compliance as a business advantage

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.


Michael Volkov

Michael Volkov

Michael-Volkov-leclairryanMichael Volkov is the CEO of The Volkov Law Group LLC, where he provides compliance, internal investigation and white collar defense services.  He can be reached at mvolkov@volkovlaw.com.  His practice focuses on white collar defense, corporate compliance, internal investigations, and regulatory enforcement matters. He is a former federal prosecutor with almost 30 years of experience in a variety of government positions and private practice.

Michael maintains a well-known blog: Corruption Crime & Compliance which is frequently cited by anti-corruption professionals and professionals in the compliance industry.Michael has extensive experience representing clients on matters involving the Foreign Corrupt Practices Act, the UK Bribery Act, money laundering, Office of Foreign Asset Control (OFAC), export controls, sanctions and International Traffic in Arms, False Claims Act, Congressional investigations, online gambling and regulatory enforcement issues.

Michael has assisted clients with design and implementation of compliance programs to reduce risk and respond to global and US enforcement programs.

Michael has built a strong reputation for his practical and comprehensive compliance strategies.Michael served for more than 17 years as a federal prosecutor in the U.S. Attorney’s Office in the District of Columbia; for 5 years as the Chief Crime and Terrorism Counsel for the Senate Judiciary Committee, and Chief Crime, Terrorism and Homeland Security Counsel for the Senate and House Judiciary Committees; and as a Trial Attorney in the Antitrust Division of the U.S. Department of Justice.

Michael also has extensive trial experience and has been lead attorney in more than 75 jury trials, including some lasting more than six months. His clients have included corporations, officers, directors and professionals in, internal investigations and criminal and civil trials. He has handled a number of high-profile criminal cases involving a wide‐range of issues, including the FCPA and compliance matters, environmental crimes, and antitrust cartel investigations in countries all around the world.

Representative Engagements

  • Successfully represented three officers of a multinational company in two separate criminal antitrust investigations involving a criminal antitrust investigation in the District of Columbia and the Southern District of New York.
  • Defended pharmaceutical company before the Food and Drug Administration and Senate Finance Committee relating to application for approval of generic drug.
  • Conducted internal investigation which exonerated company against allegations of false statements in submissions to the FDA and against improper conduct alleged by Senate Finance Committee.
  • Represented company before the US State Department on alleged violations of ITAR which lead to voluntary disclosure and imposition of no civil or criminal penalties.
  • Advised several multinational companies on compliance with anti‐corruption laws, and design and implementation of anti‐corruption and anti‐money laundering compliance programs.
  • Advised hospitals, pharmaceutical companies and medical device companies on compliance issues relating to Stark law and Anti‐Kickback law and regulations.
  • Conducted due diligence investigations for large multinational companies for anti‐corruption compliance of: potential third party agents, joint venture partners and acquisition targets in Europe, Africa, Asia and Latin America.
  • Represented individual in white collar fraud case in Alexandria, Virginia and secured dismissal of criminal charges and expungement of criminal record.
  • Represented company before Congress and Executive Branch in effort to modify Justice Department regulations concerning use of federal funds.
  • Advised and assisted World Bank in review of global corruption policies, enforcement programs and corruption investigations and prosecutions.

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