief Compliance Officer (CCO), compliance professional and compliance program: Sherlock Holmes. Over the next five days, I will be considering themes from the short stories to illustrate broader application to components of a best practices compliance program. I have used three primary resources in putting together this series: Maria Konnikova’s Mastermind(Konnikova); the online site shmoop.comand its blog post, The Return of Sherlock Holmes(shmoop); and finally the most seminal print work on the entire Holmes canon, the three-volume The New Annotated Sherlock Holmes(Klinger) edited with notes by Leslie S. Klinger. IN this episode, I consider the Adventure of the Red Circle and how it informs communication in a best practices compliance program.