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International experts - Published: 04 October 2018
Imelda Alvarez Estrada
CEO & Founder, Comply Latam S.C. - Mexico City

Knowing that a compliance officer or other leader in the company will say “no” to a high-risk proposal, gives you the confidence to move faster in the business decision-making process.

To ensure that the company Compliance Officer becomes an internal business partner, it is important to advise on “how” things can be done instead of just placing obstacles by saying “no”.

We can accomplish this in most cases in a company where there is a mature corporate culture and where doing the right thing is the rule, where the Ethics & Compliance programs are effective, etc. But let’s consider those times when saying “no” is necessary.

Several years ago, as the Regional Compliance Officer at a multinational company, Carlos D García, my boss at the time and to whom I dedicate this article, oversaw the business in several countries and had a clear idea of what a timely “no” can do for the business.

On one occasion, while chatting about the complexities that result from saying “no” to a proposal that, while legal and a common practice between competitors and with high profitability, would have put the company’s reputation at risk in the long-term.

Even though we knew that not responding to the proposal in the short-term could have a significant impact on that business unit, Carlos, far from putting pressure on the necessity of re-analyzing the proposal, he counted on the already existent Integrity and Compliance department to provide a distinct perspective, evaluate risks and add value by stepping on the brakes in time.

In presentations to his teams and in business meetings, Carlos often asked “At what speed would you drive if your car didn’t have any brakes?” especially when the expectations of some of the commercial areas are that the Compliance department say no at all costs.

To this day, I still use that question as it has helped me to learn. For example:

For executives who have the responsibility to appoint an Ethics & Compliance team: On the one hand they need to look for professionals with business acumen, with an orientation towards solutions and strategies to advise appropriately. On the other hand, empowering the Ethics & Compliance team is critical to allow them to focus on how they can help the business to achieve these goals while ensuring that they do not suffer from undue pressure from the sales team. It is important to remember that the scandals which have affected the companies’ reputations have been judged by public opinion and the authorities. The commercial impact on the company has not been a factor in their ethical judgement.

For compliance officers: Most of the time, Compliance Officers will not say a simple “no” to proposals. However, if, at the company where they work this does in fact happen often, it could indicate that the problem is more significant than expected or of another nature. It´s always good to review key projects in committees formed by members of different areas to enrich the analysis driven by the right questions. It is critical that the compliance officer position is clearly visible. It is also important to have a good capacity for active listening and showing empathy, especially in cases when after analysis, you know that the decision is going to be to not continue.

A best practice is that the leader of the company (not the compliance officer) is the person who, leading by example, takes or endorses and communicates the decision. This behavior by executive leaders makes the difference and is a valuable opportunity to demonstrate the always needed “tone and action from the top.” In the end, top management defines the risk appetite and is more affected by the consequences of business decisions.

Finally, regarding the added value of the Compliance department, I have learned that even the dreaded "no" that is perhaps the most negative and uncomfortable scenario for a Compliance Officer, has an unparalleled value for the business that, although not everyone can perceive it immediately, it is tangible for those business leaders with a long-term vision.

Imelda is the CEO and Founder of Comply Latam, S.C. She has over 16 years of experience in integrity and compliance. Her most recent in-house role was as the regional compliance officer for Latin America and Canada with Novartis.

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