The Wall Street Journal: Bark Without Bite

Originally Published in The Wall Street Journal | December 16, 2012 | By Jennifer Smith

Compliance may be a hot area for in-house lawyers, but that doesn’t mean compliance chiefs have all the tools they need to keep corporations out of regulatory hot water.

Nearly half of 48 compliance officers polled at an October conference said they lack sufficient resources. And 55% said programs intended to review employees’ behavior and reward them for acting ethically—say, for not bribing foreign officials—don’t do much to minimize risk.

“Are employees penalized if they grease the wheels, or if a manager looks the other way?” asked Paul Mandell, chief executive officer of conference planner Consero Group LLC, which conducted the survey.

In other words, do compliance programs have teeth? Are there carrots to give incentives for doing the right thing and sticks to be used when ethics slip?

“If you get caught trying to bribe a port official to try and get the company’s product in faster, and there is no punishment,” Mr. Mandell said, “it’s a much tougher challenge to get people to take the compliance job seriously.”