Compliance: An Ounce of Prevention is Worth a Pound of Cure

on June 24, 2014

Marubeni Corporation’s second FCPA fine in two years is indicative that compliance is easier said than done. Over two years Marubeni has paid a total of more than $140 million in fines. It continues to puzzle me how big, otherwise successful, global companies can be so lacking when it comes to compliance and controls processes.

The key to compliance of any type, and particularly FCPA, is to inspect what you expect. People behave differently when they know they are observed. For global companies transacting business in markets that have higher risk for corruption and bribery, it is important for employees to know their activities are being observed.

Observing employee behavior is easier today than it has ever been. For most companies, inspecting what is expected can be achieved by monitoring and analyzing 100% of a company’s travel and entertainment (T&E) transactions. Today’s state-of-the-art data analysis solutions like Oversight Insights On Demand provide automated analysis of 100% of a company’s global T&E transactions on a monthly basis for well under $100,000 per year for all but the largest global organizations. Typically, these companies can monitor 100% of their T&E transactions while decreasing the level of effort required to perform sample audits and analysis. At Oversight, we have seen decreases as high as 70%.

The US Department of Justice (DOJ) has made it clear that they will continue to pursue FCPA cases.

These cases can only be positive for the DOJ from a public relations perspective. The combination of big multi-national companies and corruption involving foreign officials makes FCPA prosecution a bipartisan favorite. And while the fines are big and the related costs, including legal fees, investigation expenses, and consulting fees, are huge, this is truly a case where an ounce of prevention is worth a pound of cure.