In-house counsel and other compliance professionals often lament the difficulty they have in securing the headcount and resources they need to maintain effective compliance programs. Too many CFOs, they say, still see compliance as just another law department cost center.
The cautionary tale can only take them so far. No matter how many companies are publicly humiliated by high-profile investigations, financial penalties and individual prison terms, criminal liability can remain an abstraction to business executives until it happens to them. Horror stories may get their attention, but don’t really speak their language: numbers. To really get the business side on board and actively engaged, counsel must demonstrate the impact of compliance and fraud detection on the bottom line.
There’s power in numbers, and sometimes the simpler they are, the better. For example, according to Kroll Inc.’s latest Global Fraud Report, companies on average lose a week’s earnings to fraud every year.
Law enforcement authorities at home and abroad take a particularly dim view of paper-only, half-hearted compliance regimens these days. Audits affirm the company’s commitment, and can bolster a rogue-actor defense in the event of a violation.
That said, requesting audits can sometimes create an awkward political situation for corporate counsel. They want to draw attention and resources to compliance gaps, but don’t want to look like they’re not doing their jobs.