tag:blogger.com,1999:blog-53780919838595241962024-02-20T05:34:42.072-08:00Ethics WhispererThis a blog about ethics, compliance and integrity in organizations written by a lifelong ethics advisor. It is not the usual politically correct drivel about doing the right thing but an inside look at how ethical misfires happen and how to prevent them.Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-5378091983859524196.post-30972906386289369962015-02-16T15:27:00.002-08:002015-02-16T15:27:54.040-08:004 Myths about Compliance Program Assessment
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<br /></div>
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The first myth
about compliance program assessment is that it is an optional part of an effective
compliance program. The same sentence in the Sentencing Guidelines that
mandates a hotline also mandates compliance program assessment. And, even if
program assessment were not mandatory, it is would be incumbent on your
organization to undertake assessment. Organizations measure what is important
to them.<span style="mso-spacerun: yes;"> </span>If there is no call for
compliance program assessment in your organization, your compliance program is
not as important as it should be.</div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
The second myth
about compliance program assessment is that an internally conducted assessment
is as good as an externally conducted assessment. Internally conducted program
assessments are good and they are useful. But they are also conflicted. It is a
rule in audit - and should be a rule in compliance - that you don't audit your
own work. Both compliance and internal audit are part of the control
environment of the organization and both need to be periodically assessed
externally. This need not be an annual activity but there should be a fixed
schedule such as every 3 or 5 years. </div>
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<br /></div>
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The third myth
is that it is risky to have an external program assessment since it may turn
out negatively. It is true that an assessment that turns out positively is more
protective than one that indicates a flawed compliance program. But we have
seen more than one case in which a negative assessment, when paired with a
detailed plan of remediation, has forestalled a CIA or other enforcement
action. Why? The fact that you conducted and acted on a program assessment
indicates that your organization takes its compliance program seriously and
will remedy weaknesses without prodding from the outside.</div>
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<br /></div>
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A final myth
about compliance program assessment is that everyone uses the same standards.
While this may seem to be the case, different consultants interpret the
relevant external standards in widely different ways. The standards to be used
in your assessment should be fully disclosed before you choose an assessor. A
good assessment also includes bench marking. Boards and senior executives are
often indifferent to consultants’ opinions. But they are interested in real
information about how your organization stacks up against other like
organizations. For more information visit http://healthethicstrust.com/services/cpa/.</div>
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<br /></div>
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<br /></div>
Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-81998509924988396072014-09-21T14:46:00.000-07:002014-09-21T14:46:02.417-07:00Compliance Headhunters
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We are contacted by headhunters because we know a lot of
compliance officers and we know whether they are available. However, it is
extremely difficult to help these folks as they often have no idea what a
compliance officer does. They are generally working from a job description
written by someone in HR who also has little idea what a compliance officer
does. The essence of the job of a compliance officer is the ability to influence
others to do the right thing. This does not translate into a certain college
degree or work history. When describing a compliance position to a headhunter,
don’t forget to include BEHAVIORAL requirements and expectations. This will
save the headhunter and job candidates a lot of time</div>
Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com1tag:blogger.com,1999:blog-5378091983859524196.post-71861978461566340962014-09-07T17:14:00.000-07:002014-09-07T17:14:00.422-07:00Keeping upWhile there will continue to be new posts on longer topics on ethicswhisperer.com, I also encourage you to follow <a href="http://markpastin.com/">markpastin.com</a>, which is updated more frequently and focuses on issues of the day. Of course, your comments are always welcome on any of our sites.Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-86711353702285060382014-07-12T17:05:00.001-07:002014-07-12T17:05:15.302-07:00The Next Hot Word in ComplianceHear yea! Hear yea! Hear yea! The next hot word in compliance will be UPQUALING. This, of course, is on the model of UPCODING. Healthcare reform is a gamble on the idea that incentives can be given to lower the cost of care while maintaining or improving its quality. This has been tried before with limited success under the rubrics "managed care," "HMO" or "Medicare Part C." The problem is that these strategies have not been wildly successful at saving money and they run into the fact that folks just don't trust that the quality of care is the same. So reform is taking a two pronged attack by rewarding providers who <i>concurrently</i> lower costs and maintain or improve quality. This is the main idea behind ACOs and the Medicare Shared Savings Program. The problem with this is that quality is in the eye of the beholder - and, in this case, CMS is the beholder. CMS has done the only possible thing, and done it well, which is to prescribe a set of areas that are important to healthcare while being measurable. In other words, money will now follow quality as measured against this prescribed set of measures. When money follows coding, we get upcoding, which is one of the reasons compliance exists in healthcare today. But where is compliance with respect to the equally tempting risk of upqualing - fudging the numbers so the quality of your outcomes appears better than it really is? This is the next frontier and it will go by the awkward word "upqualing" - or so I am betting.Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-43729423173955478712014-02-09T13:03:00.001-08:002014-02-09T13:06:08.999-08:00A Big Compliance Mistake
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Secretary of the
US Department of Health and Human Services Kathleen Sibelius recently announced
that health plans offered through exchanges will not be considered Federal
health plans – and many breathed a huge sigh of relief. Not so easy.</div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
What the
Secretary's announcement means is that plans purchased through exchanges will
not be administratively under the oversight of CMS. This is a significant
burden avoided. But it is creating a false sense of security among plans and
providers who seem to think that this makes compliance an afterthought</div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
In the case of
many, probably most, plans purchased through exchanges, Federal dollars in the
form of premium subsidies are at issue. When Federal dollars are being spent,
the False Claims Act (FCA) applies. This means that although the health plans
offered through exchanges are not Federal health plans, they may have the same
exposure to both governmental and whistle blower FCA actions that anyone who bills
Medicare or Medicaid has. Not only do plans offered through exchanges have this
exposure, anyone who bills these plans also may have FCA exposure.</div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
Think about this
way. A company which manufactures bullets for the US Department of Defense is
not a Federal entity. While DOD may provide oversight, that is a matter of a
contractual relationship. But the bullet maker is certainly a potential target
of an FCA lawsuit if they bilk the government.</div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
I make it a
point to know members of the plaintiff's bar, and, believe me, they are
assuming applicability of the FCA to plans offered through exchanges and to
those who bill them. It will take a while to see how this works out but it
would be foolish to hug the Secretary Sibelius security blanket until this
works itself through the court system. Do we really expect the government to
demure if an exchange health plan defrauds the government?</div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
In practical
terms, this means that plans offered through exchanges have every bit as much
reason to have full-blown compliance programs as the hospital down the street. Similarly,
those who bill such plans should uphold the same standards as when they bill
Medicare.</div>
Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-3686436669039135262013-11-30T14:57:00.000-08:002013-11-30T14:57:01.332-08:005 Ethical Quandaries
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You may think
