http://www.bulletproofblog.com The blog on crisis communications Fri, 30 Jul 2010 17:06:27 +0000 http://wordpress.org/?v=2.8.4 en hourly 1 http://www.bulletproofblog.com/2010/06/15/the-business-case-for-communication-as-a-key-corruption-control/ http://www.bulletproofblog.com/2010/06/15/the-business-case-for-communication-as-a-key-corruption-control/#comments Tue, 15 Jun 2010 14:26:49 +0000 Richard Levick http://www.bulletproofblog.com/?p=3031 regulator and media scrutiny, it should be noted that there are a number of benchmarks against which any effective compliance program can be measured. There are U.S. Federal Sentencing Guidelines; Transparency International's Business Principles for Countering Bribery; the World Economic Forum’s Partnering Against Corruption Initiative (WEF PACI); the Organisation for Economic Cooperation and Development’s (OECD) Good Practice on Internal Controls, Ethics and Compliance; and the United Nations’ Global Compact's 10th Principle, to name just a few.

These leading organizations have outlined measures that not only mitigate risk in business operations; but also provide protection in both the courtroom and Court of Public Opinion should regulators spot a problem. For instance, corporate charging guidelines issued by the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) explicitly state that “the existence and effectiveness of the corporation’s pre-existing compliance program” should be among the factors considered when prosecutors determine whether criminal or civil charges are warranted.

Note the use of the word “effectiveness.” What that tells us is that merely implementing procedures to detect corruption – such as auditing, hotlines, and testing – isn’t enough to assuage prosecutorial prerogatives. The program must make a tangible impact on corporate culture – and more often than not, that comes down to what experts call “the tone at the top.” In other words, an essential element of any effective compliance program is communication – not only to ensure that employees, subsidiaries, and business partners know the rules of the road; but also to ensure that the organization is appropriately credited for its efforts by regulators, shareholders, and other external audiences.

Transparency International's Susan Côté-Freeman states that it is "absolutely essential for companies to communicate about their compliance programs because it demonstrates a commitment to transparency, which is key to good corporate governance.

PricewaterhouseCoopers’ Glenn T. Ware, one of the firm’s leading authorities on global anti-corruption programs, calls communication “indispensible,” because it “not only supports compliance, but articulates that the company is an honest and ethical entity that people want to do business with.”

Upon examination of the specific measures outlined by the benchmarking organizations listed above, it’s clear that they agree with Ms. Freeman and Mr. Ware’s assessments. In fact, communication is an express element of leading compliance program regimes the world over:

• The United States Federal Sentencing Guidelines state that “remedying harm from criminal conduct” requires that a company “take reasonable steps to communicate” the aspects of its “compliance and ethics program.”

 

• The Transparency International Business Principles for Countering Bribery state that:
       • “The enterprise should establish effective internal and external communication of the Program;”
       • “The enterprise should publicly disclose information about its Program, including management systems employed to ensure its implementation;” and that
       • “The enterprise should be open to receiving communications from relevant interested parties with respect to the Program.”

 

• The World Economic Forum, Partnering Against Corruption Initiative echoes Transparency International’s communications measures verbatim.

 

• The OECD Good Practice Guidance on Internal Controls, Ethics and Compliance dictates “strong, explicit and visible support and commitment from senior management;” and

 

• Similar guidance is also found in the UN Global Compact 10th Principle and the International Chamber of Commerce’s anti-corruption policy.

Simply put, communication is an essential element that, if absent from a company’s compliance strategy, limits the regulatory and brand benefits of having a strong anti-corruption program in place. Just as companies that have “gone green” articulate their efforts far and wide, the companies leading the global fight against corruption must do the same or risk losing an equally powerful market perspective that defines them as having the highest regard for business ethics and compliance.

Richard S. Levick, Esq., President and CEO of Levick Strategic Communications, sits on the board of the World Economic Forum’s Partnering Against Corruption Initiative (PACI). He is also a contributing author to Bulletproof Blog. Connect with him @richardlevick.

