For those in the FCPA world I would like to focus on one aspect of the court’s ruling: consistency in discipline. In Brady’s appeal, the court was highly critical of the fact that the NFL policy for discipline for first offenses involving equipment violations would result in fines rather than suspensions. Further in all previous discipline involving “equipment violations results in a fine of $5,512.” The NFL suspended Brady for four games with an attendant loss of salary at approximately $1 million.
Under any FCPA compliance program, discipline must not only be administered fairly; it must be administered uniformly across the company for the violation of any compliance policy. Simply put, if you are going to fire employees in South America for lying on their expense reports, you have to fire them in North America for the same offense. It cannot matter that the North American employee is a friend of yours, or worse yet a “high producer.” Failure to administer discipline uniformly will destroy any vestige of credibility that you may have developed.
In addition to discipline, which may be administered after the completion of any compliance investigation, you must also place compliance firmly as a part of ongoing employee evaluations and promotions. If your company is seen to advance and reward only employees who achieve their numbers by whatever means necessary, other employees will take note and it will be understood what management evaluates, and rewards, employees upon.
I have often heard the (anecdotal) tale about some Far East Region Manager, which goes along the lines of, “If I violated the Code of Conduct I may or may not get caught. If I get caught I may or may not be disciplined. If I miss my numbers for two quarters, I will be fired.” If this is what other employees believe about how they are evaluated and the basis for promotion, you have lost the compliance battle.