Tag: culture of compliance

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Compliance in current and historical events

Whistleblowers in the pharmaceutical industry

This is the second of a three-part series profiling whistleblowers in different industries. This started with October 24’s post looking at the financial services industry, including UBS, HSBC, and Citigroup. Today’s post will be focused on the pharmaceutical industry, looking at whistleblowers who exposed fraudulent sales and marketing practices, ethical issues in the development and research phase, and more. The third and final post in this set on next Tuesday will be about whistleblowers who exposed high-profile corporate fraud in major companies such as Enron and General Electric.

Whistleblowers in the pharmaceutical industry make an important contribution to protecting consumer safety when they come forward to raise concerns about business practices in their organizations. Corporate misconduct in this industry has direct impact on patient care and individual health. Therefore the actions of whistleblowers can serve to not only shed light on fraudulent or abusive actions by organizations or individuals within them, but also to prevent future harm to scientists and researchers working in the business, third party partners within their supply chain, and end-user consumers.

  • Jim Wetta, AstraZeneca: Jim Wetta was a sales employee at AstraZeneca who blew the whistle over misleading marketing practices for the antipsychotic drug Seroquel. AstraZeneca had been approved by the US Food and Drug Administration only for treatment of schizophrenia and bipolar disorder. However, the company took on a major sales effort to market Seroquel for off-label use by children under the care of psychiatrists and elderly people suffering from dementia. The company used continuing education seminars, mandatory for doctors to maintain their licenses to practice medicine, to market the off-label uses of the drug which were not previously approved by the FDA. In 2010, AstraZeneca settled with the Department of Justice for $520 million and faced thousands of product liability claims over the marketing of Seroquel. Check out this New York Times article for more information on what happened in this drug marketing case. 
  • Robert Rudolph, Eli Lilly: Robert Rudolph also worked in sales, in his case Eli Lilly. Along with eight other whistleblowers, he went to the federal government with evidence of illegal sales practices by Eli Lilly in the marketing of Zyprexa, a drug approved, like Seroquel, for use in treating schizophrenia and bipolar disorder. In 2001, the company began to market Zyprexa for a variety of off-label uses, especially in the elderly. Apart from this marketing process, Zyprexa representatives also took names from patient lists at doctors’ offices to try to get them to switch to Zyprexa, a blatant privacy violation. Further, throughout this time the company inflated the stock price by counting drug samples as sales. Rudolph, a long-time employee at Eli Lilly who was at the end of his career, saw the corporate culture changing in a bad way and felt that the pervasion of these practices into the business needed to be stopped. In 2009, Eli Lilly agreed to a $1.4 billion fine in a DOJ settlement. For an idea of the reputational risk this case caused Eli Lilly, take a look at this 2009 opinion piece on the dangers of the company’s practices to society.
  • John Kopchinksi, Pfizer: Like Wetta and Rudolph, John Kopchinski was a sales representative, in his case at Pfizer. In 2003, Kopchinski filed a “qui tam” lawsuit under the False Claims Act, which allows whistleblowers to aid the government in recovering money stolen in frauds that resulted in the government losing money. Kopchinski exposed evidence that Pfizer was promoting 13 drugs, most prominently the arthritis drug Bextra, for off-label uses that the FDA had previously rejected and unapproved doses. Kopchinski was fired by Pfizer after reporting his claims, but continued with the lawsuit until 2009. Pfizer went on to settle with the government for $2.3 billion. For more about Kopchinski’s legal battle with Pfizer, read this 2009 NPR piece.   
  • Adam Resnick, Omnicare: In another qui tam lawsuit filed under the False Claims Act, in 2006 Adam Resnick sued Omnicare, a pharmacy providing drugs to nursing homes, for Medicare and Medicaid fraud carried out in a series of kickback schemes with nursing home operators. This corrupt practice could potentially lead nursing home administrators to make decisions about what kind of drugs they give to residents not based upon patient care, but rather based upon what pharmaceutical supplier has enriched them in exchange for their continued business. Omnicare and the involved facilities settled their cases with the government in 2010. Resnick himself has a challenging past: he was a compulsive gambler who went to prison for check-kiting which led the collapse of the bank where he worked. As part of his rehabilitation from engaging in fraud he dedicated himself to exposing it instead. For more information on the Omnicare case, look to this 2010 article from the Chicago Tribune.
  • Cheryl Eckard, GlaxoSmithKline: Cheryl Eckard was a quality assurance manager for GlaxoSmithKlein. In 2002, she reported evidence that the company was selling defective and mis-identified drugs from its Puerto Rico plant. Eckard lost her job in 2003 after repeatedly complaining, but the FDA and DOJ found so many issues in the plant that GlaxoSmithKlein became an example for other pharmaceutical companies for what not to do. Due to products being mixed up in the manufacture and distribution process, the antidepressant Paxil and diabetes medication Avandamet were tainted. Some of the pills fell apart while others did not have the active ingredient required for them to be effective treatment. The factory where they were made did not have an effective quality controls framework in place. GlaxoSmithKline paid $750 million to the DOJ for their oversight shortcomings. For more information on the production problems Eckard exposed, read this 2010 article from the Guardian.

