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Baseball informs your compliance program

Tom Fox | October 27, 2017

The Man From FCPA thought all his sports desires had been fulfilled as he had seen his hometown team play in a World Series back in 2005. It turns out that winning a World Series, however, is now something back on the list as the Houston Astros are in the 2017 World Series. Moreover, it turns out that baseball has multiple lessons for the compliance professional.  

One of the things which intrigues me has been the steady rise of Astros star Jose Altuve, usually referred to as the shortest baseball player in the big leagues. Hopefully soon it will be simply one of the best players in baseball. Altuve has retooled his swing and approach to become a much more rounded hitter. In addition to leading the league in batting again this year, he had one thirty-day period where he hit over .500 (June 27-July 27). A rare feat accomplished in baseball.  Yet his power numbers have increased dramatically from his 2014 when he won his first of three batting titles (hitting .347) when he only had seven home runs. Over the past two years he had increased his home runs to 24 each season.

Just as Jose Altuve retooled his swing to become the best hitter in baseball, a company can retool its compliance program through the risk management process; consisting of forecasting, risk assessment, and risk management to retool the focus of your compliance program. By starting with forecasting, a compliance function utilizes risk assessment to consider issues which forecasting did not predict for or issues which the forecasting model raised as a potential outcome which warranted a deeper dive. If you are moving into a new product or sales area and are required to use third-party sales agents, a risk assessment would provide information that a company could use to ameliorate the risks. From there use risk-based monitoring to look at things on an ongoing basis, risk-based monitoring models, which are continuously refined based on incoming data.

The Astros seem to have put all of this to use, at least up until the two games of the World Series. With the Series returning to Houston for games three, four and five; we can only hope the Astros continue to put all these tools to use. Go Astros!