Ep.1: An Obligatory Word on the FCPA Pause
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About this episode. It’s many been months since our last episode, but The Better Way? Podcast is back! In this (our sort of first episode), Zach and Hui return with a special—and timely—discussion about the implications of President Trump’s Executive Order pausing FCPA enforcement. They address the role FCPA enforcement has played in the development of corporate compliance programs, generally, and in the creation of a broader FCPA “industrial complex.”
But this is mostly a forward-looking episode. Zach and Hui share go-forward opportunities for ethics and compliance professionals—opportunities to reevaluate their role, push back on fear-based compliance, and become a new kind of business advisor. Above all, though, they make the case that the pause, while among the hottest topics in compliance, is far from the preeminent ethics issue of our time.
Who? Zach Coseglia + Hui Chen, CDE Advisors
Full Transcript:
ZACH: Welcome back to the Better Way podcast, brought to you by CDE Advisors. Culture. Data. Ethics. This is a curiosity podcast. For those who find themselves asking the question, there has to be a better way, right? There just has to be. I'm Zach Coseglia, the co-founder of CDE Advisors, and I am joined as always and once again by my friend, my co-founder, and my podcast co-host, Hui Chen. Hui, welcome back.
HUI: Indeed. Um, thank you so much, Zach. I, uh, welcome back to our listeners. Uh, it's been a little while since we last spoke to each other and to you, uh, in this format. Very excited to be back.
ZACH: But we, yes, I am so, I'm so thrilled to be back. Uh, and look, I just want to take notice of the fact that we, we have been on a break. We've been on a break for probably, gosh, 10 or 11 months at this point since our last episode. And we really wanted to start our first episode by talking about our why, why have we been on a break? Why have we been on hiatus for this long? And to talk about our new business, CDE Advisors to talk about our origin story. But we're going to wait until our next episode to do that because over the course of the past couple of weeks, there have been a lot of topics of great interest to the compliance community that we wanted to talk about first. But don't worry because we're very much going to connect the things that we talk about today to our why and to the work that we do every day. In the past couple of weeks, we have seen the president's executive order putting a pause on FCPA enforcement, which had a lot of folks in our community talking; we saw the new Attorney General’s, 14, I think it was, Day One Memos about the Department of Justice's priorities; and frankly, in the past 10 or 11 months, there's just been quite a bit of social and political change that we really want to address in the context of our first discussion. So Hui, how does that sound?
HUI: That sounds great. Let's jump into it. And yes, it's always important to connect things to why, which we will do. It's always about the why in the end.
ZACH: That is our thing for sure. All right. So, Hui, in advance of today's discussion, we each gave a little bit of thought to some of the key takeaways from the changes, the upheaval, the developments over the course of the past weeks and months, so I'm going to actually put you on the spot and ask you to start first. What's the first observation that you want to dig into a little bit?
HUI: So, I'm gonna focus mostly on what's been of greatest interest seems like to the compliance community, which is the president's executive order pausing FCPA enforcement.
ZACH: Let me jump in here just real quick. I think most of the people who are listening are deeply familiar with the president's executive order and the impact that it, it, it likely to have or at least the impact that we know it's going to have over the course of the next many months. But for those who maybe aren't as familiar with the FCPA or with some of these recent developments, can you just give a quick, you know, elevator talk on what happened? And why we're talking about it today.
HUI: So the Foreign Corrupt Practices Act is a law that was enacted in the wake of the Watergate hearings in the 70s, and for a long time after it was enacted, it was rather dormant. But sometime within the last three decades or so, it started getting enforced and it's enforcement had played a big part of it. I mean, a very, very central role in the development of corporate compliance as, as a program, as a profession, as an expectation of, um, what companies should do. In in the compliance space. So, this law has been—in the last three decades or so—has been enforced by the Republican as well as Democratic administrations across the board. And that's never really been called into . . . its enforcement might have waxed and waned a bit from administration to administration, but it's never really been sort of declared to be on pause or to be not enforceable. So what happened in the last couple of weeks was first the attorney general had put it into a very restricted status.
