​Earlier this week, the USMC announced the successful completion of the Infantry Officers Course (IOC) by a woman Marine officer.  As has been the case for many years, with respect to race, gender, and other metrics, the military is at the leading edge in incorporating and integrating cultural change.  For example, wage equity is firmly in place for all members, irrespective of their race and/or gender.   

Recently I was privileged to address the Marine Corps Reserve Association (MCRA) in New Orleans at their annual convention.  My presentation focused on cultural trends, recent events, the ethical considerations to these trends and events and courses of actions available to Marine leaders in the 21st century. 

​Along with the comments of the first paragraph, the follow on questions, comments, and discussion at the convention struck a chord and upon review, it became clear that cultural trends, ethics and actions by leaders and managers across all business enterprises would be in many respects the same or similar as that for Marine leaders.  

In earlier postings, I have noted that sometimes ethics and compliance can be contradictory in the real world.  Recently, I was watching one of the “news” channels where a discussion of the ineffectual broken windows theory in NYC clearly demonstrated by the recent “blue flu” with respect to reduced citations. 

These experts went onto state the obvious conclusion that since the crime rate in 2015 was lower than it was in 1994 when the broken windows theory was initially applied in the city.

The broken windows theory states that maintaining and monitoring urban environments to prevent small crimes such as vandalism, public drinking, and other similar violations create an atmosphere of order and lawfulness, thereby preventing more serious crimes from happening. 

Rather than get into a discussion of criminological theory about the pros and cons of slicing and dicing crime data, extrapolations about community and racist policing, and what are the norms in particular communities, I would like to simply discuss the ethics and compliance aspects of broken windows.

First the ethics, is vandalism ethical behavior?  Is public drinking ethical behavior? Is toll jumping ethical behavior?  As they said in high school prior to the 1960s; the solution is left up to the student.

Now the compliance, are there laws prohibiting vandalism?  Are there ordinances and regulations prohibiting publications?  Is toll jumping a form of theft?

Maybe, in the case of the broken window theory, ethics and compliance are not contradictory. 

For New Yorkers, it is a simple decision, Mayors like Giuliani, deBlasio, or perhaps ultimately Snake Plissken.

Still looking for that good news story; maybe we are at an inflection point?

http://www.fcpablog.com/blog/2014/11/14/violinist-banned-from-ski-races-for-olympic-cheating.html

I have been watching the elections and current events the past few months and coupling that with some writers block and the hope that we would experience some positive change in the ethics world have been off line. 

Have not observed much in the media that would indicate real change, yet hope springs eternal.  

In the past 48 hours, I have come across four items to consider and they are posted here without comment.

1.        http://www.citizen.org/documents/OCE_Briefer.pdf   (Note page 9 and consider five members departed the Congress this voting cycle with active ethics reviews not completed.)

2.       http://www.forbes.com/sites/theapothecary/2014/11/10/aca-architect-the-stupidity-of-the-american-voter-led-us-to-hide-obamacares-tax-hikes-and-subsidies-from-the-public/

3.       http://www.dailymail.co.uk/news/article-2831503/Eminem-provokes-outrage-dropping-dozen-f-bombs-Veteran-s-Day-concert.html

http://www.ijreview.com/2014/11/201364-6-reaction-swift-kim-kardashian-using-assets-break-internet-sell-magazine-youve-never-heard/?utm_source=dailynewsletter&utm_medium=email&utm_campaign=%7BCAMPAIGN_ID%7D&listID=%7BlistID%7D

Some vital information from an industry colleague.

The Ten Commandments of Doing Business with the Federal Government

1.  Thou Shalt Have No Other Deadlines Before Mine

     If you want to win a government contract, bear in mind that the rule says the work will go to the lowest responsible, responsive bidder.  In reality, at the initial receipt stage, your bid will not even be considered, no matter how good you are, unless you meet the deadline for bid submissions. 

2.  Do Not Take Appeal Rights In Vain

     There are a number of alternate rights you can exercise if you are not awarded the contract.  They can be expensive, and should not be resorted to unless you have a good-faith belief that you were legally entitled to the contract.  On the other hand, seeking a de-brief to learn where your bid fell short can serve to demonstrate good faith on your part, and stand you in good stead on future bids.

3.  Thou Shalt Not Commit Partnering With Partners Who Are Disqualified

      The U.S. Government maintains a list of contractors, AND subcontractors, who are suspended or debarred from doing business with the federal government.  You cannot include such an entity in your business arrangements on a government contract . . . and bear in mind, the burden is on you to ensure that such a subcontractor has not merely changed its corporate name to avoid being precluded.

4.  Honor the Government Contracting Officer

      With few exceptions, the Contracting Officer ("the K.O.") is your point of reference as you perform your work.  So, do not expect the government to honor work modifications / agreements to pay you more, which you negotiated with someone other than the KO, even when that person is senior to the KO in the chain of command.   