that challenging ethical issues are never really resolved.<span style="mso-spacerun: yes;"> </span>In my new book <i style="mso-bidi-font-style: normal;">Make an Ethical Difference</i>, I argue that we all have an innate ability to make sound ethical judgments. Not
only do we have an innate ethics sense, we can use it to resolve even the thorniest
ethical issues. Here are some examples of ethical quandaries that arise in everyday life, along with some tips on how to resolve them. Post your solutions here.</div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<b style="mso-bidi-font-weight: normal;">Five Ethical Quandaries and How to Think Through Them</b></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<b style="mso-bidi-font-weight: normal;">Quandary #1: An Offer You Can’t Refuse?</b></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
Just after your
current employer has promoted you and given you a substantial raise, you
receive an attractive job offer from a direct competitor. When you got your
promotion, you told your boss that you were “in it for the long haul,” but now
you are not so sure. You wonder if you should tell your boss about the offer.</div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">How to Think This Through</i></b></div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
You have to
decide if you owe loyalty to your employer and your boss. Even though your
current company promoted you, the promotion was based on merit, not loyalty. To
make an ethically sound decision, look at the situation in the eyes of the
other affected parties. If you were in their shoes, what would you expect? And,
more importantly, is this expectation reasonable? </div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<b style="mso-bidi-font-weight: normal;">Quandary #2: My Back Yard</b></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
A developer
wants to build a casino immediately adjacent to your neighborhood. You
recognize that the casino will benefit most of the community - except for those
who live adjacent to it. You wonder if it is right to oppose the casino based
on your interests and the interests of a few others in the community.</div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">How
to Think This Through</i></b></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
While you are
correct to consider the benefits to all concerned, there is more to the story.
You also need to consider the benefits of having a system of property use that
protects property holders. So it comes down to whether the benefits to the
community outweigh the benefits of protecting the rights of property holders.
Be sure to factor in your own bias as someone directly affected by the casino.</div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<b style="mso-bidi-font-weight: normal;">Quandary #3: No Pain</b></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
You are a doctor
and one of your patients who opposes euthanasia on religious grounds, asks you
to do whatever is necessary to stop his pain. The level of drugs needed to stop
the pain will almost certainly kill the patient in short order. The patient
recognizes this but still wants the pain stopped.</div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">How
to Think This Through</i></b></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
The ethical
rules of the patient prohibit euthanasia and yet you are being asked to
participate in actions having the same outcome as euthanasia. Consider your own
ethical rules on how to practice medicine. You are being asked to challenge
your own conscience in order to relieve the patient's conscience. This is not
just between you and the patient, but between you and your conscience.</div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<b style="mso-bidi-font-weight: normal;">Quandary #4: Bell Curve Blues</b></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
A scientific
experiment you conducted on inheritance seems to inadvertently show that people
of certain races are less intelligent than people of other races. You wonder
whether you should publish this research. You know that many will distort your
conclusions to support their own racist beliefs.</div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">How to Think This Through</i></b></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
While a
scientist is required to respect the scientific method, this does not mean that
you have to publish <i style="mso-bidi-font-style: normal;">everything</i> the
data supports. While you have to face the facts, you do not have to publicize
them especially if they are open to misinterpretation. You have to decide
whether the benefits of sharing this research publicly outweigh the likely fall
out from it. </div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<b style="mso-bidi-font-weight: normal;">Quandary #5: Speed Kills</b></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
The company you
work for is deciding whether to build a super fast car for street use. There is
a demand for the car and your company needs the boost this signature product
would give it. But you wonder if it is right to produce a car that capable of
travelling at two or three times any posted speed limit.</div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">How
to Think This Through</i></b></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
Consider the
interests of the parties to this situation While the interests of your company
are clear enough, you have to consider the interests of those who might be
affected if the car is built and sold. It is not only the drivers of superfast
cars that are injured by them. On the other hand, if your company does not
build the car, won't some other company make an equally fast car?<span style="mso-spacerun: yes;"> </span>Does this make a difference?</div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-23805164814054786492013-03-01T11:04:00.005-08:002013-03-01T11:05:35.697-08:00Career Traps Survey<div class="MsoNormal" style="text-align: justify;">
Over the past 12 to 18 months, we
spent a lot of time talking to compliance officers who had either been
terminated or were in danger of termination. We also spent time talking to
headhunters looking to fill positions that had been abruptly vacated. We wondered
if this career turbulence was due to a black cloud over our circle of
acquaintances or if the market had truly turned harsh. </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
To answer to this question, we
administered a survey to our entire email list with the promise that we would
report the main results to you. More than half of our list members who opened
the survey responded giving us reasonable confidence in the results.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
This is the report of the results
of the survey.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal">
After each result, there is brief commentary on the result.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
1. How long have you been employed by your current
organization in a compliance position?</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
less than 3 years <span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>24%</div>
<div class="MsoNormal">
3 to 7 years<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>33%</div>
<div class="MsoNormal">
more than 7 years<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>43%</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Of respondents, 76% were employed
by their current organization in a compliance position for more than three
years. Even 5 years ago, you could not have expected such a result, which
indicates that the field of compliance is maturing.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
2. As best you can estimate, the highest level compliance
position in your organization is:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Executive/Senior Vice President<span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>32%</div>
<div class="MsoNormal">
Vice President<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>34%</div>
<div class="MsoNormal">
Director<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>22%</div>
<div class="MsoNormal">
Department Head<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>
5%</div>
<div class="MsoNormal">
Manager.<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>
6%</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
If you make the assumption that
the top compliance position at an organizations should be at least at the Vice
President level, then 66% of respondents<span style="mso-spacerun: yes;">
</span>indicate that the level of the<span style="mso-spacerun: yes;">
</span>top compliance position in their organization is appropriate.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
3. Have you ever been fired from or forced out of a
compliance position?</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Yes<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>15%</div>
<div class="MsoNormal">
No.<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>85%</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
While there is no baseline
reference point this topic, 15% is a significant number of compliance
professionals who have left their organizations under adverse circumstances.