The process for creating, manufacturing, and distributing pharmaceutical products is long and complex, with many decision points where individuals may make choices in a narrow ethical frame or a limited context which prevents them from seeing the consequences of unethical actions or even the existence of better possible choices. Whistleblowers can help to demystify this process and illuminate for public scrutiny the problems in the design of the system that may cause good people to make bad decisions.

Check back next week, Tuesday November 14, for the final post in this three-part feature on whistleblowers in historical events. Next Tuesday’s post will discuss individuals who exposed fraudulent business practices in landmark cases of corporate fraud and bad business practices.

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Best Practices

GRC for compliance professionals

Compliance as a function is sometimes subject to varying definitions. Across different companies, industries, and cultures, organizational perspectives on the purpose and scope of a compliance program can vary. Some see compliance as an alternative to or close relation of the legal department, while others position it much more independently, perhaps as an intermediary between the business lines and audit. Still others may see compliance as the depository for risk-based support activities that do not otherwise fall cleanly into any other established unit.

As previously discussed on this blog, and as this blog will continue to ensure to express, the autonomy and visibility of compliance is integral to the integrity and sustainability of an organization’s employees and business strategy. Compliance blends a rules-based approach with a values-based approach to reconcile ethical expectations with legal obligations and technical requirements.

Professionals who work with interpreting legal and regulatory guidance and implementing these into business practices will likely recognize the acronym “GRC.” GRC stands for governance, risk management, and compliance. This umbrella term integrates these functions to describe the operational activities undertaken by an organization to execute plans, manage risk, and encourage integrity.

The GRC model refers to process themes, not necessarily functional units of an organization. Indeed, the three themes of GRC may be included in operational tasks and across numerous independent departments, including HR, finance, IT, audit, and at the board level, in addition to the obvious areas such as risk, legal, and compliance.

GRC can be seen as a discipline that seeks to coordinate the flow of information and ownership of risk so that the activities and processes it encompasses are effectively and efficiently incorporated. As organizations become bigger, this discipline becomes all the more important for keeping channels of communication open and clear, both up and down silos as well as across business areas.

Ethical decision-making thrives in an integrated system where objectives are clearly expressed and information-sharing is transparent and relied-upon.   Elevating a coordinated GRC discipline can foster a communication regimen in an organization where reasonableness and feedback rather than heuristics and routine dominate. Equity and integrity can thrive if actions are taken openly and cooperatively rather than in isolation.

In the ever-changing regulatory landscape of modern business, it is so important that an organization’s GRC activities be coordinated so that work is not duplicated or wasted and gaps are filled rather than passed over with tunnel vision. These functions share stakeholders and objectives, and therefore should share information to maximize meaningful impact and minimize redundant effort.

The basic concepts of the GRC approach are all useful for a compliance officer or other professional to consider:

  • Governance: This refers to the management control framework used by an organization’s senior leadership, relying on management information from across the organization in order to direct and control the overall strategy and operation of an organization. This concerns major existential questions for the organization, such as – what are the roles of leaders at all levels? What are the reporting mechanisms and what checks and balances exist for these? How does business strategy translate into directions to various business units and how are these instructions communicated to employees? Having an informed perspective on the organization’s governance objectives is very important for a compliance officer because this gives insight to the tone at the top and the mechanism through which these critical values become concrete practices.
  • Risk management: Risk management is the identification, assessment, and response to risk factors which may have an impact on an organization’s activities. This also includes considering risks which do not have an impact and ascertaining that this evaluation remains correct and current as fluid business objectives and conditions may change. All organizations are subject to some risks, such as operational risk, technological risk, and financial risk, while others may be determined by the industry in which they operate, such as market risk, liquidity risk, political risk, third-party risk, and product-specific risks. Risk management entails planning and implementing controls in order to address these risks, either by mitigating them, changing strategy or practice to eliminate them, accepting them, or transferring them to a service provider or partner who is positioned to best respond to them. Legal, legislative, and regulatory risks are of particular interest to compliance officers, as are compliance-centric risks such as reputational risk. Compliance officers should take risk identification and assessment well into account when planning compliance program objectives so that these can be fine-tuned to the emergent and most important needs the business faces in this area.
  • Compliance: Of course, staying in good standing with supervisory authorities and ensuring that business practices and procedures meet standards and requirements set by external laws and regulations as well as internal policies and procedures, ensures that the work done in governance and risk management activities is properly directed and sufficiently supported. An on-going assessment and prioritization of the compliance program’s effectiveness and appropriateness is necessary to ensure that the controls in place are up-to-date and working as intended.

The themes above are all germane to the objectives of a compliance program and can be referred to in seeking buy-in from senior management or supervisory board members, with whom ultimate responsibility for establishing and executing these systemic processes rests.

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This week preview

This week on Compliance Culture

Be sure to visit Compliance Culture this week for posts on these topics.

  • Monday: What is “GRC”?
  • Tuesday: Pharmaceutical industry whistleblowers
  • Wednesday: Johan Cruyff’s ethical leadership
  • Thursday: Blockchain and compliance
  • Friday: Starbucks and cultural respect in Kyoto

Don’t miss it!

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Last week round-up

Last week on Compliance Culture

Check out last week’s posts on Compliance Culture, in case you missed or want to revisit them.

Many thanks for reading!

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Compliance in popular culture

Selected TED/TEDx talks on bioethics

The study of bioethics is rich and varied, always growing in diversity as emerging technologies advance. Bioethical issues have their root in decision-making about research methodology, where academics struggled to define propriety in humans’ exploitation of the natural world – plants and animals – to further science for their own benefits. Bioethics maintains this same ethos today, centered on the link between human interests in and relationship to the sciences, notably including biology and medicine. The inquiries of bioethics extend to a huge swath of topics in within health and human sciences, reflecting the deep reach technological innovations have into everyone’s lives.

First, a word on the relationship between science and morality. In Science can answer moral questions, Sam Harris suggests that the values humans rely upon to define their ethical obligations and moral choices can be seen as facts, which are the foundation of science:

 

 

Harris is a neuroscientist and philosopher who seeks to define the way that ideas about human life are shaped by the physical world in which people live.   People often presume that science cannot answer the existential questions humans consider most compelling, like – what is the meaning or purpose of life? This modern world is continually impacted by technological change, but does science just provoke moral issues, or can it indeed be a force for addressing or solving them? Science is fact-driven and so too can be people’s practical assessments about right and wrong in real life. Therefore science can and should be an authority in the domain of objective fact rather, than only basing these considerations solely on non-concrete intuitions or opinions.

Building upon this presumption that science and ethics do indeed have a powerful mutual dependency, bioethics asks many moral and existential questions germane to this relationship. Animal rights, gene therapy, patient care, bio-engineering, and research methodology are just a few examples of areas where bioethical issues and debates commonly arise. The below TED/TEDx talks are a sampling of how scientists, technologists, and academics confront these challenges in their work and expect that the relationship that science and technology have with law and philosophy will continue to impact human life and society.

  • It’s time to re-evaluate our relationship with animals (Lesli Bisgould) – Human relationships with animals are more morally and legally complicated than many people might realize. Living with companion animals is very common and most people would say that they have compassion for animals and feel they should be treated with respect and dignity. However, humans draw unconscious lines between animals they feel are household pets, such as cats or dogs; captive animals they may think exist for educational or entertainment purposes, like whales and dolphins; livestock animals that are part of the industrial food manufacturing supply chain, like cows and chickens; and wild animals that are hunted or poached, like elephants and lions. Why do we make these distinctions and do they have some objective basis in a moral universe? What is the responsibility and response of the law?