]]> http://www.bulletproofblog.com/2010/06/15/the-business-case-for-communication-as-a-key-corruption-control/feed/ 2 http://www.bulletproofblog.com/2010/06/14/bulletproof-interview-special-%e2%80%93-nick-allard-on-lobbying/ http://www.bulletproofblog.com/2010/06/14/bulletproof-interview-special-%e2%80%93-nick-allard-on-lobbying/#comments Mon, 14 Jun 2010 12:51:34 +0000 Michael Robinson http://www.bulletproofblog.com/?p=3015 continuing series of Bulletproof Blog™ video interviews with thought leaders across multiple disciplines and industries, I recently sat down with Nick Allard of Patton Boggs LLP to discuss the state of lobbying at a time of significant reputational focus for the industry.

With politicians and others (from late night comedians to think tanks) rarely missing an opportunity to criticize the lobbying profession in recent years, Mr. Allard is quick to remind us that the people’s ability to have their say in the policy decisions that impact their lives is essential to American democracy. When the government takes steps to restrict advocacy, the result is a government that is less transparent and much less accountable – especially to Main Street and every American who have a need to rely on government relations professionals to help them navigate the complex world of Washington, D.C.

As an expert in how legislative, regulatory, and administrative matters converge to shape public policy at the federal, state, and local levels of government – and a recent winner of the National Law Journal’s 2010 “Visionaries” award – Mr. Allard shared these insights – and many more – with Bulletproof Blog™.

Click the video above to view Mr. Allard’s interview in its entirety.

 Michael W. Robinson is a Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the nation's top crisis communications firm. He is also a contributing author to Bulletproof Blog.

]]> http://www.bulletproofblog.com/2010/06/14/bulletproof-interview-special-%e2%80%93-nick-allard-on-lobbying/feed/ 2 http://www.bulletproofblog.com/2010/06/02/wall-street-taking-the-next-step-with-reform/ http://www.bulletproofblog.com/2010/06/02/wall-street-taking-the-next-step-with-reform/#comments Wed, 02 Jun 2010 14:01:56 +0000 Michael Robinson http://www.bulletproofblog.com/?p=2872 begin conference negotiations on a final financial regulatory reform bill that is expected to reach the President’s desk by the July Fourth recess, proponents of the legislation are aggressively articulating that “the most far-reaching financial regulatory reforms in generations” are, at their core, a victory for the people over the powerful. This is a powerful message indeed.

Treasury Secretary Tim Geithner has said that the bill “will restore the financial system to its proper role of providing financing for Main Street businesses across the United States.” Deputy Secretary of the Treasury Neal Wolin has taken the populist messaging a step further, saying that “it is time to build a financial system that works for families and small businesses, not just for bankers or brokers; for long‐term investors, not just for traders looking to turn a profit.”

With more than one-third of Americans now less trusting of financial institutions than they were a year ago, according to a survey released Wednesday by AlixPartners, the Obama Administration’s positioning seems to be working. And while we still don’t know the final shape of this bill, there is now a window of opportunity for financial institutions of all types to articulate the benefits of adopting the new regulatory infrastructure and demonstrate that they’ve “seen the light.”

By highlighting the ways in which strong consumer protections will directly translate into
better deals for mortgage borrowers and credit card users; how executive compensation reforms and enhanced shareholder protection mechanisms will make companies more transparent and, in the process, attract new investors and reassure current ones; or how safeguards aimed at reducing systemic risk can help to prevent overall market volatility and, thus, the losses and panic that reigned in 2008-2009, big financial services providers have ample opportunity to focus on the positive business aspects expected to be included in the bill.

Change is here – and it is being presented as a simple choice to the banking industry: Either fight it and continue to be seen as part of the problem; or embrace it and start being seen as part of the solution.

Michael W. Robinson is a Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the nation's top crisis communications firm. He is also a contributing author to Bulletproof Blog. Connect with Levick on Twitter: @Levick.

