Well, the Compliance Week 2011 annual conference is now fading into memory. The event was outstanding, a gathering of nearly 500 people who spanned the whole range of the corporate compliance community today, from in-house counsels and internal auditors to outside advisers and government regulators. Our agenda covered dozens of topics, and you can see coverage of many of them in our newsletter and our upcoming July print magazine.
Usually in my column immediately after the conference I recap a few observations or lessons learned that surprised me. This year I can boil that lesson down to one telling insight, that sprang to mind thanks to two particular moments that happened during the conference: the superb keynote address given by U.S. Attorney Preet Bharara on Tuesday morning, and an outburst later that day from our first-ever Compliance Week protester.
First, Bharara. He is the U.S. attorney for the Southern District of New York, which encompasses New York City and its surrounding area. The financial crisis alone has given his office plenty to investigate on Wall Street, and he has much else on his plate as well: other corporate misconduct, terrorism, and gang and drug crime, to name a few. This is a person who has seen many, many companies make an effort at passably good corporate conduct—and seen them not measure up.
The true challenge, Bharara said, isn't to perfect a system of internal controls, or compliance matrices, or “dashboard” software that neatly summarizes your risks. Those are all useful tools, but the core of a successful compliance program still rests with the tone set by the senior executives. His words are worth quoting at length:
“Profound personal integrity, repeatedly demonstrated and openly valued, is absolutely critical … The best-conceived compliance programs and practices and policies in the world will be too weak to stave off scandal if the core principles are not internalized, if there is not from the top a daily drumbeat for integrity.”
They say the average person needs to hear something seven times before it sticks in his memory. Bharara took that idea to its logical extreme, warning that companies and their senior leaders must preach the gospel of good conduct day after day—even when the audience should already know the lesson, even when people aren't listening, even when preaching that message isn't fun or exciting. This is the job we've chosen, and it's not easy.
That all came into sharp relief for me on Tuesday afternoon, when a protester crashed the Compliance Week conference.
The facts are these: On Tuesday afternoon just after lunch, we held a panel session on anti-corruption programs. One of the speakers was Haydee Olinger, the chief compliance officer at McDonald's. All the speakers had just introduced themselves and the moderator was about to ask his first question, when a young woman in the front row of the audience stood up and began shouting a statement about allegedly inhumane practices McDonald's uses to care for the chickens that go into its food.
Olinger handled the protestor's outburst with nothing but class and poise. While others in the audience (more than 100 people) booed, Olinger calmly sat there and encouraged the crowd to let the woman give her statement. The moderator, meanwhile, escorted the protestor from the room and presented her to hotel security, who ejected her from the building. Then Olinger and the others continued their otherwise excellent discussion of anti-bribery programs as if nothing had happened.
This disruption left me furious for two reasons: first, of course, because of the disruption to my event; but also because this protestor decided to air her grievances with McDonald's by hectoring the chief compliance officer. If anyone at all in McDonald's vast operations would want to hear about supposed misconduct, it would be Olinger—and here was some activist apparently with little understanding of what an ethics and compliance function actually does, simply wanting to make a dramatic statement, and using Olinger and my conference to do so in an irritating, clumsy way.
In truth, however, this protester's rude behavior reflects the challenge Bharara spoke about: the daily chores of encouraging good conduct and of encouraging people to speak up. If you take Bharara's message to heart (and we all should), then these are the obstacles compliance officers will encounter: people who don't get it, people who don't listen, people who like to be angry about corporate power but don't understand that the compliance officer is on their side. I often wonder how compliance officers find the patience to do it. But I'm glad you do—because this work, as frustrating as it can be, is important.