Daily Archives: August 19, 2009

Some Tips on Formulating an FCPA Compliance Effort

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A recent article in CFO that noted that the Feds (are) Oil(ing) Up Their Antibribery Machine had some great tips for those of you looking to put a rigorous FCPA compliance effort in place — and minimize the chances that you, like Mr. David M. Pillor of Invision, will be slapped with a 65,000 civil penalty merely for being in charge of internal controls that failed to spot violations. (That’s right … you don’t even have to make, approve, or be aware of bribes to be charged! If you’re responsible for financials or compliance, and if the financials are found to be incorrect or your company found to be in non-compliance, thanks to recent acts, like SarBox, you can be prosecuted civilly.)

So if you want to avoid a dire, and expensive fate, be sure that your rigorous efforts to be compliant include:

  • background checks on business partners and third parties
  • a code of conduct for employees, suppliers, & agents
  • compliance training
  • effective internal controls
  • record-keeping systems that properly account for all overseas transactions
  • a hotline for whistle-blowers to anonymously report possible violations

And if a possible violation is discovered, working with your legal counsel, voluntarily disclose the violation as soon as possible. This will allow you to distance yourself from the responsible parties as soon as possible, avoid prosecution, and mitigate penalties. Considering that you could be slammed with a 1.6 Billion settlement, like Siemens AG, if the Feds find violations and prosecute, you want to do everything you can to minimize damages.

Are Your Customer Support Services Creating Risk?

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Editor’s Note: This post is from regular contributor Norman Katz, Sourcing Innovation’s resident expert on supply chain fraud and supply chain risk. Catch up on his column in the archive.

Outsourced supply chain services are very common these days. Freight forwarders, logistics providers, warehouse services, data integrators (especially those involved in Electronic Data Interchange), and the like all provide valuable skills in their respective specialty areas.

And they’ve all got to handle customer support communications (calls and e-mails) from their clients.

Whether or not it’s the nature of customer support personnel to be friendly and helpful, it’s certainly a (big) part of their job function. But when the desire to provide assistance crosses the line of expertise, the customer support person — and the company they represent or work for — can place the client at risk.

Often the role of the customer support person is one of objective knowledge, such as how to use a software application from a functional standpoint or to provide information about how their company’s products and services are utilized.

But when customer support advice crosses the line to be subjective, this is where trouble can occur.

Interpretation of a trading partner’s vendor compliance guidelines, knowledge of import/export laws, etc. are not typically areas of expertise that a customer support person is qualified to address. The passing along of bad advice can cause vendor compliance chargebacks or regulatory fines (if not worse) for their customers.

It’s very important that service-related companies educate and train their customer support personnel on exactly what questions they can and cannot field, and what answers they can and cannot provide. Front-line customer support personnel must also be informed that the kind refusal to answer questions not directly related to their company’s core products and services might evoke a harsh attitude from the calling customer, and in these cases the call should be transferred to a supervisor or manager.

Service providers would also do well to educate their customers as to realm of areas of information their customer service support staff are qualified to answer. Proactively informing customers in the sales contract and on the company web site what information the service provider is (and even is not) responsible for should help to mitigate calls in the first place.

It’s important to try and remove the burden of being forced to provide an answer from the shoulders of the front-line customer support personnel; these people should not feel pressured by an irate customer to provide unqualified answers, nor should they be made to feel or believe that they are not providing quality professional services by kindly refusing to answer questions outside their realm of expertise.

By educating their customers, the service provider is able to lower operating costs of customer support by reducing incidences of customer support calls outside of the knowledge area. This reduces the time customer support people spend on non-value-added phone calls and e-mails, and, if the service provider has a toll-free help line, reduces the phone bill by decreasing the number and length of calls they are paying for. The same level of customer support staff is now able to provide a higher-level of qualified service to customers in both faster response time and being able to stay with the customer longer to ensure their questions have been answered.

The desire to be helpful should not come at the price of increased risk for the service provider or the customer. Knowing where certain lines are drawn, and ensuring those lines are not crossed, helps mitigate risk for all parties involved.

Norman Katz, Katzscan