Then the White House came out with an executive order from the president that says, basically, we think FCPA. Um, has been enforced in a way that harms American interest and that there are certain business practices, which in this context, one can read “bribe,” is the way things are done and not allowing Americans to do it harms American interests. So, in my authority as the president, I am going to ask the attorney general to pause enforcement on this altogether. And it's going to, it's pausing it for six to 12 months, so the attorney general can study, basically, how this law has been enforced [and] what are we going to do with it in the future? So that really is sort of the core message of that executive order.
ZACH: Terrific. Super helpful. And just to kind of, uh, say it, uh, the justification that was given by the Trump administration for putting a pause on the FCPA were the very reasons that the FCPA was created in the first place, right? It was originally created to protect American interests in an increasingly global economy.
HUI: And this was interesting too, that we've heard through news reporting that, that, uh, the president has never liked FCPA as a law; and during his first term, supposedly he had asked Rex Tillerson, his secretary of state, to try to kill this law. And the response that he got from Tillerson was, one, as your secretary of state, I can't kill a law; only a Congress could do that. And two, you know, mind you, he was, you know, he was the CEO of Exxon, so this was an international businessman in the oil business. He said, this is a good law. We don't want to be in a situation where everything is, you know, goes to the highest bribe giver. We don't want to be in that world. So, he talked the president Trump during his first term out of trying to kill this law. This time, the law is still not killed. Like I said, it requires, or like Tillerson said, it requires an act of Congress, but it wasn't even really attacked as, as a law in the executive order. It just says it's enforcement has been exaggerated, basically, which is interesting. It left the law intact. At least the executive order itself did not attack the law itself, just attack the way it's been enforced.
ZACH: Absolutely. And I, I think we'll wind up, I suspect we'll wind up addressing that a little bit more as we dive into our sort of key takeaway. So, all right, with all that said, what is your, your first takeaway for me and for, for our listeners?
HUI: So, let me, let me just say that. I will begin by saying that this, the executive orders message was a terrible one. And, um, to, to say that American business interest is harmed by not committing bribery, I think is just, it's a very bad message in so many ways.
Now, having said that, I want to say my first reaction when I heard this, other than just being appalled by the message itself, is that there actually is a real opportunity to course correct some very unhealthy developments that have shaped corporate compliance as a result of its focus on FCPA enforcement.
I don't want to go into all my reasons because I wrote not one, but two articles on this, right? But, but for those who haven't read those articles, I would just say the highlight is I have always felt that a fear and enforcement driven compliance program has not been helpful to the way these programs have been received and run.
They, this kind of program ask, what does the DOJ expect, rather than what actually works. And this is something I hear a lot, and you hear a lot. They always want, what does the DOJ want? What does the DOJ want? And I always want to say, what, what do you want? What does your company and your stakeholders want, right?
So, so maybe this is an opportunity we can switch those questions. There's another really unfortunate development is . . . the reduction and limitation in the meaning of words like ethics and integrity, ethics and integrity are about so much more than foreign corruption. I mean, we can, you know, I mean, we can go on but think about it. You know, ethics is not just about foreign corruption. It's about how you treat your stakeholders, whether it's your employees, your community, your stockholders. This is about how you treat the people in your environment, in your business environment, in your business relationships. It's about so much more than just foreign corruption.
So, I think the final thing, you know, I would say is that—while I do not agree at all with the executive orders sort of criticism of the enforcement—I will say, and I have said before that there has been exaggeration of what is required by the FCPA, mostly by a fear mongering industry because fear sells right.
So, the executive order claims that the FCPA, quote, “has been stretched beyond proper bonds.” Now, I'm not sure I, in fact, I am sure I do not agree with that characterization, but I do think FCPA as a law could have benefited from some adversarial challenges like any other law. So, for example, are doctors and nurses who work in single payer government sponsored health care programs—are they government officials in the same sense that a minister granting oil drilling rights would be? I mean, is that you know, is that something that that really was intended by the FCPA’s drafters? The liability for third parties beyond willful blindness—and what constitutes willful blindness in those situations—never been defined by law. Because there's not been challenges.