Remember that this is not just left the organization; it is fired or forced
out.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
4. I think my job is:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Very Secure<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>33%</div>
<div class="MsoNormal">
Somewhat Secure<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>54%</div>
<div class="MsoNormal">
Somewhat Insecure<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>
7%</div>
<div class="MsoNormal">
Very Insecure.<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>
6%</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
13% of respondents think their
job is insecure, with 67% believing that there is at least some level of
insecurity in their positions. While some respondents in the "somewhat
secure" category noted that there is a certain amount of job insecurity in
general, most comments pointed to specific reasons for the perceived
insecurity.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
5. Have you ever investigated a compliance complaint against
member of senior management?</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Yes <span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>53%</div>
<div class="MsoNormal">
No<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>46%</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
A majority of compliance professional respondents have
investigated complaints against senior management.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
6. If you answered yes to the preceding questions, what
happened when you did so.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The problem was resolved to your satisfaction.<span style="mso-tab-count: 1;"> </span>67%</div>
<div class="MsoNormal">
I had to leave the organization.<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>16%</div>
<div class="MsoNormal">
I stayed but was uncomfortable.<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>
13%</div>
<div class="MsoNormal">
I voluntarily changed employers.<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>4%</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Of those who investigated complaints against senior
management, 33% experienced adverse consequences for doing so.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
7. Have you ever considered becoming a whistle blower?</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Yes <span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>21%<span style="mso-tab-count: 1;"> </span></div>
<div class="MsoNormal">
No.<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>79%</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
A surprisingly high 21% of
responding compliance professionals have considered becoming whistle blowers.
While the open comments indicate that not all compliance professionals
considering blowing the whistle are thinking of a False Claims Act lawsuit,
many are.</div>
<div class="MsoNormal">
<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
----------</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
My reading of these results is
that there is a surprising amount of perceived job insecurity among compliance
professionals. The inherent frustrations of the position are indicated by the
number of respondents who have considered blowing the whistle on their
organizations. It is time for compliance professionals to take seriously the
idea that their employment should either be at the discretion of the board
and/or protected under a multi-year contract.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: center;">
Copyright 2013, Mark Pastin </div>
<div class="MsoNormal">
<br /></div>
Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-26143526899223067062013-01-28T13:35:00.000-08:002013-01-28T13:35:07.444-08:00Never Trust Anyone Who Can't Compound Interest
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<span style="font-family: Cambria; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: Cambria; mso-fareast-language: EN-US;">One reasons I have<span style="mso-spacerun: yes;"> </span>been able to stick with ethics so long
is that you get to meet a lot of interesting people, often on your<span style="mso-spacerun: yes;"> </span>own terms. As I wrote earlier, I have
even bumped into a few billionaires. Here is the story of one of them. I was
once hired by a friend of mine, who had made a tidy sum on land speculation, to
help his team develop a vision. This is not normal work for me, but it is not
abnormal work either. My friend's company focused on what is called
"raw" land, which means land that is not in use (excepting for farming)
and which is not served by utilities. In order to get the hang of the business,
I shadowed my friend to various meetings. My friends talent was to assemble a
bunch of raw land in which there was little interest, create a concept around
that land, and then get investors to buy into the concept. He had done this
with one really big (city sized) chunk that he wanted to sell to a big,
publicly traded real estate development company. I accompanied my friend to his
meeting with the CEO of the public company, then a billionaire by most
accounts, at which the deal would probably happen. The CEO offered my client a
princely price in cash for the land and double the princely price if my client
would accept payment in the public company's AAA rated bonds. It seemed too
good to be true. The only problem was that when the value of the bonds was
computed, the public<span style="mso-spacerun: yes;"> </span>company's CFO
incorrectly compounded the interest. At first I was<span style="mso-spacerun: yes;"> </span>certain I was wrong as I have to compound interest manually.
I have never been able to find the right key on a calculator. A half an hour
later, I was sure the CFO had made a mistake. My client asked me whether he
should take the cash or the bonds. It was here that I formulated one of my
basic ethical principles which is, "Don't do business with people who can't
compound interest." I told him to take the cash and he did. It was a good
thing since the public company, American Continental</span>
Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-62271334996422551132013-01-15T14:42:00.003-08:002014-07-18T10:48:50.926-07:00Dumb PoliciesI have tried to keep things pretty
high minded here, but I have to let off a little steam. <br />
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
I probably spent half of last
year reading ill-conceived policies and procedures. Reading policies is part of
my job and I always try to take a fresh look at any policies I am asked to read.
Now healthcare organizations often have no idea what policies they have. I
guess this tells you how important the policies are to the day-to-day
activities of the organization. I read one policy that was nearly 100 pages
long, obviously drafted at great expense by outside counsel to the
organization. How truly DUMB<span style="mso-spacerun: yes;"> </span>do
you have to be to write 100 page policy!!!! And the organization paid for this exercise
that would have received a C- in law school. GRRR!!!!!</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Why are we writing these
policies? Why doesn't it matter to the people who write them if anyone can
understand them.<span style="mso-spacerun: yes;"> </span>I think a lot of times
the person writing the policy imagines themselves waving the policy in front of
the jury or a prosecutor and saying, "You can clearly see that we don't
condone this!" In 40 years in this business in every type of situation you
can imagine, I am 100% certain that this situation has never arisen.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
I hold the compliance officers to
blame too. Part of your job is get employees and others to act in accordance
with the policies and procedures. If no one, including you, can actually
discern what the policy says, how can you hold people accountable to these
policies?</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
I actually think it might be
better to run a company with no policies and procedures and hold people
accountable for their decisions. Would there be legal risks in doing this?
