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Corporate Doublespeak: A Bribe is a Bribe

By Michael Volkov on Jul 27, 2018 04:31 am

Language communicates more than just words – indeed, the use of language reflects much more than simple communication.  Often, a person’s language reveals an attitude, a feeling, a perspective, and much more about a person.  To me, I am often struck how language is used by corporations to mask a clear and distinct idea.  Corporate speak is a language unto itself, and can reflect a company’s culture, and its commitment to honesty, trust and integrity.

Forgive me for questioning the use of corporate language but when I read phrases such as “improper payments,” “Questionable payments,” and other equally vague terms used to describe flat out bribes, I question the need for companies to avoid using accurate language.  My overriding question in these circumstances is why can’t the company use straightforward language?

A bribe is a bribe and no matter how you characterize the payment, it is still a bribe.  Of course, I recognize that in order to violate the FCPA or domestic bribery laws a payment must be made with “corrupt” intent.  In the FCPA context, a payment must be made with intent to influence a foreign official to act contrary to his or her official duties.  Assuming that a payment is made with the requisite intent, such a payment constitutes a bribe.

Companies that are reluctant or unwilling to use straightforward language may choose to avoid clear and concise language.  Such an attitude may reflect the company’s unwillingness to face the implications of an employee complaint, apparent misconduct by officers or employees, or other problems.

The importance of language is perhaps best illustrated when companies choose to define their corporate values.  The words selected by a company help to define the company’s culture and has an impact on every employee.  The specific words used by the company are perceived by employees in a manner that ultimately is translated into employee beliefs and conduct.

Google relies on a creative mantra – “Ten things we know to be true.”  (Here).

The Container Store describes a “Man in the Desert” metaphor to promote effective sales and strong leadership traits.  (Here).

Corporate communications should always focus on the positive rather than informing employees what not to do.  People respond to optimism and avoid  negative communications. Corporate language should always fit a company’s culture – bland statements of encouragement may sound positive but in the end fail to motivate employees.

Corporate language should weave in stories or vignettes that exemplify company values and objectives.  Employees respond to goals, leadership and encouragements.

The new generation of business leaders and employees is beginning to question the use of corporate-speak, or bland business language.  The focus is fast becoming the link between language and a company’s culture.  New leaders are rethinking the bland use of corporate language that extracts concepts typically used in day-to-day life in the corporate world.  Some are advocating for replacing corporate-speak with a human voice in a company, encouraging employees to speak to each other as humans not as employees wedded to intra-company formalities.  This trend is interesting to observe and may eventually lead to honest, open and concise language used by corporate leaders and employees.  There is no reason that all corporate communications have to be conducted in a formal manner designed to avoid everyday expressions.

Going back to my original point in this posting – formality in describing a bribe reinforces the lack of clarity in corporate communications and the language used among leaders and employees.

The post Corporate Doublespeak: A Bribe is a Bribe appeared first on Corruption, Crime & Compliance.


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Artificial Intelligence, Hype and Financial Misconduct

By Michael Volkov on Jul 25, 2018 06:16 pm

The compliance world, like business in general, is being inundated with “trends” and claims of “new technology” that inevitably (is or) will transform our economy.  There is no question that artificial intelligence holds great promise for compliance and our entire economy.

When you boil down artificial intelligence, it is built on two significant developments – the creation and collection of large data sets (sometimes called “assets”) and most importantly, advances in computer technology and power.  Over the last ten years, computer technology in terms of speed and computational capabilities has been revolutionary.

The developments in data has resulted in the new focus on “big data,” that is the ability of companies to generate, organize and store large amounts of data relating to its business operations.  Coupled with greater computer power and the ease with which such power is distributed among users (e.g. our smartphones), the trend is unmistakable – large amounts of data can be quickly mined or processed to identify a host of data sets, anomalies and other interesting inferences and results.

The revolution in this area is initially being advanced by financial institutions because they generate large numbers of transactions and have significant need to identify anomalies or potential fraud.  Credit card fraud is a massive problem that costs the industry as much as 5 percent of its annual revenues.

In the corporate compliance space, however, artificial intelligence or machine learning has had an impact in two areas: financial misappropriation and due diligence.

Internal audit faces an unending challenge in identify as quickly as possible potential fraud or misappropriation of corporate resources.  It is easy to recognize the threat – money can be accessed and then used for illegal purposes such as paying bribes.  Here, artificial intelligence and data analytics can identify early potential anomalies.  Forensic accountants live for the moment when they are able to identify an “anomaly,” meaning a suspect transaction (or set of transactions.”

When reviewing a large amount of internal corporate data, finding anomalies is more difficult than locating the proverbial needle in a haystack.   Artificial intelligence – computer powered processing of large data sets – is now feasible for many companies to implement.  As a result, companies will be able to internally monitor financial transactions closer to the occurrence of the transaction.  Internal audit can now develop real-time monitoring programs.

As companies digitize their processes, they develop real audit trails in their enterprise management systems.  Applying artificial intelligence processes to monitoring and reviewing large collections of financial transaction data results in increased accuracy in identification of anomalies.

Artificial intelligence is not the magic bullet for financial accountants but it is and will be a valuable tool in every company’s arsenal in the battle against fraud.  Companies need to explore artificial intelligence capabilities, the application of such processes to their activities, and develop a strategy for implementing artificial intelligence on a cost-effective basis.  By 2021, most companies will incorporate artificial intelligence – machine learning into their internal applications.  Organizations that face large fraud risks will have greater need for implementing artificial intelligence solutions.

It is important to remember, however, that artificial intelligence fraud detection strategies should never be the only solution used by a company.  Relying on predictive fraud detection may be helpful but should never be the only means to detect suspect transactions.  Anomaly detection requires flexible approaches and strategies as fraudsters employ new or different schemes to carry out their crimes.

Fraud detection requires a holistic approach to harness artificial intelligence and detection strategies.  A multi-layered approach may be an effective way to balance a company’s strategy.  The challenge is to translate artificial intelligence into actionable intelligence.

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