The lengths to which a company goes to strengthen its compliance program in the face of a government investigation can make a big difference in the outcome—sometimes to the tune of tens of millions of dollars. Take the cases of two
AB last month paid more than $1 billion in fines for violating the Foreign Corrupt Practices Act, a U.S. antibribery law, prosecutors said it had enhanced its compliance program, but not quickly enough. The company was required to retain an independent monitor to oversee the implementation of the new program for a three-year period.
By contrast, Telia Co. AB in 2017 agreed to pay about $965 million for violating the FCPA after receiving a 25% discount off its fine and it wasn’t required to retain a monitor. Telia had engaged in extensive remedial measures, prosecutors said, including by creating a comprehensive anticorruption compliance program and overhauling its governance corporate structure.
was Telia’s chief compliance officer at the time. She drew on her experiences at the company for the “The Grey Zone: A Practical Guide to Corporate Conduct, Compliance and Business Ethics,” a book she co-wrote with
another former Telia compliance officer.
Ms. Ahlberg, who is now chief compliance officer of Swedish medical device company Getinge AB, spoke with Risk & Compliance Journal about her new book and lessons learned from Telia’s FCPA settlement. The transcript below has been edited for length and clarity.
WSJ: What is the “Grey Zone?”
Ahlberg: Business people, they want to go to the lawyers and they want to have a clear answer: Yes or no, can I do this? From a compliance point of view, we don’t answer yes or no—that is not our role. We give them a lot of information that makes the decision more gray than black or white. You have to learn how to navigate in this landscape, where you have different considerations, more stakeholders than you are used to having.
The book is really a description of how you work with compliance, but also why do you do it? Do you do it because you have to under the guidelines of the U.S. Foreign Corrupt Practices Act, or do you do it to create a better company and change, gradually, the way we do business, and management’s attitude to business?
WSJ: Do you think the U.S. Justice Department is sufficiently rewarding companies that do what they say Telia did, which is to extensively remediate? Are they valuing that enough when it comes to crediting companies in the resolution?
Ahlberg: It is extremely difficult for an external person to evaluate if a compliance program is actually effective. But if we can move the focus from what the ethics and compliance function is doing to what the business is doing—and how we measure the business—then I think it would be easier for the DOJ and [U.S. Securities and Exchange Commission] to evaluate if the program is actually effective. And maybe [then they will] have a bigger appetite to give a better discount.
If we could find measurements like risk [indicators] or ethics awareness among business leaders—where we could see how the business or the leaders are adjusting the way they do business—then it would be easier for an external person to say, “This company is changing.” And not just, “Oh, the ethics and compliance people seem to be working really hard.”
WSJ: What’s stopping us from doing that now?
Ahlberg: [Some executives] are blinded by forces that are more powerful and stronger than any force that I—or the FCPA, or the DOJ—can counteract. It is fear of not being part of the group, fear of not delivering the results that they have promised, fear of losing their jobs for being somebody who doesn’t agree with everybody else, fear of not making the numbers.
I believe the way we are measuring companies today is this huge force that blinds people from being good people. And we have to find a way to counter this.
WSJ: The Justice Department’s charging documents lay out in a couple sentences what Telia did to deserve the discount it got on its fine. What can you highlight, as someone who was involved in that, that would be useful to other companies?
Ahlberg: The U.S. lawyers representing Telia allowed me and [co-author Anna Romberg]—the people who actually represent the ethics and compliance functions—to do all the presentations about ethics and compliance ourselves. Which meant that everybody in the room could ask uncomfortable questions, which we really tried to answer honestly, which I think they believed.
We didn’t use smooth consultants who had fancy PowerPoint presentations and said the same thing about the company that they said about another company half a year ago. And I think that made a bit of an impression.
When you go in and negotiate, what is the most fundamental thing you have to think about? Not that you know the law in and out and back and forth and up and down. It is about creating a level of trust.
WSJ: A central theme of the book is the friction that a good compliance program creates. Why is it important for there to be friction?
Ahlberg: It is so important to recognize that friction is healthy. We have different opinions. We have different views. We have different roles. And we have different expectations of what we’re delivering to the company.
Especially here in the Nordics, people want consensus because that feels much more comfortable than leaving the meeting with a disagreement. But we have to learn. The business people who are responsible for making the decision—are paid to be responsible—they have to learn to make a decision based on information which is coming from different people and different viewpoints and who don’t necessarily agree.
But if things instead become personal, that creates friction that is very unhealthy.
WSJ: How do you prevent these things from becoming personal?
Ahlberg: It is difficult. One thing I’ve done is present myself as someone who is here to be difficult, somebody who is here not to give answers but to ask questions. And that [the company] will be irritated with me, but in the end they might actually like me because they will become better leaders and better business people long-term.
When we do training, we only do case-based dilemma trainings, where there are no clear right or wrong answers. It isn’t a test of who knows more; it is trying to teach and learn and practice discussion and different opinions.
We also try to do a lot of training around human behavior, behavioral economics, to talk about weaknesses that we all have. That we want to belong, and that it is difficult to speak up in a group, that we are all pressured by requirements, that the bonus systems in the company are working as a force or a power against ethical decisions.
WSJ: What’s the next step for compliance?
Ahlberg: We need to understand that culture is what we are looking at. But to build culture you need to create a conduct that is consistent over and over and over again.
The role of ethics and compliance is to use the elements of compliance—risk assessments, etc.—to persuade business people and the business to act in a way that creates a good culture.
We have to be like behavioral scientists. We have to understand how people function.
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