]]> http://www.bulletproofblog.com/2010/06/02/wall-street-taking-the-next-step-with-reform/feed/ 1 http://www.bulletproofblog.com/2010/05/13/well-prepared-poultry-producers-should-welcome-new-safety-standards/ http://www.bulletproofblog.com/2010/05/13/well-prepared-poultry-producers-should-welcome-new-safety-standards/#comments Thu, 13 May 2010 19:25:54 +0000 Gene Grabowski http://www.bulletproofblog.com/?p=2778 announced plans to impose tough new standards aimed at curbing instances of food-borne illness arising from tainted poultry. At a time when recent recalls of lettuce, deli meats, and ground beef are raising food safety worries among consumers, the USDA views this as a necessary step to calm an increasingly anxious public. With a recent Deloitte survey finding that 65 percent of consumers are concerned about the safety of the food they eat, government estimates predict that the program could prevent as many as 65,000 salmonella and campylobacter infections each year.

Unlike ground beef, which is susceptible to E. coli contamination, the pathogens that attack poultry are generally non-fatal. That’s one reason poultry producers haven’t suffered many of the same reputational woes that have befallen other meat-packers and processors in recent years. But another reason – and likely the most significant one – is that the poultry industry already understands what it means to go above and beyond compliance. Not only do companies such as Purdue have USDA inspectors on-site in their plants, they also provide mandatory safety training for all processing associates and employ food protection and quality assurance managers that are certified by leading public health organizations.

With such a strong commitment to safety already on display, the branding challenge presented by the USDA’s planned action is for the poultry industry to highlight the fact that it welcomes added government diligence, even as it articulates the many steps it takes “from farm to fork” to protect consumers. Then, poultry producers would be wise to identify ways to go beyond compliance once again – because when it comes to safety, what a company chooses to do always speaks louder than the rules it is forced to follow.

Gene Grabowski is the Senior Vice President of Crisis and Litigation at Levick Strategic Communications, the nation’s top crisis communications firm He is also a contributing author to Bulletproof Blog. Connect with him @crisisguru.]]> http://www.bulletproofblog.com/2010/05/13/well-prepared-poultry-producers-should-welcome-new-safety-standards/feed/ 1 http://www.bulletproofblog.com/2010/04/30/criminal-investigation-ratchets-up-the-stakes-for-goldman-sachs/ http://www.bulletproofblog.com/2010/04/30/criminal-investigation-ratchets-up-the-stakes-for-goldman-sachs/#comments Fri, 30 Apr 2010 20:40:54 +0000 Michael Robinson http://www.bulletproofblog.com/?p=2597 U.S. Attorney’s Office in the Southern District of New York is conducting a criminal investigation into whether Goldman Sachs or its employees committed securities fraud while trading in the mortgage market. The Securities and Exchange Commission (SEC) referred the matter to the Justice Department, according to reports.

The extent to which this news ratchets up the pressure on Goldman Sachs is hard to overstate. As the Wall Street Journal noted, no major U.S. financial services firm has ever survived such criminal charges. There is a long way yet to go and this criminal effort may go nowhere, but when news stories about Goldman mention the names E.F. Hutton, Drexel Burnham Lambert Inc., and Arthur Andersen in the same breadth, the bank’s reputation clearly continues to be under siege.

Any hope that the fallout from the Securities and Exchange Commission’s civil charges and this week’s Congressional hearing would die down quietly has now vanished. While it may be some time before Goldman executives see the inside of a courtroom – if they do at all – a conviction has already been handed down in the Court of Public Opinion. And that is certainly the most immediate jury of all.

There is a reason that Goldman cited “adverse publicity” as a significant “Risk Factor” in its 2010 annual report. With every new development and every new story that emerges, Goldman stands to lose billions, if not tens of billions, of dollars in market capitalization. It’s more likely to see its best talent recruited away. And the bank’s more risk-averse clients could start to look elsewhere.

And if charges do, in fact, emerge, pension funds and other investment vehicles that have restrictions on where they can invest could be forced to pull their business. Sovereign wealth funds (SWFs) could run for cover as well, as foreign regulators become more emboldened.

Perhaps worst of all, Goldman, which two months ago had among the most powerful lobbying operation in Washington, is now in a position from which it is impossible to wield its once considerable influence. With the case for enactment of the Volcker Rule – a proposed regulation that would limit the ability of a bank to engage in proprietary trading – now growing to critical mass, Goldman is largely powerless to protect one of its most profitable lines of business.