Sure. But it might be worth it to have a company in which people are
accountable.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
copyright 2013 Mark Pastin </div>
Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com1tag:blogger.com,1999:blog-5378091983859524196.post-58735280132240908722012-11-05T13:21:00.001-08:002012-11-05T13:25:58.110-08:00The Psychology of Reporting<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
Two psychology experiments give great insight into why employees find it hard to disobey their immediate supervisor and report compliance concerns. The experiments are as follows: </div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: .25in; text-align: justify;">
Stanley Milgram, a Yale University psychologist, designed an experiment
in which a volunteer (the "teacher") was instructed as part of the
experiment to deliver an electric shock to a subject (the "learner")
when the subject gave the wrong answer to a multiple choice question. The volunteers
believed that "teachers" and "learners" were randomly
assigned their roles, but the "learners" were actually accomplices of
Milgram. The "learner" was placed in another room where the
"learner" could not be observed or heard by the
"teacher".<span style="mso-spacerun: yes;"> </span>Each time the
"learner" gave an incorrect answer, the “teacher” was instructed to
shock the “learner”. The level of the shock increased with each incorrect
answer, ranging from a modest 15 volts up to a monstrous 450 volts. The 450
volt shock was described to the "teacher" as a "dangerous severe
shock". The "teacher" was given a mild shock so he would get a
sense of what the "learner" would be experiencing when the
"teacher" delivered a shock. Unbeknownst to the "teachers",
no real shocks were delivered to the “learners”, who could not be observed by
the “teachers”.</div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: .25in; text-align: justify;">
For each trial, the "teacher" was supervised by a confederate
of Milgram's dressed in a lab coat to convey the sense that he was an
authority. "Teachers" were repeatedly reminded of the importance of
the experiment and told that not completing the trial would invalidate the
whole study. Most of the "teachers" eventually administered huge
"shocks" to the "learners". At 300 volts, some of the
"learners" were told to kick and scream loudly enough to be heard
through the wall by the "teacher". A few "teachers"
objected or dropped out of the experiment at this point, but most
"teachers" ended up delivering the maximum shock of 450 volts to the
"learner". The experiment, which has been replicated several times,
has been taken to show the extent to which an authority figure, in the case the
person in the lab coat, can persuade otherwise normal individuals to inflict
terrible pain on others.</div>
<div class="MsoNormal" style="line-height: 150%; margin-left: .25in; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
Philip Zimbardo,
a Stanford psychologist conducted a related experiment.
</div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: .25in; text-align: justify;">
Zimbardo divided a group of volunteers into two groups of equal size,
"guards" and "prisoners". The volunteers were told that
they would participate in a two week simulation of prison life. Both
"guards" and "prisoners" received uniforms appropriate to
their roles. The uniforms given to "prisoners" were even more
demeaning than those used in most real prisons. "Guards" received
"training" on the essentials of their roles, while prisoners were
given prisoner numbers and cell assignments. "Guards" were told to
maintain obedience on the part of "prisoners", while
"prisoner" were addressed only by their numbers. A prison “warden”
and “superintendent” (Zimbrado himself) were appointed. All of this occurred in
a mock prison in the basement of a Stanford University building. The
participants were able to leave the premises at any time without anyone’s
permission, and yet none did so. (Some volunteers experienced such high levels
of distress that they were "released" early by Zimbardo.) The volunteers
were so committed to their roles that "guards" struck
"prisoners" with billy sticks and forced them to clean toilets with
their bare hands - and the "prisoners" complied. The experiment was
terminated after six days when an outsider observed how far things had gone and
told Zimbardo that he had to stop the experiment. </div>
<span style="mso-spacerun: yes;"> </span><br />
<div style="text-align: justify;">
<div id="ftn">
<div class="MsoFootnoteText">
<span style="mso-spacerun: yes;">Both of these experiments show the power of organizational roles. Since "employee" is the predominant work-related role for potential reporters and hotline users, you can see why our task, which involves defeating that role response, is difficult.</span></div>
</div>
</div>
Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-7324146449817176072010-04-28T07:26:00.000-07:002010-04-28T08:13:50.038-07:00Amateur Hour In Compliance?I am often asked whether corporate compliance is a profession. Since my organization has been certifying compliance professionals for almost 30 years, my bias is clear. But there are good arguments on both sides of this question. One thinks of the scene in “My Cousin Vinny” in which Joe “Vinny” Pesci describes himself to the judge as a “para-lawyer”! Along these lines, I have heard it said that compliance officers are simply a large group of people practicing law without a license. Is this really the bottom line?<br /><br />To answer this question fairly, we need to ask what makes law, accounting and medicine professions, while sailing, cooking and painting are not professions, at least for most of us. Theologian William F. May is often considered the authority on profession. He argues that the root of the term “profession” is “to profess” so that a professional is someone who has a core, specialized knowledge base which she or he is expected to profess authoritatively. Thus, doctors are trained in medical science, lawyers in the law, and accountants in standards of financial reporting. Chefs, on the other hand, have skills and a body of practical knowledge but, one might argue, no body of special knowledge not accessible to anyone who tries to make the donuts.<br /><br />This is a real bone of contention in a society in which everyone wants to be a professional something or other. There is no question that the word “profession” is being generously applied to activities as varied as being a politician and being a cab driver. To be called a craftsman, skilled amateur or, even worse, layperson to invite low pay and less respect. One is inclined to ask what is so bad about being an amateur, someone who engages in activity for the sheer love of it. Social bias aside, there is a difference between a craftsman, such as a carpenter or shoemaker, and a professional. And part of that difference is a body of knowledge as opposed to a set of skills. <br /><br />But that is not all the difference.