Compliance Best Practices: Effective Compliance Initiatives Driven by Commitment of Actions and Resources

By Steve Liccione — Director of Corporate Compliance for Johnson Controls

When an organization sets the proper “Tone at the Top,” it is often laudatory and occasionally inspiring. But, it does not necessarily prevent corporate misconduct. It may not even dissuade it. C-Suite occupants must resist the siren song of “Tone” that can lull them into a sense of complacency. The “Top” can be duped into believing that it has done its part by merely singing the appropriate compliance lyrics.

As with people, a company’s actions – rather than words – best reflect intent and commitment. An executive’s pledge to foster a “culture of compliance” is insufficient. There must be an enterprise-wide dedication of resources to the compliance function. This commitment need not be measured solely in hard dollars or dedicated compliance staffing. Rather, properly directed employee efforts may be more significant and yield better results than hiring troupes of lawyers and accountants.

Compliance in an Outsourced World

by Karen Wilson — Managing Partner, Citadel Compliance LLC

The recent massive accounting fraud at Indian outsourcing giant Satyam has focused attention on risks associated with outsourcing. The Satyam case offers multiple lessons for companies considering outsourcing. Risks are not limited to the financial wherewithal of the outsourcer. Because the outsourcer controls key business operations of the client and interfaces directly with the client’s customers, often from offshore sites, regulatory risks associated with these services can be magnified. This article examines trends in the outsourcing industry and changes in services and delivery models that have a direct impact on the client’s compliance with laws.

The outsourcing trend remained strong in 2008. At $360 billion annually and growing, outsourcing’s appeal is not limited by business type or size and thrives despite, or because of, challenging economic conditions.

American companies and government agencies historically have outsourced low-value operations to reduce expenses, realign resources, and shift risks. Businesses are drawn to the appeal of shifting so-called “non-core’ business operations to a third party who will improve the balance sheet and guarantee cost reductions and access to leading-edge technology and innovation. For some, outsourcing is the answer to poorly managed operations that sap resources and distract attention from the business. In outsourcing parlance, this is known as “your mess for less.” European companies have embraced outsourcing as well. In 2007, Europe outpaced the U.S. for the first time in the number of new IT outsourcing deals and that trend continued in 2008. Mergers between outsourcing competitors in 2008 should spawn better capabilities and stronger competition in the future. Major outsourcers and their specialties include:

The SEC Claws Back

by Dan Hurson, senior partner in The Hurson Law Firm LLP, in Washington, D.C. The case for strict enforcement of Sarbanes-Oxley Section 304 requiring CEO payback after restatements caused by “misconduct.”

Streamlining Control Assessments

By Ron Kral, Managing Director of Candela Solutions

Many organizations will be facing financial reporting control assessments and related external audit pressures for the very first time over the next two years. Yes, public companies have suffered millions of dollars in costs with limited benefits. Yes, there are regulatory inefficiencies and strained auditor relationships. Yes, I am talking about Section 404 of the Sarbanes-Oxley Act of 2002 (SOX). No, it does not have to be a wasteful exercise resulting in minimal benefits. This article identifies newer applicable organizations and the cornerstones to streamlining control assessment leading to cost-efficient and effective results.

Michael Oxley, Former House Chairman and Co-Sponsor of Sarbanes-Oxley, Elected Chairman of Ethics Resource Center

Michael Oxley, former House chairman and co-sponsor of the landmark bill Sarbanes-Oxley, has been elected as the chairman of the board of directors for the Ethics Resource Center (ERC).

Compliance Blog Roundup: Business Ethics, GM, Codes of Conduct, and the Costs of SOX

In this week’s Compliance Blog Roundup, we link out to posts on current issues in business ethics, the potential bankruptcy of GM, potential codes of conduct for proxy advisors, the costs of SOX, and an anlysis of SharePoint for compliance.

Compliance Blog Roundup: Sarbanes-Oxley Review and the Madoff-Stanford Connection

In the latest edition of the Compliance Blog Roundup from CCI, we go to Re: The Auditors to see their new look and a review of Sarbanes-Oxley, plus links to news and notes about the SEC, the Stanford-Madoff connection, performance evaluation, and cloud computing compliance.

Compliance News Headlines: 23 Recommendations to Revamp the SEC

In this week’s roundup of Compliance News Headlines from CCI: the U.S. Chamber of Commerce has issued 23 recommendations to revamp the SEC, a new survey shows teens have conflicting views on ethics in business, and a tenet of Sarbanes-Oxley is shot down.

Internal Audit and Risk Management: A Perfect Match?

Internal audit and risk management all all levels of business function, it would seem, are a perfect match. Beth Karlin recently wrote an article that describes the conditions that are freeing internal audit teams for enterprise-wide risk assessment.

Compliance Blog Roundup: Executive Compensation, Sarbanes-Oxley, and Corruption

In the first Compliance Blog Roundup on Corporate Compliance Insights, CCI directs its readers’ attention to blog posts on executive compensation, Sarbanes-Oxley, and why corruption rises during downturns in the economy.