While it’s too early to tell what’s next in this drama, there’s no denying that the Wall Street Giant turned poster-child for reform is facing a challenge unlike any it’s ever experienced.

Michael W. Robinson is a Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the world’s top crisis firm. He is also a contributing author to Bulletproof Blog™. Connect with Levick on Twitter: @Levick.]]> http://www.bulletproofblog.com/2010/04/30/criminal-investigation-ratchets-up-the-stakes-for-goldman-sachs/feed/ 2 http://www.bulletproofblog.com/2010/04/27/while-congress-looks-back-goldman-sachs-must-look-ahead/ http://www.bulletproofblog.com/2010/04/27/while-congress-looks-back-goldman-sachs-must-look-ahead/#comments Tue, 27 Apr 2010 13:22:44 +0000 Michael Robinson http://www.bulletproofblog.com/?p=2549 appear before the Senate Permanent Subcommittee on Investigations under the absolute toughest of circumstances. The investment banking giant is certainly no stranger to controversy, having taken more than its share of reputational lumps in the past.  But since the Securities and Exchange Commission (SEC) filed civil charges alleging that the bank hid details from clients investing in mortgage-backed securities, and then bet against those same clients, the public’s vitriol – and that of its elected representatives – has reached a new high.

Big bonuses, the recent SEC charges, and emails leaked over the weekend that appeared to show Goldman employees gleeful over the profits they might realize from the decline in the subprime mortgage market have combined to create the perception that the bank prospered while the public suffered.

Right or wrong, this point is sure to be leveraged by Democrats seeking support for a regulatory overhaul of the financial system. Meanwhile, becoming a face of greed is taking a toll on the bottom line as well. As of this writing, shares in the bank have fallen to $152 from a 2010 high of more than $185 earlier this month.

Making matters worse for the bank is the fact that, for much of the day, Goldman’s executives are going to have to sit back and absorb what promises to be the 21st Century equivalent of a public flogging in the town square. While the bank surely will have some salient points to make about the issues that underlie the SEC’s case, its course through this shoreline will be sharply constricted, given that the case is still pending.

All that said, one way for CEO Lloyd Blankfein and his team to end the day better than it started will be to look forward while everyone else is looking back. Simply put, the bank has to talk about how it plans to play a vibrant role as an engine of capitalism moving forward. By taking the focus off the money they made yesterday and putting it on the jobs, tax revenues, and Main Street wealth they will help create tomorrow, Goldman’s executives could shift the debate back to neutral ground.

And by highlighting the firm’s support of smart regulation, its decision to more closely align rewards with risk, and its initiatives to spur small business growth, Goldman can demonstrate that it has more in common with its inquisitors than many might think.

There was a time when Goldman Sachs involvement in a deal was seen as a blessing from on high. Right now, some are beginning to see it as a curse. But that doesn’t have to remain the case if the bank takes advantage of today’s opportunity to articulate the lessons learned from past mistakes and demonstrates how they can serve as the foundation for a return to prosperity – not just for Goldman itself, but for us all.

Michael W. Robinson is a Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the world’s top crisis firm. He is also a contributing author to Bulletproof Blog™. Connect with Levick on Twitter: @Levick.

]]> http://www.bulletproofblog.com/2010/04/27/while-congress-looks-back-goldman-sachs-must-look-ahead/feed/ 0 http://www.bulletproofblog.com/2010/04/23/bulletproof-interview-special-%e2%80%93-jonathan-orloff-on-earmarks/ http://www.bulletproofblog.com/2010/04/23/bulletproof-interview-special-%e2%80%93-jonathan-orloff-on-earmarks/#comments Fri, 23 Apr 2010 14:56:14 +0000 Michael Robinson http://www.bulletproofblog.com/?p=2517 continuing series of Bulletproof Blog™ video interviews with thought leaders across multiple disciplines and industry sectors, I recently sat down with Jonathan Orloff, President of Capitol Partners, Inc. and a longtime advisor to Senator Edward Kennedy, to discuss the current debate surrounding earmarks and his contention that they aren’t the symbol of bloated government they’ve been made out to be.