<br /><br />In addition to having a specialized body of knowledge, a professional adheres to a set of standards dictated by the domain of his or her knowledge, without exception and beyond the pressures of practical advantage and job. A lawyer who works for a company is still an officer of the court and is obliged to observe basic standards, such as not advising his/her client on how to break the law (and get away with it). Similarly, accountants are allowed to tell you how to best report financials and fill out your tax form, but they can not assist you in falsifying your financials or avoiding taxes you actually owe. I am not saying that lawyers and accountants always observe these standards; I am saying that we expect them to if they are to be regarded as professionals. <br /><br />Where does that leave corporate compliance? <br /><br />When one thinks of a body of compliance knowledge, the Corporate Sentencing Guidelines for Organizational Crime are the initial reference. The Guidelines became effective in November of 1991, and, although slightly modified subsequently, remain essentially unchanged. The Guidelines outline the elements of an “effective compliance program” that organizations should have in place if they expect leniency when sentenced for a crime. It is fair to say that no compliance officer can be considered competent if he/she is not familiar with the Guidelines and the extensive body of knowledge that has grown up around them. The Guidelines are now recognized across industries and agencies as the baseline standard for compliance programs.<br /><br />But there is more to the body of compliance knowledge than the Guidelines. The Guidelines themselves codified a body of knowledge that had developed concerning corporate compliance in the decade prior to issuance of the Guidelines. Corporate compliance programs, which are more often called corporate ethics or integrity programs outside of healthcare, had assumed a specific form over years of experience mainly earned by government contractors partnering with the federal government in fighting fraud. Just as the Treadway Commission (Committee of Sponsoring Organizations of the Treadway Commission) was more of a codification of financial reporting standards than a creation, the Sentencing Guidelines did little more than sanctify a stable body of knowledge, a body of knowledge that continues to develop at a rapid pace.<br /><br />So the argument that there is a body of knowledge underlying compliance seems safe. Even though there are many specializations within this body of knowledge, such as research compliance, health plan compliance and even VHA compliance, the core requirements of compliance as part of a system of internal controls constitute a stable body of knowledge capable of on-going growth and refinement.<br /><br />But is there a related set of behavioral standards? It is in this area that compliance truly distinguishes itself as a professional endeavor. Let’s start with a simple question: Since both the legal profession and compliance concern themselves with laws and regulations, how are these endeavors different? And is this relevant to the status of compliance as a profession?<br /><br />The behavioral standards for a lawyer derive from the lawyer’s primary role as an advocate for the interests of the client in the legal system. The lawyer is to put these interests ahead even of the personal interests of the lawyer (e.g., in getting paid) but only up to the point of not leading to violations of the law beyond those already committed by the client. In a corporation or other organization, the lawyer’s client is the abstract entity which is the corporation itself. The lawyer is an advocate for the corporation in legal matters.<br /><br />By analogy, the behavior of a physician or other medical professional is to be guided by what is in the best interests of their patient from a health viewpoint. The patient’s health interests are to take precedence over any other interests that the medical professional may have and should always be paramount in the medical professional’s mind.<br /><br />The behavioral standards for a compliance officer derive from compliance officer’s commitment to being an advocate for the integrity of the organization’s conduct with respect to all of its constituents. Specifically, the compliance officer is expected to advocate that the organization keep its word, including its promise to observe laws and regulations, or accept responsibility for those cases in which it does not or can not keep its word. Since organizations are composed of people, there will always be an error rate even in basic integrity. While the lawyer advocates the client’s interests, the compliance professional advocates the interests of integrity, even if this interest is disadvantageous to the organization in the short run.<br /><br />That is why our certification program for compliance professionals tests for more than a core body of knowledge. For example, we ask those who seek certification as VHA compliance professionals how they will handle a situation in which they raise a compliance issue with their management and do not believe there has been adequate follow through. While there are many correct answers to the question, the common denominator is that all involve advocating an honest outcome.<br /><br /><span style="font-weight:bold;">This is also why the US Department of Justice and US Department of Health and Human Services have been adamant in their belief that the compliance function should not report to the legal function. In the face of a violation of law by an organization, an attorney’s guidance system shifts to defense while a compliance officer’s inner compass says “own it” by disclosing and correcting. These are both valid professional instincts but they are in fundamental conflict in some cases.<br /></span><br />One of the reasons that the professional status of compliance is questioned is that so many of its practitioners bring the passion of the amateur to their work. But this should be viewed as the commitment of those fighting for standards that are not yet universally recognized rather than as the enthusiasm of the untrained. There is no reasonable question as to the professional status of compliance professionals, no matter how much those who are members of professions advocating narrower interests may complain.<br /><br />Mark Pastin, Ph.D.<br />President, Health Ethics Trust<br />Council of Ethical Organizations<br /><br />copyrighted to Mark PastinMark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com1tag:blogger.com,1999:blog-5378091983859524196.post-42047789119086188672010-03-01T06:41:00.000-08:002010-03-01T06:46:52.946-08:00Mysteries of Healthcare Reform1. Why are health insurance premiums going up?<br /><br />All companies raise prices to insure against future uncertainty. With healthcare reform targeting health plans, the plans are trying to position themselves to withstand a shit storm of legislative stupidity.<br /><br />2. Why do health insurance companies have (limited) anti-trust exemptions?<br /><br />These exemptions were intended to lower the price of health insurance and force companies to cover remote groups. For example, in rural areas where people are dispersed and may not form natural groups, it was unappealing to write health insurance. The anti-trust exemptions are intended to make it more appealing to write these groups by giving the companies a larger pool over which to spread the cost.<br /><br />3. Why do drugs cost more in the US than elsewhere?<br /><br />Drug companies are forced to sell at low and below market prices in Canada and Europe by their government-run healthcare entities. The costs of developing and marketing new drugs is pushed back on US consumers. Our government is supposed to impose tariffs and trade restrictions on foreign countries who control the prices of our products in this way, but refuses to do so. So your grandmother is buying inhalers for German skiers. Nice. Why won’t our government address this issue? The emperor does not enjoy standing naked.<br /><br />Wouldn’t it be nice if we could talk about what really needs to happen in healthcare instead of engaging in a political shadow dance?