5.  Do Not Bear False Witness . . . and Do Not Commingle

      You are entitled to be paid what you contracted for, on each government contract you have, separate and distinct from any other contract.  You may not charge work on one contract which is actually being performed under another agreement, even if this seems "fair" to you because of unforeseen difficulties.

6.  Beware of Giving Gifts

      Notwithstanding what may be acceptable practice in your industry, the Government has very specific and very firm prohibitions against most gifts from government contractors to government employees.  Although far short of the obvious ban on bribery, these rules can be a minefield for any government contractor who fails to learn and obey them.  This can include political contributions by certain contractors, in many States as well as at the Federal level.

7.  The Government Is a Demanding Client and Will Deal Harshly with Those Who Violate the Rules . . . but Can Show Mercy for Those Who Deserve It

     Volumes have been written about the Federal Sentencing Guidelines.  The underlying philosophy is that those who cheat / mislead / engage in fraud will be made to pay severe penalties.  Therefore, it is vital to understand how to structure your actions when you become aware that your organization / employees have put you at risk so that you can secure a "downward departure" from the guidelines and receive lenient treatment.

8.  Honor Your Responsibilities as the Ethical Leader of Your Organization

     In today's world of Sarbanes-Oxley, Dodd-Frank, the FCPA, the spotlight is on YOU, and cannot be shunted off to subordinates.  You need sufficiently empowered people to help you promote ethical practices in your organization, but the buck stops with you.

9     . . . and speaking of bucks, Professional Liability Insurance is advisable for you and other top management officials, including members of your Board.

10.   Don't Walk Through the Valley Alone

        Industry Associations, your legal counsel, your auditors, and professional Ethics and Compliance experts can help you navigate the best way to get, and keep, government contracts.

Arnold Haiman, Certified Compliance and Ethics Professional, Ethos LL.C

Readers may recall a posting in December on the BP oil spill in the Gulf of Mexico where ethical behavior and compliant behavior were on the opposite ends of the spectrum.  The posting below sets a new (low) standard for ethical and compliant behavior pisparity. 

I am sure the readers would like a similar standard to apply in their tax submissions to the IRS.  As a taxpayer myself, I must say I am speechless on this matter other than to say, “Be sure to read this one all the way to the last sentence.”

The Wall Street Journal Online

John D. McKinnon

22 April 2014 20:53 GMT

394 words

English

Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved.

More than 2,800 Internal Revenue Service employees who recently had been disciplined received performance bonuses totaling more than $2.8 million between Oct. 1, 2010, and Dec. 31, 2012, a government audit found.

The misconduct ranged from failure to pay taxes to misuse of government travel cards, violation of official-conduct standards and fraud, according to the report by the Treasury Inspector General for Tax Administration. The discipline included written reprimands, suspensions and even removal. The oversight agency said some of the conduct issues might have occurred after an employee earned a bonus.

While the IRS doesn't prohibit bonuses, "providing awards to employees with conduct issues, especially the failure to pay taxes owed to the federal government, appears to be in conflict with the IRS's charge of ensuring the integrity of the system of tax administration," the report said. (See the report.)

For fiscal 2012, the IRS gave bonuses to about two-thirds of its 98,000 employees. Some lawmakers have been critical of the practice.

The report identified nearly 1,200 employees with tax issues or official-conduct violations during the period who received a total of $1.1 million in monetary bonuses, and about 11,000 hours of time off. One employee who was suspended for 10 days in September 2011 received a $1,300 performance award in August 2012, the report said.

The IRS generally doesn't consider conduct issues when administering bonuses, officials told the watchdog office.

For employees represented by the IRS union, the contract specifically states that disciplinary investigations or actions generally won't preclude a performance bonus.

The IRS does withhold performance bonuses in some high-profile circumstances. For instance, officials denied awards to the division involved in the targeting of grass-roots conservative groups, the report noted.

IRS officials said the agency developed links conduct to bonuses for executives, and is considering a similar policy for the entire IRS workforce.

In a statement Tuesday, the agency noted that the watchdog didn't find any violations of federal regulations.

"The IRS takes seriously our unique role as the nation's tax administrator," the agency said. "We strive to protect the integrity of the tax system, and we recognize the need for proper personnel policies."

A little change of pace for this posting. 

Typically I try to stay focused on ethics and the programmatic associated with an effective ethics program for the business enterprise.  However, the other day I was listening to a sports radio talk channel on the way to work.  The talking head was discussing an event at the White House where Boston Red Sox David Ortiz took the opportunity to take a “selfie” with the President   The talking head took exception with this act.  His comment was that even one of the baseball’s good guys had stepped outside the box by abusing the executive office for his own benefit. 