Now, if you look at a domestic bribery law, we recently last year, in last June, we had the Supreme Court deciding on Snyder versus United States. Snyder versus United States involved a corrupt official who received a lot of money from a vendor to whom he granted a lot of contracts. And the Supreme Court held that it was not a crime for state and local government officials to accept, quote, “gratuities,” end quote for their past acts like getting a tip, right? A very big tip. So how did we even come to that? And again, that's a bad decision, but think about what it took for that decision to become a Supreme court decision. You know, a corrupt official was prosecuted instead of just signing an NPA or DPA or plead guilty, he chose to go to trial. He went to trial, he lost, he got convicted.
He appealed the conviction. He lost again at the court of appeals level. Then he took it to Supreme Court. Supreme Court actually gave him a victory by defining the law in a way that was favorable to him. So, is that really something that we have seen at all in the FCPA space where people challenge? What some of these things . . . what does really a government official mean? What is willful blindness in the third-party context? None of those has ever been challenged. And I'll say one more thing. I'll stop on this very multi-pronged first point that I'm making, which is, if there is no FCPA enforcement, at least for the time being, then does that mean that compliance programs are no longer about legal defense? And if compliance programs are not about legal defense, should it be in the legal function at all? I'll pose that sort of throw all that out there.
ZACH: That was, so we talked about coming with sort of three key points. I think you came with 10 before we've even gotten to your second one. So that was definitely, definitely multi-pronged. And so much to think about there.
I think that a couple of themes that I, that I, that I pull out of that, that, that really resonate with me are, you know, first, this idea of such a narrow focus within a lot of compliance programs. You know, we talk about ethics, we talk about compliance, we talk about integrity—those words are often in the titles of people who are leading, you know, compliance programs or risk programs within an organization. And yet, the first question I ask when we're talking to a new client or when we're, you know, trying to understand what others are doing across the industry, the first question I usually ask is, “is your program about the FCPA or is your program about organizational risk more fully?” More often than not—and I think you'd agree—more often than not, the answer is it's about the FCPA. It is such a huge driver of focus within corporate compliance programs, and to your point, yes, yes, there is such an opportunity to use this not as a watershed moment for bribery (because I don't think that's going to happen), but as a watershed moment for what a compliance program really can be about and the role that a compliance officer can play within an organization that goes far beyond just being an expert on foreign bribery. That's one thing that I'm hearing from you very much.
The other thing that I think is really interesting is, is that the case that you reference because we don't see in the FCPA space very often cases going to trial, let alone going to the Supreme Court. These are cases that are predominantly settling. And so, that I think has bread, I think—maybe not bread—but been motivated by some amount of fear. That you're talking about; this fear of enforcement; this fear of how your business might be viewed internationally. But it's also again, not to in any way sort of endorse the president's executive order, but it has also led to behaviors or activities that are probably not violations of that law becoming “no-gos” within organizations because of the fear of enforcement. And I think that again, that is another huge opportunity here. How can we actually look at what we're doing or not doing in the context of the law, rather than, um, out of fear of how it may be interpreted or enforced.
HUI: Absolutely. The only people who have gone to trial on FCPA matters are individual defendants, so corporations have always viewed it as too risky to take it that route.
ZACH: Yeah, indeed. I think we're going to dig into some of the other themes, I wonder if I should share one of mine, so we can kind of see how we are overlapping. So, I tried to think of a word to describe what I've sort of seen and heard and experienced over the course of the last couple of weeks, and the word that I would use is chaos.
Let me explain that. I don't want to get too deep into the politics of it all, but I do sometimes find myself trying to understand the strategy behind our president's actions—our current government's decision-making process—trying to understand, again, to come back to our world and our values, trying to understand their bigger why. And the least cynical. Let me repeat that: the least cynical explanation that I can come up with a lot of the time, and I think this case would be one of them is, is just sort of chaos. And whether that's the goal or not, it certainly seems to be the actual outcome that actually works in the president's or the government's favor.