<br /><br />copyright Mark Pastin, 2010Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-60341851994666960072010-02-16T06:59:00.000-08:002010-02-16T07:08:00.538-08:00Compliance Tea Party - Hold the SweatenerHealthCARE reform is dead. Even the administration no longer uses the term. Did you notice the unexplained shift from healthCARE reform to health PLAN reform? The public does not want government run healthcare. The Obama administration thought it could pull off what the Clinton administration couldn't. Wrong.<br /><br />Why switch to PLANS? Well, who ever met an insurance plan that they could love? So let’s demonize the plans now. That’s the ticket. Health plan compliance professionals take note: You get busy once your industry is put on the 10 Most Wanted list. Ask your friends in pharma.<br /><br />This is tragic, as there are things that need to get done in healthcare. We have to do something about those in the 55 to 65 age group who can not afford health insurance – often $25K a year and up - should they retire or lose their jobs. We have to quit driving drug prices up by forcing the pharmaceutical industry to massively subsidize European and Canadian healthcare. We have to simplify the rules of existing government sponsored programs such as Medicare and Medicaid so the funds in these program actually go to healthcare. And could we have some fraud enforcement in government programs targeting uninsured kids?<br /><br />Defeat is not readily accepted here in DC. So expect to see additional evidence that you are a bunch of fraud committing, patient abusing, white collar criminals. I was amazed to learn that a bunch of compliance officers paid real money to have the government read them month old press releases saying what naughty boys and girls they were at the Intergalactic, Hear-It-To-Believe-It Fraud Hoe Down - or whatever it was called.<br /><br />Those of us in compliance will not rest until fraud is reduced to as close to ZERO as is humanly possible. But we will never achieve that goal unless we are given some credit for what has been accomplished to date in fraud fighting – and we have accomplished quite a lot. I think I individually contribute to global warming when I hear that we have accomplished nothing and that the government needs an even bigger stick just to keep us in line. My message on this is that the compliance community and the government should be on the same page on this one. Could we please just get along?<br /><br />copyright Mark PastinMark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com1tag:blogger.com,1999:blog-5378091983859524196.post-64837681062966960232009-07-22T07:29:00.000-07:002009-07-23T05:44:20.381-07:00Medical Ethics - Kid's Rights?From time to time I create medical ethics cases, which are copyrighted, on which I would like comments. The deal is that I will post a "solution" in a later blog update. I would like your comments and will publish or not according to your wishes. Give me you comments on this one.<br /><br />Whose Witness?<br /><br />You are working in the ER when a minor comes in who has been seriously injured in a car accident. The child, who is accompanied by his parents, shouts repeatedly, “I don’t want to die.” Immediate surgery is required and you explain the situation to the parents. They advise you that they belong to a religious group which does not permit transfusions and would rather you didn’t perform surgery if a transfusion is necessary. The mother begins to cry and shout at her husband who removes her to a waiting area. The father returns and tells the physician that they would like the surgery but can not permit a transfusion. He returns to the waiting room. There is no time for an ethics consult or any other type of consult for that matter, so the decision is yours. You see no prospect of success with the surgery absent a transfusion and the child will certainly die without the surgical intervention. What is the best course of action?<br /><br />This is an actual case presented to me for advice and is not uncommon. Of course, there could be any number of extenuating circumstances and additional details. But please address the case on the basis of the information provided. There will be an analysis of this case in a later blog entry.Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-16307725546109610712009-05-13T06:58:00.000-07:002009-05-13T07:26:17.238-07:00Golf and EthicsI think I am in a good position to comment on the much hypothesized link between golf and ethics. There is no such link. It is total poppycock. Shivas Irons - nice try and you did sell some books. You are as likely to meet a cheating scumbag on the golf course as you are in your the investment banking interest group of the Young Presidents Organization. In fact, you will meet many of the same folks. That does not mean that young people can not learn something about ethics from golf; they just can not learn to BE ethical. I have played golf for more than 50 years and practiced ethics for 36 years. I learned the most about ethics from golf between the ages of 12 and 16. At this age, I weighed 90 pounds max and grew to the startling height of 5 feet, five inches. I played a muni called Sylvan Heights that was run by the city and populated by blue collar golfers, my dad (a certifiable golf nut), hoods, my high school golf team, professional gamblers - amongst others. I played golf everyday of the short summer with anyone who would play with me. I was a very good golfer and a fantastic golfer for my munchkin-like size. And I gambled with everyone because that is what golfers do to add fun to the game. Once I had a guy named "Beak" Mirani down $3,000 and I learned fast that winning too much can be dangerous- especially if you take advantage of someone else's gullibility - Beak did not believe that such a little spud could be so good and so mean at the same time. I learned a lot of other things. I played golf with a guy who married vulnerable women for their money. I played with a woman who sought rich men for the same reason. I learned how adults think and act and I have carried the lessons with me to this day. Did I learn to be ethical? No. I learned to be tougher than anyone who thinks I treated them unethically. Now to my golfer friends, I do not wish to offend thee. But to pretend you are engaged in a mystical activity when you are really only contributing to chiropractic is silly business. I did learn about ethics at some point I hope but not from golf.Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com1tag:blogger.com,1999:blog-5378091983859524196.post-56368709958722098232009-02-06T14:27:00.000-08:002009-02-06T14:29:58.376-08:00HR's Evil EmpireHuman Resources is often the bane of employees and compliance professionals alike – the HR Catberts and squids of corporate life. Although HR professionals don’t like to hear this, their domain is often called Fortress HR, the Evil Empire and The Avengers. These titles are often well earned. Well, it isn’t entirely their fault.<br /><br />Many HR professionals start out trying to make the organization a better place to work – a place with a culture that attracts high performing employees. But HR professionals soon learn what is truly expected of them. The first blow is that many organizations make no distinction between Personnel and HR. So the HR professional spends an inordinate amount of time dealing with benefits issues. And then the HR professional get her/his first real HR question when a manager asks how to go about firing an employee with slim evidence of non-performance. HR becomes the hangman’s apologist. An HR professional who handles all of this may be allowed to participate in mass firings, benefit cuts, demotions – everything short of genocide.