Compliance as a Marketing Advantage
What’s the value of a robust ethics and compliance program? Michael Volkov suggests looking at compliance from a different perspective. An organization committed to integrity in all of its operations is trustworthy – both to its partners and to its clients or consumers. Therefore, a strong E&C program is a real marketing advantage.
This article was republished with permission from Michael Volkov’s blog, Corruption, Crime & Compliance.
My good friend and colleague Dan Chapman, now the CCO at VimpelCom, is a compliance rock star. I have known Dan for years, beginning when he took over at Parker Drilling and implemented a world-class remediation program to pull Parker Drilling through a difficult FCPA problem.
Dan is now heading the effort to remediate and “fix” VimpelCom after the FCPA enforcement action announced last year. If there is anyone who can accomplish this task, Dan is the one.
In any event, in a conference at which Dan and I spoke together on a panel, Dan explained that a chief compliance officer has to look for “win-win” results where compliance and business interests share a success that advances both goals – compliance and business. Dan’s words of wisdom are particularly apt today.
Compliance has become a basic requirement in all business commerce. What do I mean?
In almost every significant business transaction – a bank loan, convertible debt, acquisition of equity or assets – company lawyers are demanding that each participant demonstrate and provide proof of their respective compliance programs. My translation of this requirement is simple – compliance has become an important currency in the business transaction marketplace.
For example, a joint venture consisting of five distinct partners is seeking a bank loan. Before the bank proceeds with the loan, the bank requests that each company provide documentation of its ethics and compliance program. The bank considers such an inquiry as an important issue to review because it influences the company’s ability to repay a loan. That makes sense.
This demand for ethics and compliance reaches into the global marketplace. Companies want to do business with other companies that are committed to ethics and compliance. Companies do not want to deal with shady companies that may be suffering from a range of unethical conduct or legal risks.
Recognizing this context, compliance officers have an incredible opportunity to “sell” or “promote” the virtues of compliance to the sales staff. Specifically, compliance officers can help educate sales staff on the value of a compliance program, the elements of an effective compliance program, documents they can use to promote compliance and an overall message about their company – the company is committed to trust and integrity throughout all of its operations.
Turning compliance into a sales advantage is a “win-win” because it provides tangible and substantive advantage to the sales and compliance missions for both compliance officers and sales staff. For customers, the company’s message is powerful: you never have to worry about misconduct, bad headlines or publicity when conducting business. Moreover, the message of trust and integrity provides an important reassurance on overall business trust – a company committed to trust and integrity is less likely to engage in fraud, delay in invoice payments or unscrupulous business dealings. In other words, the trust factor is an important competitive benefit. In a close competitive match, a government agency or a company may award significant credit to a company that has a robust and/or mature ethics and compliance program.Corporate Compliance Insights is a wholly owned subsidiary of Conselium Executive Search, the global leader in compliance search.