Roy Snell has a simple message for anyone who really wants to put a stop to Wall Street corruption – or business corruption of any kind, for that matter: join the compliance and ethics movement.
‘There is a surge of interest in this country to implement compliance and ethics programs,’ says Snell, CEO of the Society of Corporate Compliance and Ethics. Greater attention to regulations like the Foreign Corrupt Practices Act, the new and improved UK Bribery Act and the Dodd-Frank whistleblower provisions has forced corporations to become more aware of the connections between ethical behaviour and corporate policy.
Snell maintains that efforts to strengthen compliance and ethics programs are building momentum because the business community has come to realise that ethical lapses and conflicts of interest played a significant role in creating the 2008 economic collapse and subsequent recession. He is using his organisation to educate professionals and corporations about how they can improve operations and derive financial benefits by developing better compliance systems and ethical practices.
After his group’s annual meeting in September, Snell reported that his organisation’s membership of 6,000 compliance and ethics professionals had grown 25 per cent, and his organisation’s annual meeting saw a 20 per cent increase in attendance over last year. He also says compliance jobs are among the fastest-growing in the country, which means more people are seeing the industry as a meaningful career track. The makings of a movement are taking shape.
‘If we are successful,’ says Snell, ‘we’ll restore trust in business and improve the business culture, and the regulators and enforcement community will be able to go away and do something else for this country.’
An easygoing and soft-spoken fellow, Snell, who also heads the Health Care Compliance Association, is very optimistic about America’s ability to make a wholesale shift to a more ethical business culture. However, he believes the biggest challenge to transitioning US businesses to higher ethical standards will be the ability of each corporation to effectively deal with conflicts of interest in the workplace.
For Snell, a former administrator, consultant and compliance officer for the Mayo Clinic, conflicts of interest represent ‘a simple case where someone can’t fix a problem because it will hurt their reputation, affect expenses negatively, affect revenue negatively or affect their personal income negatively.’ For example, a banker might make a questionable loan or trade because not making that loan or trade would affect his commission income negatively. Leading up to the economic crisis, many employees were making business decisions that were motivated by personal gain, not by a desire to adhere to sound business principles.
Even prior to the 2008 crash, top management at companies such as Enron, Tyco and WorldCom made questionable profit-motivated decisions that led to some of the largest accounting scandals in history. In the case of Enron, when unethical behaviour was revealed to some of the executives, nothing was done to stop it because of conflicts of interest. Unsurprisingly, totally eliminating such behaviour in a corporation is difficult because the biggest conflicts of interest always revolve around personal financial gain. However, experts say conflicts of interest can be managed effectively (see, How to manage conflicts of interest, left).