 

 

  • Gene Therapy – The time is now (Nick Leschly) – Gene therapy could enable the repair of diseased or damaged cells. With applications from this technology, doctors could cure illnesses and fix injuries for good instead of requiring a lifetime of preventive and prescriptive treatment. This is an advancement that could change medicine forever. However, major funding has historically been hard to attract for research and development in gene therapy because of ethical and religious uncertainties, not to mention the resistance of some individuals and institutions within the traditional medicine establishment. Moral fear, some concrete and others more esoteric, about the dark side of where this technology could take society, even if scientists enter with the best intentions to control against that, have been a financial and ideological barrier to progress.

 

 

  • Transparency, Compassion, and Truth in Medical Errors (Leilani Schweitzer) – The Alexander Pope proverb goes “To err is human, to forgive, divine” – but what about when the human error results in the death of a loved one? How does one forgive when the mistake is that of a professional – such as a doctor? The legal tort system and medical malpractice insurance certainly do not inspire a reaction of kindness from the survivors. However, perhaps truth is the essential element in handling a tragic event such as a medical mistake that leads to catastrophic injury or death. Truth in medicine is important when the mistake occurs, in the form of transparency, accountability, and honest communication. Truth is also important in recovery by the survivors after the mistakes – remedial care, openness, and radical candor that can lead to emotional healing and inspire advocacy. Admitting and facing mistakes is a powerful act of integrity that can never be supplanted by the legal and administrative system in defining patient care responsibilities.

 

 

  • It’s time to question bio-engineering (Paul Root Wolpe) – As this blog often espouses, the best time to address moral or integrity questions and consider implementing a code of ethics that will be sustainable for the future, is universal: as soon as possible. There’s no time too soon to think about the foundations of integrity in any area of society, especially when it comes to science and developing technology. In the field of bio-engineering, technology has already advanced quite far to do things like selective or hybrid breeding of animals, modification of food products, and the creation and manipulation of artificial cells. Regulation has become controversial as an obstacle to advancement. The presumption goes that making rules or laws that cover the scope of people’s work in a scientific area will stifle their innovation. This does not have to be true if a moral code is built into the knowledge acquisition process from the beginning. Progress and ethics are not naturally at odds and do not have to be positioned as antagonistic to each other in pursuit of scientific discovery, but to let either take dominance over the other is short-sighted and dangerous.

 

 

  • Trust in research – the ethics of knowledge production (Garry Gray) – The work of research scientists weighs heavily on consumer and public safety. Most of the goods people use on an everyday basis have been the product of a prolonged research and development process, which laypeople assume has been conducted with accuracy as the principle interest and free of biases. However, this is far from true in practice. Corporate funding and institutional agendas all have great influence on scientific research. People are well aware of the possible danger of these influences, which are nevertheless necessary for work to be done, but the deeper problem is that the researchers themselves may believe they are able to naturally maintain independence as a function of their expertise. In reality, no conflict of interest risk management mechanism can be effective if it only exists within a person’s head. Sensitively and sensibly managing these conflicts and the biases they create is very important work that must be responsively and proactively done to support research scientists in their endeavors.

 

 

Check back in the coming weeks for further posts on bioethics, including a look at current trends in corporate compliance issues arising from bioethical debates in the scientific research and medical fields, further discussion of bioethics as it relates to artificial intelligence, and insights on the larger interrelationship between technology and ethics of knowledge acquisition, engineering, and design.

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Trends in business compliance

Round-up on evolving role of central banks

Central banks may have once been quite remote in their workings to the average person, relegated to seemingly academic and technical tasks of interest rate management and currency market machinations. Perhaps many people had only ever heard of the Federal Reserve and had no perspective on the worldwide system of international and supranational central banking.

The 2008 global financial crisis, however, thrust central banks worldwide into the spotlight. Economic news since that time garnered a lot of attention in the media as countries attempted to recover from the economic crisis and re-defined their financial systems to be more resilient and guided by a more effective controls framework. This effort has been one that started with a focus on free-wheeling rescue and stimulus and subsequently has morphed to still include those objectives, with somewhat more restraint when possible, but now also to visibly impact many other areas of the financial system and markets.

In this process, central banks around the world have found themselves in a bit of an existential quest to determine what their engagement level and scope will be. Technological advancements and changes in post-crisis regulatory and legislative priorities have pressured central banks to decide whether they will contribute to certain markets and identify the extent of their own autonomy within their national systems.