Uh, so we, we talked about the pause on FCPA enforcement. And I think when you look at how our community has reacted, you've seen some amount of panic, I'd say; or some amount of panic that's masked as, you know, keep calm, no worries, not much is going to change. And look, I think over time, all of that will fade and calm.
But what I don't think is going to go away, and what I think that this executive order and many of the memos that the new Attorney General issued on her first day, I think what's not going to go away is unpredictability. Unpredictability in the enforcement environment. And if there's one thing, I think, our community really doesn't like, for good reason, it's, it's unpredictability.
I think it's why as you, you talk all the time about, it's why the ECCP, the evaluation of corporate compliance program document, as you envisioned, envisioned it has become and endorsed and embraced as a guidance because folks don't like unpredictability. So, let's lean into this thing that's purportedly telling us what we should do.
So, I don't think that unpredictability is gonna, is gonna go away. I say that from an enforcement perspective, generally, and I say that specifically with respect to the FCPA, because I think if you look at past behaviors as an indicator of future behaviors, I have no reason to believe that a pause on enforcement means that this administration won't go after a company that it wants to go after, for whatever reason, it wants to go after them from an enforcement perspective.
So, this is why I said, you know, going back a few minutes, I said, I think we will hit as we are here, your point about why this is being done through executive order, why this is being done through DOJ guidance or memos—and not being done through Congress, which by the way, our president and his party control: it’s because they likely will still enforce this law when it suits their political interests.
HUI: I, I certainly think that is a possibility. So, so particularly if you think about the way the executive order is framed, right: it's about American business interest. So, if it is an American business interest to prosecute a foreign company for FCPA violation, then it's conceivable that it would then be perfectly okay—and that could very well be part of the attorney general's review conclusions, right?
Because, because that, remember, the executive order asked the attorney general to review and sort of study and decide what to do going forward in the future. It wouldn't be surprising if she comes to a conclusion that, consistent with the message of the executive order, we are going to resume FCPA. So, it was framed as a pause, right? So, pause can be unpaused, right? We're going to resume in cases where such prosecution does benefit American interest. So, you know, because they, they never really, the executive order never really attacked the validity of the law itself, you can imagine a situation . . . This will be really just crazy, right? Like the chaos that you talked about that, that you imagine in a foreign jurisdiction, where mineral rights are up for grabs: everybody bribes, American company, other foreign companies, even local companies sort of bids for the right—and only the foreign company in this scenario gets prosecuted under FCPA.
Is that impossible? I tell you these days, there's very few things I'd say it's impossible. And, and, and the way the executive order is framed, certainly leaves that as a possibility, and we'll have to see, you know, what is the outcome of the attorney general's review? I suspect it will not take . . . I mean, she's given 6 to 12 months. I don't think it would take 12 months. I think fairly soon there may be sort of further directives on that.
ZACH: For sure, for sure. So, let's take both of these sort of concepts that we've introduced here, and I want to try to tie them back to our work, um, in the culture and the compliance, the ethics space. In an unpredictable world, you’re probably not going to be able to lean into the traditional predictable strategies that have always worked in the past. So, I think that that unpredictability, the chaos, maybe is going a little bit too far, but the unpredictability, is going to mean that we need to embrace, I think, some amount of complexity.
You may not be able to as easily just scare leaders into investing in compliance. You may need to work harder to earn that seat at the table. To me, that means being, you know, a true strategic business partner. Not just an FCPA expert. It means, as we talk about all the time here at CDE, showing your value through data: not just assuming that that value is going to be assumed because this role exists or because you've got this remit. It means, to me becoming more of a business ethicist; helping drive business strategies that are rooted in values and conviction, and commercial success; and truly becoming an advisor to the business in all of these ways.