As Mr. Orloff says, one man’s earmark is another man’s funding for cancer research, advanced weapons systems for our fighting men and women overseas, or the myriad vital programs that depend upon Congressional support to survive. As such, they are a crucial part of the public policy process that have earned a bad rap for nothing more than serving as a funding mechanism in era of increasing government deficits and foreign debt.

As a Capitol Hill veteran who has worked for decades to secure government resources for projects that strengthen American infrastructure, security, and well-being, Mr. Orloff shared these insights and many more with Bulletproof™.

Click the video above to view Mr. Orloff’s interview in its entirety.

Michael W. Robinson is a Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the nation's top crisis communications firm. He is also a contributing author to Bulletproof Blog. Connect with Levick on Twitter: @Levick.]]> http://www.bulletproofblog.com/2010/04/23/bulletproof-interview-special-%e2%80%93-jonathan-orloff-on-earmarks/feed/ 0 http://www.bulletproofblog.com/2010/04/22/goldman-responds-in-kind-to-administration%e2%80%99s-digital-play/ http://www.bulletproofblog.com/2010/04/22/goldman-responds-in-kind-to-administration%e2%80%99s-digital-play/#comments Thu, 22 Apr 2010 18:23:27 +0000 Michael Robinson http://www.bulletproofblog.com/?p=2507 leverage recent charges filed by the SEC against Goldman Sachs in the digital space. In an apparent effort to rally public support for financial regulation, the digital team at the White House engaged in a paid advertising effort on Google that targeted a variety of key search terms, such as “Goldman Sachs SEC.” For much of the last week, users that clicked on the sponsored link that appeared were funneled to the “Organizing for America” website, where the Administration’s case for legislation that would establish “strong consumer protections and rein in the abuses that have been allowed to run rampant these past years” was plain for all to see.

As of this writing, however, a Google search for the term “Goldman Sachs SEC” brings up a very different sponsored link. This one directs users to GoldmanSachs.com, and more specifically, to a landing page that highlights the company’s key messages about the SEC charges. It seems that Goldman has borrowed a page from the Obama playbook and responded in-kind with a campaign designed for the Digital Age.

Goldman’s silence in the online space had been deafening throughout many of the reputational challenges the company has faced in recent months –   which likely made it all the easier for regulators, legislators, and the White House to paint a bull’s eye on its back. But by acting fast to rectify that situation with an, albeit modest, first step, Goldman has neutralized a massive messaging disadvantage and helped ensure that its voice is heard moving forward.

More important, Goldman has demonstrated to other companies that might be a bit behind the digital curve that there’s no reason they can’t catch up – and that they shouldn’t wait for a front-page investigation to do so.

]]> http://www.bulletproofblog.com/2010/04/22/goldman-responds-in-kind-to-administration%e2%80%99s-digital-play/feed/ 0 http://www.bulletproofblog.com/2010/04/21/freedom-of-speech-what-is-inconvenient-today-could-prove-invaluable-tomorrow/ http://www.bulletproofblog.com/2010/04/21/freedom-of-speech-what-is-inconvenient-today-could-prove-invaluable-tomorrow/#comments Wed, 21 Apr 2010 17:26:15 +0000 David Bartlett http://www.bulletproofblog.com/?p=2501 that’s exactly what an 8-1 Supreme Court majority just did. And they were right.

In its well-intentioned rush to outlaw videos of dog fighting and other forms of animal cruelty, Congress enacted a statute so broad that it would have made it a crime to sell a hunting magazine in any jurisdiction where hunting is illegal. That was too much for Chief Justice Roberts, who in writing for the majority, called the government’s defense of the law “startling and dangerous.”

As someone who spent years advocating for broadcasters in their battle against government regulation of broadcast news, the arguments on both sides of the issue reminded me again of what the First Amendment is really all about.

