The Sound of Compliance

There are always two sounds of compliance. The first is SILENCE. The second one is NOISE.

We are usually working quietly, ensuring that all regulations and rules are met by organization. We are doing a hard job to keep business out of trouble, financial losses, reputational harm or … ever securing our colleagues from jail. It is a Silence Sound of compliance.

From time to time something may go wrong. Then we are in action. Then it is a Noise Sound of compliance.

There is one simple rule. When Compliance is invisible in organization all is fine and business is in a good shape. Once Compliance needs to interfere and intervene into the daily business, it is a signal that something went wrong. 

Prevention is the key to success. This is why we spend so much time on education, providing trainings, writing procedures, sharing knowledge. If you think that you are not being listened enough and your work is not valued by management, don’t stop! Show them how effective you are by using examples of companies who were not, and how much money they lost.

Prevention is better, even if organization needs to invest for many years… without hearing that much about compliance. This is actually what every management desire. Nobody wants to make and pay for mistakes.

What all of these famous brands have in common? 

They all paid a lot for non-compliance.

This list is just a shortcut, there is much longer and maybe your company is already on it. This is  a choice for management and yourself if you want to keep away from the list or how far you want to risk?

Examples of non- compliance and fees:

British Airways: Fined $300 million by DoJ for colluding on fuel surcharges on top of a £120 million fine imposed by UK Competition Authorities (2007)

Lloyds Bank: Fined $350 million for sanctions violating by colluding with clients to transfer funds to Libya, Sudan and Iran (2009).

Carrefour: Fined €27.4 million for fixing price of toys by French Competition Authority (2007).

LIDL: Fined by German Data Protection Authorities for illegally tracking employees’ medical conditions.

Volkswagen: Bribery of Union officials.

Chiquita: Fined $25 million for paying protection money to terrorist groups in Colombia (2007).

DHL: Fined $9.4 million for violating US sanctions laws (Iran, Syria and Sudan (2009)).

Johnson & Johnson: Civil penalties of $4.75 million for false or misleading statements to doctors about its products (2009).

Wal-Mart: Fined for child labor violations; teenagers to operate hazardous equipment; e.g. fork lift trucks (2005).

And... Wal-Mart has so far incurred expenses of approximately $147 million dealing with the investigation of an alleged Mexican Bribery case –without counting management lost time

Coca-Cola: “Channel stuffing” to pull sales forward into a current period (2005) – SEC investigation and civil law suit.

Boeing: $600 million fine for trade secrets allegation and hiring a senior air force procurement official while she was awarding government contracts worth billions of dollars to Boeing (2006).

Intel: Fined $1.45 billion for abuse of a dominant position (2009).

Deutsche Bank: Allegations DB violated privacy laws when it used private investigators on “dissident” shareholder (2009).

Microsoft: Fined $1.35 billion by EU for failing to comply with an earlier order relating to licensing (2008).

Novartis:  (2010) A Novartis pharmaceuticals unit was ordered to pay a group of 5,600 female employees punitive damages of $250 million, the largest-ever employment discrimination verdict (Bloomberg).

Daimler: (2010) Fined $185 Million For Bribery Further, Daimler was accused of violating the terms of the United Nations’ Oil for Food Program with Iraq by including kickbacks 10 percent of the contract values to the Iraqi government.