Not only did this seem a pretty weak defense for poor social behavior and conduct, it brought back memories of the big victory celebration parade earlier in the year where David Ortiz got on the national stage and declared to terrorists around the world that “Boston was our F***ing city”.

https://www.youtube.com/watch?v=u6JDF1Prrqk

Earlier in the week, I had the distinct honor and privilege of introducing SFC Sammy Lee Davis, recipient of the Congressional Medal of Honor to a small group of citizens gathered to kick off a civic event for MOH recipients later this year.  Mr. Davis made a short comment after the group viewed a video recount of his exploits saving the lives of several of his fellow soldiers, his “brothers.  

https://www.youtube.com/watch?v=aOWBw7muH9M

In his comments, Mr. Davis called no attention to himself but in soft understated phrases and words, it became clear that Mr. Davis is one of humanity’s good guys.

If baseball is looking for good guys, perhaps it needs more Mr. Davises and fewer Mr. Ortizes.  I know effective ethics programs for successful enterprises do.

As previously noted, an open line service, an independently-operated-one, provides access to all employees to make reports in multiple languages, anonymously, ensuring no retaliation to the reporting employee.   This service should be augmented by a companywide poster program that highlights contact points for the service.

In addition to internal and external audit assessments, ethics and compliance should be integral parts of the overall business risk assessments provided by insurance providers on a regular basis.  Additionally, internal assessments maybe conducted in focus groups where small groups of employees are convened in a facilitator format to discuss current and potential ethics and compliance issues.  Comprehensive surveys should be developed and analyzed by professionals to determine the effectiveness of the program.

Ethics teams must have a broad base with the direct supervisor identified as the key member for all employees.  Additionally, key personnel should be identified as ethics technical experts to assist in administration of the program.  Basically, the ethics experts provide technical information to those who are not comfortable discussing potential and actual issues with their supervisor.  The Human Resources office is also in the process of incorporating Ethics metrics into the annual performance review procedure.  

Communication is an essential ingredient in the program, and will be a hallmark of success for the program.  Not only does the successful program include multiple vehicles of administering critical organizational information, but repetition of this consistent message must be completed.  More importantly, the management—from the board of directors, senior management, and the operational day-to-day supervisors is necessary for comprehensive ethics and compliance performance.  The message is not only repeated and consistent, but is simple and is reinforced with a disciplinary action process that holds each level of the organization accountable.  Senior managers are held to an even higher standard, not only due to their positions, but also due to the more extensive training requirement within the ethics program.

The Corporate Ethics and Compliance Officer (CECO) reports formally to the President and CEO (the boss), has direct access to them and provides a written and briefed reports on a quarterly basis.  The program must also, at minimum, an annual internal audit by the corporate quality function, and ideally an external audit on a recurrent basis. 

The Code of Conduct should contain two major components: ethics rules and code compliance procedures.

The complete administrative process for the company is detailed in a series of ethics and compliance procedures or work instructions that provide the user a step-by-step walk through of any aspect of the program.  The process covers everything from initiating a report and report resolution to training, awards, and audit of the overall program.

What are the characteristics of a functional and useful Ethics and Compliance Program? 

Typical ethics and compliance programs are created a response to a serious event or the anticipation of a future legal or other business requirement. 

The Ethics program must have wide stakeholder acceptance and must be designed with the end users in mind.  The Chairman and the CEO (the boss) must take ownership and set the tone for a strong and driven plan for program implementation.  The Code of Business Ethics and Conduct must be a senior company document and augment corporate vision and mission and core values statements and become the focal point of company operations.  Additionally, the policies, procedures, tools, and work instructions were revamped to reflect ethics and compliance as a key aspect of the company culture.

The ethics program roll-out must be comprehensive and permeate every level of the organization. It originated from a committed senior management team (the boss), and the existence and applicability of the program was repeatedly communicated to ensure wide dissemination and acceptance.  The training on the base ethics program components must be administered to all employees upon hire and be reinforced on a recurrent basis with multiple follow-on and more detailed training modules.  These modules are both delivered in person and are also available in electronic distance learning formats.  These training modules benefit from a continuous process which includes testing, surveys, and focus groups addressing topical issues from the field and through the anonymous independent ethics violation reporting service.

Training has been administered in a wide array of media, programs, and includes both outside experts in addition to formally trained internal compliance and ethics professionals.  Formal training modules must be constructed and administered for all hands, for supervisors, weapons carrying employee/contractors, purchasing agents, senior management team members, the board of directors, and for other specific audiences.   Training modules should have standardized exams to confirm successful completion of the training.  Initial training should also augmented by annual maintenance   syllabi with test requirements for all hands.  There should also a special annual refresher training module for those who have duties that require FCPA or other specific requirements.