Global Compliance Case 16

Case 16

The first exposure is that until recently the firm was highly decentralized, with little central coordination or governance. The company neglected the importance of leadership because leaders play a significant role in shaping the organization’s ethical culture. Leadership brings with it the mantle of influence. When it comes to communicating and demonstrating a commitment to the organization’s values, no other factor is more important than its leaders. Leaders create and transmit ethical culture in a number of ways. The advice is to build a centralized governance to increase effectiveness.

The second exposure is that the company has offices in 42 countries. The different countries have different cultures. Thus, the company should build a global compliance program which could be applied to most of cultures and make it simple to understand.

Third exposure is that the company is a product of many mergers which increase the instability. The department before merging may have their own principles and laws and it may become difficult to adapt to new culture after merging. Thus training and communication are very important to help them solve these problems.

Last exposure is that the company is under IRS and UK Inland Revenue investigation for allegedly advising clients on overly aggressive tax-deferral strategies. The matter may come from the misconduct of the company or come from the culture and legal differences. Thus, in developing business in other countries, the company should investigate their laws first to see whether there exist legal differences. Also, independent audit department is necessary to ensure company is operated in an ethical way.