  • Bank of Russia is facing a possible national banking crisis, as two major banks have needed rescue due to liquidity problems in just a month’s time. In August, there was a run on deposits at Bank Otkritie FC. In September, B&N Bank asked for a bailout to increase liquidity. The current problem could stem from the central bank’s efforts to rejuvenate Russia’s banking industry in 2014 on the heels of financial troubles in the industry from falling oil prices and international sanctions. At that time, Bank of Russia offered inexpensive loans to major banks to encourage them to take over smaller ones that were not doing well.   This consolidation caused the large banks to take on the troubled assets of the small banks, which are now creating the current liquidity pressure. Otkritie even has alleged that the assets it acquired were fraudulently represented in the purchases. This suggests issues with Bank of Russia’s supervision of those entities. If these early bailouts cannot contain the problems then a privatization trend could take hold:  Russia to Bail Out Second Major Bank in Month as Troubles Spread
  • The Swiss National Bank is publicly listed on the Swiss stock exchange, with 48 percent of its shares privately owned. Some other countries do have central banks with private shareholders, but this year, the share price of the Swiss National Bank has almost doubled. This trading activity is an interesting anomaly, as shareholders do not stand to benefit from the Swiss National Bank’s interventions in the foreign currency markets to keep the value of franc down. It’s possible that some investors are speculating on this thinly-traded stock in order to profit from price volatility that is not hard to generate with fairly moderate-sized transactions. Other motivations could be shareholders hoping for a public-to-private buyout by the bank or a flight to quality:  The mysterious rise in shares of the Swiss National Bank 
  • South Africa’s central bank Reserve Bank claims its independence is under attack as the South African government has been encouraging lawmakers to redefine the mission of the bank from inflation management to promoting socioeconomic benefits for South Africans. The Reserve Bank has been targeted by the Public Protector who is charged with investigating a bailout by the central bank from 1992. Far from a neutral process, this investigation has been controversial and politically-charged, and it has been seen as seeking to undermine the independence and reputability of the central bank. This very public reputational dispute begs the question of how central banks worldwide may be blamed disproportionately for their country’s economic problems or pressured politically to adopt agendas contrary to their essential purpose:  South Africa Central Bank Says Anti-Graft Head Met Zuma Team
  • The hot market this year has definitely been in cryptocurrencies, and questions have abounded about how national supervisors would react to a proliferation of trading exchanges and market offerings in Bitcoin, Ethereum, and others. The People’s Bank of China (PBoC), China’s central bank, has issued probably the strongest regulatory challenge to the market for cryptocurrencies so far. The PBoC first banned initial coin offerings (ICOs), the IPOs of the cryptocurrencies market, and then ordered all trading exchanges in Beijing to cease trading cryptocurrencies and quit allowing new users to register. China’s relevant industry regulator, the National Internet Finance Association of China, fell in step with the PBoC to condemn cryptocurrencies as illegal, linked to illicit activities, and too risky for market stability and investor protection interests:  China Is Shutting Down All of Beijing’s Bitcoin and Cryptocurrency Exchanges
  • However, not all central banks have had such an allergic reaction to bitcoin and other cryptocurrencies. Taking in stride the possible risks and undesirable associations, others are contemplating whether the way to manage speculative trading in their own currency markets might be to join in issuing cryptocurrencies as well. This “if you can’t beat them, join them” approach has been suggested by the Bank for International Settlements, a consortium of national central banks based in Switzerland. Some central banks, including the Bank of England and the Bank of Canada, are already experimenting with blockchain technology for interbank payment systems. The Reserve Bank of India is also looking into blockchain and even considering issuing its own cryptocurrency, as is the Estonian Ministry of Finance (to the disapproval of the European Central Bank). The overall verdict is that central banks need to take more time to consider their own interests before becoming enthusiastic cryptocurrency offerors, but the enticement of participating in the market in hopes of stemming potential risks to the financial system and their own monetary policy may prove too much to resist:  The Bitcoin Bandwagon: Central Banks Consider Their Own Cryptocurrencies

As the global economy continues to deepen in complexity and interconnectedness, inevitably bouncing between financial recovery and relapse, the role of central banks in this worldwide system will also keep evolving. Systemic changes in the market and transformative advancements in technology both represent threats to, but also opportunities for, the traditional central banking system.

