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Notwithstanding its name, the concept of moral hazard originally had little to do with morality. Rather, it referred to the phenomenon that providing insurance tended to promote risky behavior by insured parties. Subsequently, moral hazard has been applied to a wide range of circumstances where incentives encourage unduly risky conduct by shifting the impact of a bad decision to a party other than the decision-maker.
Moral hazard was, for instance, widely seen as playing a major role in the economic crisis of 2008, as some of the individuals creating the risks at issue there evidently did not have interests sufficiently aligned with those jeopardized by their actions.
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Today, I conclude my five-part series on a Primer on FCPA Compliance. I end with a piece on policies and procedures. There are numerous reasons to put some serious work into your policies and procedures. They are certainly a first line of defense when the government comes knocking. The 2020 FCPA Resource Guide made clear that “Whether a company has policies and procedures that outline responsibilities for compliance within the company, detail proper internal controls, auditing practices, and documentation policies, and set forth disciplinary procedures
will also be considered by DOJ and SEC.”
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There is a portion of the DOJ’s Evaluation of Corporate Compliance Programs that has received surprisingly little play in FCPA compliance circles. Under the heading “Risk-Based Training,” the DOJ poses a series of questions companies will need to answer.
What training have employees in relevant control functions received? Has the company provided tailored training for high-risk and control employees, including training that addresses risks in the area where the misconduct occurred? Have supervisory employees received different or supplementary training? What analysis has the company undertaken to determine who should be trained and on what subjects?
The guiding concept is fairly straightforward and isn’t new. The idea is that the frontline sales employee will require a different sort of training than the Accounts Payable clerk, the CEO, or the local HR manager. Each of them faces a different type, level, and quality of FCPA risk – and this presupposes that the
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This week on the Compliance Podcast Network, I am running a multi-part podcast series, Smart Automation for Risk Management, sponsored by Lextegrity Inc. As a part of this series, I had the opportunity to visit with Andy Miller, Chief Analytics at Lextegrity. We took a deep dive into risk monitoring through data analytics.
We began with a discussion about is what a continuous monitoring solution. Miller said that it “provides compliance and audit teams with a comprehensive way to keep a pulse on transactional spend and revenue risk in their enterprise.”. The key to the analytics is they are so configurable and contextual to your specific risks or your lines of business or the historical issues that your organization may have had so that the risk algorithm is actually tailored to your business and your exposure and not, um, some static configuration.” It should connect to a wide variety of EPR systems such as SAP, Or
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In today s episode of The Compliance Podcast, Tom is joined by regulatory expert and technology practitioner Brandon Daniels, President of Exiger - Global Markets.
Tune in to the episode as Tom and Brandon share an interesting discussion about trending compliance risks and business ventures.
Major takeaways discussed in the See more +
In today s episode of The Compliance Podcast, Tom is joined by regulatory expert and technology practitioner Brandon Daniels, President of Exiger - Global Markets.
Tune in to the episode as Tom and Brandon share an interesting discussion about trending compliance risks and business ventures.