Tone at the Very Top, DOJ-Style

As compliance professionals and leadership counselors, we focus on “tone at the top.” What the C-Suite says is critical to establishing an ethical culture in an organization. What is even more important to foster that culture is whether top executives speak and act consistently. We advise our leaders that even one act of apparent hypocrisy, or of “looking the other way,” can undo a lot of cover-letters-with-Codes-of-Conduct.

With this perspective, I commend to you two recent blog posts by fellow compliance lawyers, about the tone coming from the very top, compliance wise: the Department of Justice.

One is Mike Scher’s post this week in the FCPA Blog about the DOJ’s findings that downplay the alleged corruption violations by WalMart in Mexico.

The other is  Michael Volkov‘s comment on the outcome of the DOJ’s investigation at General Motors, first published in September but recirculated through LinkedIn this week.

Screen Shot 2015-10-24 at 10.26.38 AMAt the SCCE’s annual Compliance and Ethics Institute earlier this month, I perceived a consensus of approval among the compliance community for the DOJ’s September 9th “Yates Memo,” in which Deputy Attorney General Sally Quillan Yates sought to send a strong message that the DOJ would henceforth be eager to prosecute culpable individuals for wrong-doing within the corporations they lead. There were many concerns (see this and this), yet the general thought seemed to be that the tone set by the Yates Memo would reinforce our efforts to get buy-in within our companies.

But Mike Volkov raises this concern: with the GM case (as now with WalMart), do the DOJ’s actions speak louder, tone-wise, than Yates’ words?



3 Responses

  1. Another thing Mike has said, though, about the DOJ is that the DOJ will tell you what they are going to do, and then by golly they will do it. So now they have told us.

    1. Excellent point, Scott. Executives and companies who ignore the Yates Memo do so at their peril.

      After all, the DOJ is under some kinds of tone-setting constraints that CEO’s (as masters-of-their-fate) are not. For example, if the DOJ cannot compile sufficient evidence to bring a criminal charge and prosecute, well then, it can’t prosecute, whether its leadership likes the tone that sets or not. In terms of the rule of law, that’s a good thing. The bottom line, as you note, is still that DAG Yates has told us the DOJ is eager to prosecute individuals.

      But whatever the reason for the DOJ’s actions re GM and WalMart, Messrs. Scher and Volkov seem to regret the inconsistent tone those actions set, and I see their point. An analogy may be this: just as within a company, nothing cements the import of anti-retaliation training like the public firing of a retaliator… nothing will drive home the impact of the Yates Memo to C-Suites like the prosecution of more execs. So to your point, the DOJ must now be itching to do just that. And that is a risk of which we must make our clients aware.

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