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Compliance and ethics business case studies

Profiles of ethical leadership in sports coaching: John Wooden

This is the first in a month-long series of five posts about historically significant sports coaches as exemplary models for ethical leadership values. Today’s post will focus on John Wooden, the legendary UCLA basketball coach. November 8th’s post will analyze the famous “14 rules” of Johan Cruyff as business values to promote organizational and employee integrity. On November 15, the profile will be about Jim Valvano and the inspiring speech he gave at the ESPY Awards only two months before his untimely death in 1993. Vince Lombardi, the NFL Hall of Fame coach, and his insights on the ethics of leadership and performance will be the focus on November 22. Finally, on November 29, a contemporary coach will be the final profile along with the previous leaders from sports history, with the focus on NBA coach Gregg Popovich.

These coaches are all beloved, legendary figures whose importance in society extends far beyond their teams, and for good reason.   Beyond inspiring players and other coaches who develop with them or work alongside them, the ideas coaches share about motivation, personal growth, attitude, and performance can easily translate from the court, pitch, or field to all areas of life.

No discussion of legendary coaches in sports history is complete without mentioning John Wooden, so it is logical to start this inquiry with him. John Wooden was the head basketball coach at the University of California Los Angeles from 1948 until 1975. During that time, he coached the team to ten NCAA national championships in 12 years, seven of those in a row. For his many storied accomplishments at UCLA, Wooden was named coach of the year six times.

Apart from his winning record, Wooden is renowned for his popularity among his former players, many of whom recognized him as having shaped their lives positively. He is well-known for his organizational leadership and insights which have been translated as tips for success in life in general, often relying on simple and straightforward inspirations for positive behavior and attitude. Wooden defined many leadership and performance principles to inspire his players to achieve their best in basketball and life. These were embodied by, for example, his Seven Point Creed, which included being true to yourself, helping others, building relationships, seeking advice, and being thankful, and the Pyramid of Success.

The Pyramid of Success describes 15 blocks which, when considered in performance and strategy, support competitive achievements which can be reached through a values-based approach. These 15 qualities are: (1) industriousness, friendship, loyalty, cooperation, and enthusiasm; (2) self-control, alertness, intitiative, and intentness; (3) condition, skill, and team spirit; (4) poise and confidence; and, culminating in, (5) competitive greatness. These are supported by, on one hand, from bottom to top: ambition, adaptability, resourcefulness, fight, and faith; and on the other hand also from bottom to top: by sincerity, honesty, reliability, integrity, and patience.

This balanced approach demands that any individual hoping to reach competitive greatness must take into consideration the personal qualities and resilience that are required to get there. In this model, quick wins or external satisfaction are not emphasized; instead, building character ethic and cultivating a measured path to the desired achievement.   These values are not special to basketball or sport. They are also not mere business principles. They are a life philosophy and paradigm which an individual can consistently carry though all of his or hers endeavors. The hard work a person devotes to the dual goals of sustaining faith and patience provide the momentum for the culmination in success.

For an interactive look at this, check out the website memoralizing him, which has a section devoted to the Pyramid of Success.

The key takeaway from the Pyramid of Success, and many of Wooden’s finer management and development insights, is that success and winning are not synonyms. A person can reach competitive greatness, the ultimate stage of the Pyramid of Success, but that does not mean the result will be winning every time thereafter. By the same token, an individual game or effort can result in a win, but that does not mean intrinsic success has been achieved in a sustainable, credible way.

In Wooden’s words in his 2001 TED talk (linked below), success is defined as “peace of mind attained only through self-satisfaction in knowing you made the effort to do the best of which you’re capable.” This is not something others can judge or define and does not come from an external performance or perception. This sense of self-accomplishment, win or lose, prevail or fail, can only be reached through hard work, the commitment to which is supported by equal doses of patience and faith.

Watch and read Wooden’s TED talk, “The difference between winning and succeeding,” here.

Having a commitment to this internally-motivated model of success is powerful for determining that the results of one’s effort will be about the integrity with which it was made. Individuals and organizations can inspire a values-based approach to work from this management mechanism. Getting there is the most important part of the process of “being” there. If the emphasis is on winning, competition, profit, attention, and external accolades, then the internal values will be missing to sustain the accomplishment. But, if the emphasis is on growth, hard work, relationships, learning, preparing, and internal satisfaction, then the greatness achieved will last long enough to get the win and keep much more after that.

For a great study of the enduring legacy of John Wooden, check out this Sports Illustrated article by Seth Davis from March 2017.

Also, don’t forget to check back next Wednesday when this series continues on to look at Johan Cruyff, legendary Dutch footballer and manager whose coaching philosophy is credited with revolutionizing the game of football.