It's the, “what should we do,” beyond just the “can we do this” approach. I think it also means making culture initiatives more than just, you know, the rote surveys that we sometimes see, or the catchy slogans that we sometimes hear—and really acknowledging that culture—positive culture—is a business advantage. It's a driver of performance. It drives decision making; and not just decision making about ethics and compliance issues, but on everything that we do. So, to me, again, to sort of endorse or cosign where you started on the opportunity, this to me, these are all of the various opportunities I see for our world, for our community, in the face of some amount of uncertainty and change.
HUI: Oh my God. So, so true because the, you know . . . if there is one thing that is certain, that is uncertainty and that is complexity. And these are times where we can really prove our value by . . . being, you know, the, the professionals who can help organizations listen to their stakeholders, try to find common ground in a time of a lot of conflicts and controversy. You know, people come to work with all shapes and sizes of political persuasion and workplace expectations; and in today's world, those differences are more likely to surface as conflicts. How do we help our organizations move forward and actually perform, perform well, as an organization and to bring value to its investors and stakeholders, it really depends on the ability to find some common grounds, to move forward in a way that is consistent with the values that are held dear by the people who are part of the organization.
So, in respect to that, and you know, I'm going to bring up a second point that's, that's sort of related to the struggle that I'm seeing in people trying to transform their approach. So. it's been sort of both amusing and a little bit sad to see how much the industry continues to hang on to fear as a motivator.
I'm still seeing a lot of those messages, right? You and I have talked about a lot of them. So here are some of the ones that I've seen. There is still the SEC, right? There's people who say that. If the president has declared the enforcement of the FCPA to be against national interest, who in SEC would be allowed to go ahead with that?
ZACH: So, I couldn't agree more. That felt very much like a “Oh, I remember that! The DOJ isn't the only entity that can enforce the FCPA.” So, so, well, yeah, I mean, that's technically right as a matter of law, but like, everything that we know about the executive order, but also that we know about the president, would say that's not going to happen.
HUI: That's not going to happen. I mean, one thing we do, we have seen in this administration is a very, um, intense effort by all the political appointees to fulfill the president's sort of priorities. So, if you think somebody could be secretly working on some FCPA enforcement action, I think that is very unrealistic view.
Then, of course, there’s others who say, “Oh, there are other jurisdictions like the UK, like OECD.” Well, the UK Bribery Act has not been used as a fear tool nearly as much as SEC, even, not to mention the DOJ. Can they really provide that threat that the fear mongering industry has been counting on? Not likely. OECD is a is not an enforcement body. It's a multinational organization where, by the way, [the] United States is the largest contributor to its budget. What do you think is going to happen to the US contribution to OECD's budget when we have pulled out of, or at least we're in the process of pulling out just about every other, um, international organization? So, what's OECD going to do without US funding? That's, you know, that's a, something, an interesting development to be seen.
And then there's people who say, “Oh, the law is still in the books, right? It's not dead yet.” We talked about that.
And then there are those who make the argument that I made during the first time President Trump was in office, which is the statute of limitation runs longer than a four-year term. The statute of limitation for FCPA is five years. I will say I'm not making that argument this time. Because of the way everything is being approached under this administration the DOJ, even if we do see a different administration in four years, the DOJ will take a long time—perhaps decades—to recover to what it used to be.
And there's, there's just a lot of things being shaken up in DOJ—in ways that no, certainly no living, you know, DOJ current or former prosecutors has ever seen. And it will take decades to repair that. And I don't know if picking up the enforcement of FCPA . . . where in the priority of that repairing, uh, that would occur.
ZACH: Yeah, so I have a couple of thoughts on that. So, this was pretty much consistent with my second point, as well. So, we're, we're, we're on the same page. It's, it's, let's revisit the fear driver. I pulled some headlines that I saw. One was “fraud and bribery risks still remain.” Well, yeah, they do. That is true.
“Will other countries’ enforcement agencies step up?” That was something that you referenced. “Why compliance is still critical.” My favorite headline was probably, or my favorite phrase that I saw someone use was: “make corruption great again.” These were all themes. That is a good one. It is pretty good, yeah, I know.