<br /><br />After years of never getting to do their job, many HR professionals become bitter and petty. And then along comes big-stick corporate compliance.<br /><br />The first battle is the hotline. It quickly becomes evident that HR is concerned about compliance learning about all of HR’s malfunctions via the hotline. Since compliance relies on HR to handle many investigations, it often becomes clear that HR couldn’t care less about anonymity promises made by compliance. And then you have to deal with the fact that HR does not want to punish the supervisors and managers for retaliating against reporting employees. This is war.<br /><br />I can not tell you that I know of a way to avoid this sort of situation.<br /><br />But there are things you can do to improve the situation. The first is to let the HR professional know that you understand what he/she really wants to be doing. One part of every compliance officer’s job is culture change – and this is like music to HR’s ears. You can also try to get HR involved in the process of incorporating compliance related measures in the performance appraisal system. If you first raise this issue at a committee meeting, HR is sure to swat you with alleged impossibility of measuring compliant conduct. So let HR have the bright idea in the first place.<br /><br />Of course, there are HR professionals who are too far gone to be redeemed. You can always check their travel vouchers, expense reports and contracts with vendors. Ah, Fortress Compliance!Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-68973983338183814672009-01-23T08:24:00.000-08:002009-01-23T10:17:56.228-08:00Of Mice and Lawyers<div style="text-align: justify;">One puzzle of current attempts to defang the compliance function is why it seems to some, particularly members of the Legal Department, a good idea to have the Chief Compliance Officer report to the Legal Department. The idea would be laughable except for the fact that it is carrying the day. This is one of the few things in compliance that can be made perfectly clear.<br /></div><br /><div style="text-align: justify;">Go back to the beginning which is the Federal Sentencing Commission in the mid-1980s. The country had survived the scandals in the defense industry but was in the throws of economic collapse at the hands of a sick financial system run by scoundrels. Some folks refer to this as “the S&L Crisis” which was thought to be the financial crisis to end all financial crises. Maybe not.<br /></div><br /><div style="text-align: justify;">In response to this perceived increase in corporate misconduct, the Federal Sentencing Commission decided to develop guidelines for sentencing companies convicted of criminal conduct. It was intended that such companies be assured of suitable and consistent punishment.<br /></div><br /><div style="text-align: justify;">But the Commission conceded the obvious fact that even the best corporations may have individual members who do reprehensible things in the name of the corporation. Thus, the Sentencing Guidelines specified a model of what counts as a good citizen corporation even in cases in which an individual or individuals have committed crimes in the name of the corporation.<br /></div><br /><div style="text-align: justify;">The idea is that good citizen corporations will have ethics or compliance programs designed to detect, prevent and correct misconduct by individuals prone to wrong doing even at the highest levels of the corporation. The Commission defined an effective ethics or compliance program as including seven elements which are now the recognized building blocks of all reputable ethics and compliance programs.<br /></div><br /><div style="text-align: justify;">The Sentencing Commission was not under the delusion that savings and loans, banks, and brokerages had committed wrong doing because their legal departments were understaffed. In fact, they had armies of loophole seeking, regulation side stepping attorneys. It was obvious to all that legal departments had failed to detect, prevent and correct the wrong doing that resulted in the economic crimes of the late 1980s and early 1990s. An additional system of checks and balances was to be instituted to allow members of the organization to point out wrong doing at even the highest levels of the organization and without fear or retaliation from those high levels – even if those high levels include members of the legal department. The Commission was not trying to add staff to the legal function but instead was trying to add a separate element to a system of check and balances.<br /></div><br /><div style="text-align: justify;">This is not to say that lawyers can not or do not make good compliance officers. Some do and some don’t. Former Naval Commanders, former CEOs, the theologically or philosophically trained, CPAs, internal auditors, social workers and many others sometimes make good compliance officers. But none can succeed if they are thwarted by an ill-conceived organizational structure that places them in the executive team’s harem.<br /></div>Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-62524512820876714402009-01-20T06:14:00.000-08:002009-01-20T06:18:47.787-08:00The Zen of Then<div style="text-align: justify;">While I am as dedicated a golf nut as anyone, even I can not believe the idiocy that passes for advice among pros and hackers alike. In terms of mental gurus, we have gone from a name dropping “boy toy” to a platitude machine with hair by Devo. All of this mental coaching comes down to one thing: Be in the present. Professional golfers pay mental coach quacks tens of thousands of dollars to tell them: Be in the present. I am going to tell you the whole truth about this.<br /></div><br /><div style="text-align: justify;">At any given time, such as now, you can only BE in one time – the time that it actually is. You can not BE in the future and you can not BE in the past. That is how time works. On the other hand, there are three ways to be in the present. 1) You can presently be reflecting on the past; 2) You can presently be anticipating the future; or 3) You can presently be concentrating on what you are doing. Here is the punch line. You do most athletic things better if you concentrate on what you are doing.<br /></div><br />There it is. The whole tamale. The zen of golf in one cracked egg shell.<br /><br />Now will you please pay me to tell you to concentrate on what you are doing?