By Roy Snell
roy.snell@corporatecompliance.org
The NY Times just reported that Rick Patino, University of Louisville, may be facing personal sanctions not because he committed a misdeed, but for “failure to adequately monitor McGee.”
Wells Fargo’s CEO just resigned after a compliance and ethics issue.
Penn State University leadership disappeared after a compliance issue, although none of them committed the offense in question.
I am pretty sure that a number of leaders whose jobs ended tumultuously were left wondering…. “Where the heck was my Chief Compliance Officer (CCO)?” The press, public, politicians, and prosecutors want leadership to be held accountable even if they didn’t commit the wrongdoing. The Department of Justice just issued the Yates memorandum which requires internal investigations on individuals to be to be turned over to the DOJ if the organization wants any chance of a smaller settlement. Some boards are going to be faced with a choice between millions of dollars vs. turning over one or more of their leaders.
Eventually, business leaders are going to start to figure out what is happening to their profession. They are going to wonder if their advisors will fail them. Many CEOs are going to look back and ask…
Was I involved enough in the CCO hiring process enough?
Did we pay enough to get the right person?
Do I have the CCO reporting to a person with a conflict of interest?
Will I get all the information when something bad happens?
Should the CCO be tied to my hip?
Could I prevent something from happening to me if I take CCO role more seriously?
I always believed that part of my job as a compliance officer was to prevent something bad from happening to my leadership. They paid me, in part, to not go down in flames like these other leaders are. I recall one situation that my boss and I dealt with. The conversation with leadership went something like this… “There is a problem, we are going in, we are going to fix it, it will be messy, we will meet with resistance, if there is an outside investigation before we are done they will ask people here if anyone in leadership blocked the effort to fix the problem, they will go after those leaders and we can’t have that. Ask whatever you want along the way, but don’t be deemed to have interfered.” It ended well for everyone. I bet there are a bunch of CEOs who now wish they had had that kind of support.
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