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Administrative

Happy Halloween!

Happy Halloween from Compliance Culture!

In honor of the holiday, check out this round-up from American Banker on the scary regulatory outlook for the banking sector:  Here’s what bankers are fearing this Halloween season.

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Best Practices

Appealing to Myers-Briggs dichotomies in compliance communications

The Myers-Briggs Type Indicator (MBTI) is a set of personality types that categorizes individuals’ experiential preferences. The MBTI has become very popular for use in business settings, for managers to determine how to develop employees or build teams as well as for individuals to analyze their own way of working and define their particular world view and tendencies in interacting with others, based on these preferences.

The MBTI classification system is fundamentally based upon the presumption that humans have four main psychological functions, or dichotomies, through which they view the world. These are thinking (T), feeling (F), sensation (S), and intuition (N). Thinking and feeling are the functions people rely upon for judgment in decision-making. Sensation and intuition describe how people perceive new information. Taken together, one of these four functions will be naturally dominant for each person the majority of the time.

Added to these functions are people’s attitudes, expressed by the terms introversion (I) – a preference to operate internally, focused on reflection and ideas – and extroversion (E) – a preference to operate externally, focused on behavior and people. This relates to how people prefer to live their “outer lives” and is not necessarily as simple as defining a person as “shy” or “outgoing” but looks deeper into how people get or spend their energy and whether their information-processing, personal focus, and pace is determined inward or outward.

Finally, the MBTI also incorporates lifestyle preferences, identifying that people have preference for using either the judging (J) functions (thinking or feeling) or the perceiving (P) function (sensation and intuition).

These eight psychological functions and preferences – four sets of two each – can be mixed and matched among each other in different combinations, resulting in the sixteen MBTI distinct “personality types.” In any given group there is likely to be some mix of these types, sometimes more diverse than others. Each type brings with it some indications for the person may behave in an individual or collective setting. Therefore understanding the elements of these different types can be useful in fine-tuning messaging to have maximum appeal to one, some, or all of them.

Based on the above, there are four dichotomies to the MBTI. In each dichotomy, individuals select from two letters (T for thinking versus F for feeling, for example) the one which most accurately, if not completely, seems most accurate in depicting their personality types. The differences between these four dichotomies are important to understand and useful to take advantage of in tailoring communication across organizational levels to raise compliance awareness.

  1. Introversion (I) or Extroversion (E): Preference for Introversion suggests an inward focus, with more contemplation and observation in learning or gathering information. I types would enjoy e-learnings, reading guidelines and policies, or other self-paced activities. Preference for Extroversion, on the other hand, indicates a suitability for fast-paced outward focus. These are the eager participants in dilemma sessions or group trainings who like to work with others and develop their ideas out loud, getting energy from quick progress of talking through learning materials.
  2. Sensation (S) or Intuition (N): Preference for sensation means that concrete, practical information will be the most appealing to these individuals. Communications should use clear and literal descriptions based in reality. Those who prefer intuition, on the other hand, may be more likely to dream about what could be rather than what is. Contemplating business cases and dilemmas would be fun and enjoyable for them.
  3. Thinking (T) or Feeling (F): Those who lean toward Thinking will respond to decision-making that is promotes rationality and justice. A rules-based approach to communicating compliance principles will evoke their sense of reason and equity and make the objectives relatable. On the other hand, people who prefer Feeling will benefit from a values-based approach. Playing up personal morality and situational empathy is more effective for them.
  4. Judging (J) or Perceiving (P): Judging is aligned with a preference for planning and methodical assessment. These people will be convinced of the value of a compliance program by, for example, formal risk inventories and control framework evaluations, and coordinated, long-term implementation plans with steps and phases for their goals. People who prefer Perceiving, on the other hand, need a flexible view. This is challenging to adapt to fixed rules and regulations, but offering creative approaches to those can be an engaging possibility.

For more information on the MBTI and its four dichotomies, check out this handy interactive chart.

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This week preview

This week on Compliance Culture

Be sure to visit Compliance Culture this week for posts on these topics.

  • Monday: Myers-Briggs personality types and compliance communications
  • Tuesday: Happy Halloween!
  • Wednesday: John Wooden’s ethical leadership
  • Thursday: Central banks in the modern global economy
  • Friday: TED & TEDx lectures on bioethics

Don’t miss it!