Compliance Culture

Practical insights for compliance and ethics professionals and commentary on the intersection of compliance and culture.

Corporate takedowns: Gawker

This is the final entry in a series of four posts about corporate takedowns.  The first post was about American Apparel.  The second post was about Theranos.  Last week’s post was about the Facebook and Cambridge Analytica data sharing scandal.  Today’s post will discuss Gawker.

Gawker was a blog website focused on New York City celebrity and media news and gossip.  It was launched in 2002 and was a popular source of often controversial content about famous people and prominent organizations.  Gawker faced first public scrutiny and later legal battles about posting videos, e-mails, and other private information that was suspected to have been improperly obtained or in violation of confidentiality or copyright interests.  In 2016, the end of a protracted legal battle over one such posting led to a $140 million legal judgment against Gawker and the company’s resulting bankruptcy.

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Corporate takedowns: Facebook and Cambridge Analytica

This is the third in a series of four posts about corporate takedowns.  The first post was about American Apparel.  Last week’s post was about Theranos.  Today’s post is about Facebook, focused on the recent Cambridge Analytica data sharing revelations.  The fourth and final post, on April 24, will discuss Gawker.

For an in-depth discussion of general compliance issues with Facebook as an online platform, check out this post.

In March 2018, The New York Times and The Guardian published a series of investigative articles exposing a data breach between the social media platform Facebook and the UK political consulting firm Cambridge Analytica.  This has incited a firestorm of controversy around data sharing, privacy expectations, online community moderation practices, and ethical standards for consumer protections by companies holding their data.

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Corporate takedowns: Theranos

This is the second post in a series of four posts about corporate takedowns.  Last week’s post was about American Apparel.  Today’s post is about Theranos.  The third post on April 17 is about Facebook, focused on the recent Cambridge Analytica data sharing revelations.  The fourth and final post, on April 24, will discuss Gawker.

For an in-depth discussion of the corporate history and culture of Theranos, check out this post.

A variety of business ethics and cultural practices contributed to the failures at Theranos both as an enterprise and in fraudulent representations made by its founder and CEO, Elizabeth Holmes, to investors and the public.

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Corporate takedowns: American Apparel

This is the first post in a series of four posts about corporate takedowns.  Today’s post is about American Apparel.  Next Tuesday’s post is about Theranos.  The third post on April 17 is about Facebook, focused on the recent Cambridge Analytica data sharing revelations.  The fourth and final post, on April 24, will discuss Gawker.

American Apparel was once one of the largest apparel companies in North America.  Founded in 1989, at its peak in the early 2010s the company had over 250 locations.  It was widely-known for its provocative, attention-grabbing advertisements and trendy yet utilitarian clothing.

However, after several years of not operating profitably and dogged by controversy courted by its founder, Dov Charney, and his attendant legal troubles, American Apparel filed for bankruptcy in 2015 and in 2017 was sold to the Canadian apparel company Gildan Activewear.  While the company’s manufacturing operations and headquarters were once based in Los Angeles, American Apparel is now an online-only retailer and makes most of its clothing, which is still touted as ethically-produced, in international locations.

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Tension between innovation and regulation

Cutting-edge technology and competent supervision are often depicted as being at odds. Silicon Valley regards state and federal regulatory approaches with professional skepticism, reflecting the widespread sentiment that supervision is oppressive and stifling to creativity and design.  As the rationale goes, the ideas of futurists, technologists, designers, and engineers cannot develop freely amid the restrictions of legal and compliance controls.  By the same token, oversight attempts are presumed to be inadequately prepared for the task of keeping up with fast-paced technological advancements.

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Insights from management for compliance officers

This is the fourth and final in a series of four posts on insights for compliance officers from different fields of study.  The first post in this series covered lessons from psychology regarding, for example, self-interest and decision-making, from prominent figures such as Sheena Iyengar and Malcolm Gladwell.  The second post was about insights for compliance officers from self-development and coaching, including from people such as Wayne Dyer and Eckhart Tolle.  Last week’s post discussed behavioral economics, focusing on the work of people such as Dan Ariely and Richard Thaler.  Today’s post will suggest ways in which management theory can be applied to corporate compliance programs.

As a practice, compliance is greatly concerned with topics such as governance, controls, leadership, sustainability, business values, organizational integrity, risk controls, institutional decision-making, tone and conduct at the top, and corporate culture.  It shares these general disciplinary themes with management theory, which takes on the broad task of determining and guiding the strategic direction of an organization and steering its employees and resources in furtherance of these goals.  Given that the contributions of a robust compliance program to the regulatory, practical, and cultural aspects of this task are great, compliance officers stand to gain great insight from studying commentary from the field of management theory.

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Insights from self-development and coaching for compliance officers

This is the second in a series of four posts on insights for compliance officers from different fields of study.  Last week’s post was about lessons from psychology regarding motivation and choice, from prominent figures such as Abraham Maslow and Sheena Iyengar.  Today’s post will discuss insights from self-development and coaching.  Next Tuesday’s post will be about insights from behavioral economics.  Finally, on March 13, the last post in this series will discuss how business management theories can be useful for compliance officers.

Much like the insights from psychology discussed in last week’s post linked above, theory of self-development and coaching can be very useful for creating and cultivating a culture of compliance at both the individual and organizational levels.  Focusing on thoughtful growth and progress, inner success and ethical achievement, and a values-based, sustainable approach to strategy and mission are all necessary for fostering integrity in organizations and groups or people within them.  Motivational writings on paths to self-development and tips for effective coaching can translate easily to informing a compliance culture.

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Insights from psychology for compliance officers

An informed approach to business compliance can be improved by taking theoretical insights from different fields.  For example, a corporate culture which seeks to promote ethical leadership, or provide support for making choices from a basis of integrity, or encourage employee engagement with compliance values, should take lessons from a variety of sources to make relevant and relatable appeals.

Psychology in particular has many affinities with a profession that is focused on culture and values, both of organizations and of the individuals within them.  Study of psychology in search of insights relevant to compliance ethics can be used in creating our culture, informing our norms, and helping us to develop and articulate our values.  All of these insights are necessary for cultivating a compliance culture and professionals in the compliance and ethics function have to be the first ambassadors for this.  To do this effectively, psychology can provide important guidance.

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Ethical leadership in the Eagles’ Super Bowl LII victory

When the Eagles beat the Patriots in Super Bowl LII on February 4, 2018, they did much more than win a football championship.  To Eagles fans, the victory represented the culmination of 52 years spent waiting for their team to bring the Vince Lombardi Trophy home to Philadelphia.  Feeling disliked, disrespected, and underestimated by rivals and analysts alike, the Eagles and their fans leaned into their adopted underdog persona, making the ultimate win all the more powerful.

The media attention around the aftermath of the game has focused on the jubilation and vindication, amidst this prior doubt and dismissal, felt by the fans, the players, the coaching staff, and everyone affiliated with the team.  All this was capped off by a joyful parade down Broad Street to commemorate the accomplishment.

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