The Compliance Podcast Network recently published an analysis of an FCPA enforcement action against Deere and Company involving bribery schemes that highlight how root cause analysis is more than a best practice. It’s essentially a regulatory expectation. Deere took timely action to remedy what they initially understood to be the problem by firing employees and changing certain internal controls. Their analysis was not broad enough to understand the organizational context that enabled bribery to continue.
Under the new ECCP guidance, comprehensive root cause analyses are expected, with effective steps identified to prevent the recurrence of the misconduct. One bad apple soliciting a bribe or committing fraud may be readily addressed. When two employees collude to demand bribes or circumvent internal controls to commit fraud, the client/donor will be asking what is going on with that organization’s culture that enables two employees to connive. Better that your organization ask this question and take actionable mitigation measures, than the client or donor.
Root cause analysis has the additive effect of strengthening the overall ethics program on an ongoing basis and building a culture of accountability. Employees must see that misconduct is taken seriously.
Read the Compliance Podcast Network article here.