I, I, I wish I could, uh, uh, give the attribution. I don't remember who said that, but I saw it and whoever out there said it: clever! But look, I, I think it all goes back to this bigger point of—there probably is going to remain risk. And I maybe, I'm a little bit more bullish than you are on the statute of limitations point. I probably it may be a little bit more bullish on the selectivity of enforcement, whether it's American companies or international companies or not, so I do think that the risk still means there. But I think that the bigger point is . . . there's a lot of other risks out there that companies encounter every single day. Whether it's data privacy or cybersecurity or just fraud or cultural issues and toxicities, employment related issues, the emerging issues relating to AI and technology.
I mean, we could go on and on and on. There are so many risk areas that exist. And yet this one, you know, is, is posing the question to so many: why compliance is still critical? Well, compliance is still critical because businesses, think more than ever, are expected by a meaningful population of people across the globe to act in a certain way as decent corporate citizens, as citizens of Earth. But also, because there's just so many other risks that exist out there that warrant attention—not just this one that has become the focus of so many for so long because of its enforcement history.
HUI: Indeed, and ultimately, business's long-term success is really about trust, the trust of the public, your consumers, your, you know, supply chain people, the trust that your community has in you. And that really is the core of the issue. It's not about foreign corruption.
ZACH: I love that. Instead of leading with and making decisions out of fear, lead with and make decisions in an effort to build trust.
HUI: Absolutely.
ZACH: It's great. Uh, all right, should we go on to our, our, our next observation? I maybe I'll, I'll jump in here with mine.
HUI: I did already. So . . .
ZACH: Oh, great. Uh, so your, your article last week, about the pause—about the, the president's executive order—had this quote. So, I'm, I'm now quoting you to you. “One of the first to be impacted would be law practices that have thrived on conducting global FCPA investigations.” You continued, by saying: “companies have been willing to fund these expensive outside counsel investigations for two primary reasons.” One, “preservation of the attorney client privilege”; and [two], “potential representation before the DOJ, both of which are premised on the likelihood of a DOJ investigation.”
So, I think you're right here, uh, but we shall see. You know, over the past couple of decades, what we've really seen, and we've alluded to it throughout our discussion here, by talking about the kind of disproportionate focus on this one particular law [and] the role that it's played in shaping corporate compliance programs . . . but over the past couple of days, we've, we've just seen, I guess, what could only be described as the creation of an FCPA industrial complex. Uh, you've got big law firms.
HUI: Very much so.
ZACH: You've got large accounting firms. You've got conference organizations that collect a lot of money from people for global and national and regional conferences all about the FCPA. You've got certifications and certification organizations that are doing the same thing . . . and so on. You know, how significant will this be and how fast will that change occur? I don't know. But, you know, the pace of political change is pretty significant. So, you know, I believe, and this is where I said maybe I'm a little more bullish on the statute of limitations point: I do believe that things can change sort of with every new Congress or every new presidential administration. So, we'll see how much, how much, “stick” this has on really changing people's approaches and the way in which they invest in their programs. But I do think that will change.
I also think, though, that on the other hand, there's quite a bit of work that's probably churning right now with those very folks whose clients are looking to sort of make sense of the uncertainty. Or actually, maybe trying to undo the results of past investigations or ones that are ongoing, existing ones—or at least that were ongoing and existing until a week ago. So, you know, it'll be really interesting to see what impact sort of downstream this has. But I do think that there's a huge opportunity; as I said before, not a watershed moment about whether businesses can do things that they couldn't do before in prior regimes or in prior administrations, like bribing people—but really a watershed moment about the type of support that's needed and the reimagining of the compliance function, which is something that is talked about often at those very conferences that I referenced, but maybe we can do it for real this time?
You know, you've been a longtime proponent of questioning whether or not the compliance function should sit within legal. Maybe now we'll have real meaningful conversations about where it belongs and what that organization really should be and the value it can bring to an organization beyond just legal, regulatory, and enforcement related guidance.