The First Amendment is intended precisely to protect the ugly and unpleasant forms of expression that most decent people find repugnant. The fact that majority-supported speech doesn’t need constitutional protection was one of the lessons learned from the decades-long battle against the so-called fairness doctrine, which gave government the power to control what radio and television broadcasters could say on the air.

Broadcasters fought these regulations with the simple argument that similar restrictions had long since been ruled unconstitutional when the government attempted to apply them to newspapers. Eventually the Courts agreed, noting that spectrum scarcity, the original justification for imposing tougher regulations on broadcasters, had long since been washed away by a wave of new technology. But the fundamental First Amendment argument was never far from the surface. Speech is speech, and the First Amendment states explicitly that “Congress shall make no law” abridging that freedom.

Some who are offended by the programming they see on television and hear on the radio, especially those concerned about the proliferation of conservative voices on talk radio, would like to see content regulation re-enacted. No doubt there are some in the corporate world who would like to see similar restrictions enforced on blogs and websites with whose views they disagree.

But in their well-intentioned zeal to make the airwaves, the Internet, and the corner newsstand safe for “respectable” points of view, these people overlook the fact that the same regulations they support today could be turned against them tomorrow.

The men who wrote the First Amendment could not possibly have imagined the profusion of communications channels available today – but they were foresighted enough to know that someone would always try to use the power of the government to regulate what others wanted to say.

As Chief Justice Roberts pointed out in his opinion, that’s simply unconstitutional.

David Bartlett is a Senior Vice President at Levick Strategic Communications, an expert communications strategist and crisis manager, and a contributing author to Bulletproof Blog. Connect with Levick on Twitter: @Levick.

]]> http://www.bulletproofblog.com/2010/04/21/freedom-of-speech-what-is-inconvenient-today-could-prove-invaluable-tomorrow/feed/ 1 http://www.bulletproofblog.com/2010/04/20/record-breaking-fcpa-sentence-highlights-the-benefits-of-cooperation/ http://www.bulletproofblog.com/2010/04/20/record-breaking-fcpa-sentence-highlights-the-benefits-of-cooperation/#comments Tue, 20 Apr 2010 19:14:57 +0000 Richard Levick http://www.bulletproofblog.com/?p=2483 $800 million fine. In 2009, it was the most FCPA actions ever brought by the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) in a single year. And in 2010, it’s yesterday’s news that a Virginia businessman has received the longest prison sentence ever handed down in an FCPA prosecution.

Charles Jumet, who pleaded guilty to charges that he bribed Panamanian officials to win maritime contracts for Ports Engineering Consultants Corporation between 1997 and 2003 and made false statements to federal investigators, received an 87-month prison sentence and a $15,000 fine from U.S. District Court Judge Henry Hudson yesterday. Assistant U.S. Attorney General Lanny Breuer hailed the decision as “a milestone in our efforts to deter foreign bribery” and confirmation that “foreign corruption carries with it very serious penalties, which can include substantial prison time for individuals who violate the law.”

That’s a powerful statement from the DOJ’s leading man on FCPA matters. But even more telling were the words of Judge Hudson, who told Mr. Jumet that had he not lied to U.S. officials about an $18,000 check written to a high-ranking Panamanian official, “my view of this case would be totally different.” While it’s important to note that the 87-month sentence was the minimum allowable under federal sentencing guidelines, it’s also important to remember that such a harsh sentence has never been handed down before. What all of this tells us is that being upfront and as cooperative as possible when FCPA violations come to light is a significant step toward the lighter side of prosecutorial and judicial discretion.

As was evidenced by the $185 million penalty levied on Daimler earlier this month (a relatively modest sum, given what we saw in the Siemens case mentioned above), judges and federal prosecutors have historically been far more lenient with companies that cooperate fully or that actually blow the whistle on themselves before an alleged FCPA violation is disclosed.

With recent comments by Assistant Attorney General Breuer echoing that sentiment, companies doing business overseas should now have all the evidence they need that honesty is truly the best policy when it comes to FCPA investigations.

Richard S. Levick, Esq. is President and CEO of Levick Strategic Communications, the nation's top crisis communications firm, and a contributing author to Bulletproof Blog. Connect with him @richardlevick.

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