Compliance is not a Cartoon!

If you practice in the compliance space, you may have seen many cartoons lately trying to explain what compliance actually is, and what it is not.

Interestingly enough, compliance is used in the business world, often as part of compulsory training, to demonstrate an appropriate compliance culture and program as a defense to any potential misconduct allegations.

As legal professionals, we are very much worried about this trend to simply be reactionary and not proactive.  Compliance needs 2 key ingredients to work properly: (1) legal and; (2) technical.  Although cartoons don’t always explain it clearly, compliance is the legal aspect of being compliant with the law, plus the technical requirements of each industry.

It is very common to have compliance teams whose background is very diverse since organizations need to demonstrate, by the technical viewpoint, their compliance.

Examples of technical compliance are endless, but a few of these are:

  1. Construction companies need to demonstrate a strong commitment to job and worker safety;
  2. The automotive industry has to be responsive to environmental laws (see Volkswagen) as well as safety ones;
  3. IT businesses have to take care with the way they encrypt users’ data.

These are only a few examples, since most companies nowadays operate in highly regulated environments, and have to develop their own specific technical compliance areas.

In doing so, companies use lawyers who are meant to put everything together, and more and more often, they are working alongside their co-workers and clients who have come from technical backgrounds.

Conversely, non-compliance may also lead to several predicated offenses, apart from simply putting lives in danger.  In the financial crime field, there are several other offenses businesses may infringe upon, including: corruption, money laundering, and tax evasion, just to name a few.

Needless to say, these types of transactions cannot be lawfully integrated into financial statements, so there are also likely false accounting representations.  These can result in 20 year sentences!

In light of the aforementioned, as a business leader you have two choices: (1) setting a proper compliance program, which may protect your organization’s reputation or; (2) just follow the easiest way and suffer the consequences!

Given the potential consequences we have outlined above, would you show a cartoon to a Prosecutor seeking to see proof of your compliance program and commitment?

compliance is not a cartoon

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