<br /><br /><div style="text-align: justify;">In fact, the only endeavor with more quacks than golf and herbology is ethics. Darn it now. Would you just do the right thing: ask what your mother would think; ask how you would feel if you read in the morning paper; explain it to your kids. How about:<br /></div><br />Get a brainMark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com1tag:blogger.com,1999:blog-5378091983859524196.post-70193402083782493722009-01-16T07:24:00.001-08:002009-01-16T09:25:11.145-08:00Billionaires I Have Known Pt. II have worked directly for two billionaires and against another. Let me tell you the "against" story. When I lived in Arizona a lot of my consulting business focused on real estate developers, mortgage lendors and crooked politicians - the bread and butter of the AZ economy at the time. One of the real estate firms - mid-sized and successful - hired me for whatever reason - I am not sure. One day the head of the firm is off to sell about $20M in land to a famous and infamous AZ billionaire and asks me (!) to go along. So we are sitting down with me and Mr. Land across from Mr. Big and Mr. Big's CFO. Mr. Big offers Mr. Land $20 M in cash for the land or $40M in his company's AAA rated bonds. I am talking to Mr. Big's CFO on the side to figure out if the cash or the bonds are worth more given the maturity of the bonds. I have always been a boob at operating calculators and have never been able to make the compounding function work on those old TI machines. So I am compounding the interest manually!!! And then I realize that the CFO is making big mistakes - in my client's favor no less - on this simple task. So I go back to my client and say, "Take the cash or I'll kick your ass." He thinks I have flipped. My reasoning is that if Mr. Big's CFO is worse than I am at compounding interest, the bonds are worthless - AAA rating or not. I made such an insane fuss, worthy of Tom Cruise, that Mr. Land took the cash, left the meeting and fired me two days later. One year lart, Mr. Big was at the center of the savings and loan crisis and the bonds were worthless. Two years later he was in a pink jumpsuit. But Mr. Land never hired me back. In hindsight, he was the one who saw through Mr. Big. Well, I got paid so that is fair enough I guess.Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com1tag:blogger.com,1999:blog-5378091983859524196.post-85661630666180682322009-01-15T05:35:00.000-08:002009-01-16T05:37:28.002-08:00Healthcare Execs Cry WolfThe morning paper brings this news: Obama Seen Signing SCHIP Bill quickly. This means $35 billion more for healthcare in 2009. I opined on the company's (Health Ethics Trust) list serve that healthcare organizations are using the general economic downturn as an excuse to get rid of perceived dead wood - and to cut back on ethics and compliance efforts that were never near to the hearts of healthcare executives. This $35 billion is one example of what I was talking about. This is not emergency funding. It makes federally backed healthcare available to children in families with up $84K in taxable income. I can remember when that was much more than a full, tenured professor of business (Me!) earned - and I never considered myself a welfare case. Healthcare is not only not banking or retail; it has something to gain from the suffering in these other sectors - cheap money. So let's not make a bad situation worse by faking a headache when we just want to kick ethics and compliance out of bed. The federal government is in fact pouring money into healthcare at unpredented rates, taking actions that dramatically lower the cost of debt, and driving salaries downward. Does this sound unequivocally bad for healthcare? On the other hand, there is much less good news for health plans at this point as their role in further socializing medicine is so far unclear.Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com2tag:blogger.com,1999:blog-5378091983859524196.post-85982949432293822632009-01-14T05:58:00.000-08:002009-01-14T06:12:06.718-08:00Anatomy of Evil - FunEvery once in while I read a book that sticks with me. It can be anything. One book I enjoyed immensely is The Gold Coast by Nelson DeMille, the purest anatomy of delicious evil in my recollection. DeMille is not a writer of "great literature." He writes for people and not professors. The central character is a very straight, very upright tax attorney who personifies the compliance officer. Both he and his Brahmin wife are swayed off their moral centers by a lovable, persuasive mafia capo. DeMille has a sharp sense of ethics and corruption. His old book, Word of Honor, is a terrific read and quite moving. It teaches so much about young people used to wage war. It too has the power to change your thinking. I could teach everything I know about ethics and compliance from these two books and it would be a lot more interesting and effective than teaching the code of conduct!Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-32527935637391481652009-01-14T05:35:00.000-08:002009-01-14T05:40:31.442-08:00The Dog That Didn't BarkMore on gifts and such. If you want to train a dog to do anything, you first train it to sit and stay. Trust me on this as I have three little beauties. Why? If the dog doesn't respect your authority in this matter, you are unlikely to train him/her to do really difficult things like not eating the other dog's food. Now the job of a compliance officer is to train the members of his/her organization not to cross certain lines. You are in the invisible fence business. Now if you can not convince the organization to accept a specific dollar limit on the value of gifts, you are unlikely to get key managers to avoid hair brained schemes that promise to make them rich. You have to win one battle to show that you have the authority to set some boundaries. When I see codes and policies that talk about gifts being limited to what is usual and customary or reasonable given the circumstances, I take that as a sign that the organization may be beyond hope. If I get hired to help, we may well start with a gift policy.<br /><br />Once upon a time, a senior executive of a publicly traded healthcare company was sent a St. Andrews putter - gold plated with his name on it - by a vendor, the company's law firm no less. He wanted to keep it so badly he teared up. He then told his admin to send it back to the vendor who had given it to him. The admin immediately told the other admins what happened - "They have gone completely crazy over this ethics stuff; Mr. X actually sent back a St. Andrews putter." And the organization was changed.<br /><br />I, however, can accept the putter. So be kind!Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com0tag:blogger.com,1999:blog-5378091983859524196.post-39503870881689490602009-01-12T13:29:00.000-08:002009-01-12T13:37:10.939-08:00Incense, Peppermint, Crooked MankindThe first question is: Why do this?<br /><br />It is certainly not because I need things to do. It does seem to me that there cannot be many people who have spent more than 35 years providing what is variably called “ethics” or “compliance” advice. I have had the chance to see organizations and executives in serious trouble, in denial about the possibility of being in trouble, and, sometimes, doing the right thing. One thing I have learned is the endeavor of giving ethics-compliance advice is seldom about content. It is mostly about psychology. Specifically, it is mostly about getting people to do what they already think they should do in an environment that punishes correct conduct. So I hope to tell folks a little bit about ethical influence in the coming days and weeks.<br /><br />Which brings me to topic A. Why all the blather about gifts, meals, entertainment, tickets, flowers, cookies, meals, drawings, free rides and the other dross of corporate life? Surely this stuff is not all that important! Why then do compliance officers spend a good part of their lives answering questions and picking nits about this crap? After a while, compliance officers are actually pummeled into debating dollar limits (per event, per month, per year ……..) and the fine differences between tickets and chocolates. From the viewpoint of corporate conduct, this is all nonsense.<br /><br />And yet there is absolutely, positively no topic of more importance in compliance. More on this next time.Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com5tag:blogger.com,1999:blog-5378091983859524196.post-50917974273662682722009-01-08T16:26:00.000-08:002009-01-09T11:04:13.328-08:00Welcome to our new blog!The Ethics Whisperer is under construction and will be live in the coming days.<div><br /></div><div><br /></div>Mark Pastinhttp://www.blogger.com/profile/01176488855209921121noreply@blogger.com3