HUI: I think that question would depend on a lot . . . on how compliance people going forward can define themselves and prove their value, right? So, are they all about, you know, trying to sell insurance of FCPA enforcement, which is a lot, unfortunately, um, and, and those, I think, are the programs that will, in time, be, be really challenged to find a way to go forward.
I think habits are hard to break because all the people who are general counsel and chief compliance officer now have spent their entire professional career seeing active FCPA enforcement. They're used to relying on this. So, they're not going to change overnight, like, we have noted that a lot of people are still hanging on to some form of enforcement coming, you know? So, things are not going to change overnight because the habits are hard to break because when a general counsel or chief compliance officer hears about a certain type of conduct, they immediately think, “oh my God,” you know, “privilege investigation,” you know, all of these automatic thoughts . . . which are now going to be increasingly checked by well, “but what does it mean today?”
So, I do think those changes in terms of getting law firms to run around the world to conduct investigation for you is going to be probably waning down in significant ways. I just talked to a client, I mean just yesterday, that they, they were interested in, you know, doing some significant remediation related to sort of past potential FCPA issues. And part of this remediation is now being paid by the business. And I asked them, I said, “you know, you might want to go back to the business that's paying for this to see if they still want to do it in light of, you know, the fact that there's going to be no enforcement—certainly in the next four years.” And the person, you know, basically say, yeah, “I, I do have to do that.”
So, so it's not, you know, it's, it's, this is not sort of, um, hypothetical situation . . . between the attorney general and the president, it's very clear where things are going in this regard.
And I'll make a final point in response to what you mentioned about these conferences, right? Ever since I started with FCPA, I always found it ironic that at these compliance conferences, the star speakers are the government officials. Not once. Not once. Of all the conferences I've been to, which has been many, many, have I ever seen a business leader being the star speaker—or even a speaker. You know, not, not someone who's in the business of compliance, but someone who actually runs a business who has, you know, compliance in their organization, come to talk about why compliance is useful in their organization. Not once. What we see is whenever you have a DOJ official on the stage, all the compliance people run to that. Now, if you ever doubted what compliance was driven by, I think that would give you a clue. Now, with that being taken away, what is going to replace it? Are we going to build that business partnership, and show the contribution, so that we really not only earn a seat at the table, but be a leader at the table? Can we do that? This is the time we're going to be tested.
ZACH: Yeah, I think that this is a time to test. I do think . . . I agree with you: it's definitely a time of opportunity, not just chaos and panic. But I'm going to end with a little bit more of a cynical take. Because I sort of started with a bit of a cynical take. And to make my point, I actually want to quote our friend, Benjamin Van Rooij, you know, in, in the book that he wrote with Adam Fine, The Behavior Code. I'm not going to give the full quote, but this is part of it.
He said: “Compliance and ethics programs only really work exactly where they are not really needed.” And so that is to say, in the context of this discussion, I'm not sure how much will change. I think maybe some will pivot, but more likely, these folks who have always thought of it as an insurance policy are probably going to convince themselves or be convinced by others not to stray too far from what they've been doing because the risk isn't gone, the risk hasn't really changed.
And we'll see how much of that is true, but I think whether or not this executive order came out, whether or not there was a pause, we would be having the exact same conversation that we're having about what better compliance, a more modern compliance program, looks like. This executive order has given us a really kind of nice framework to have that discussion, but it's not the reason that we're having this discussion. It's not the reason that we think that there is a better way when it comes to compliance. And yet, I'm not so sure that those who aren't already convinced are going to be convinced because of this.
HUI: I agree with you. Those who never were convinced are probably breathing a big sigh of relief right now and say, “phew, I don't have to worry about that anymore.” Right? So, you know, we, we have to be realistic that there are those companies and they, they probably never had a real strong compliance program anyway. I think the, yeah, the development in what happens in the corporate compliance space itself will be interesting to see, and it will be very critical to the future of this profession to see whether we can step up.
And I think, you know, as we're nearing the end of our time (this is so much fun, by the way . . . I have missed doing this; we're, we're looking forward to resuming this, um, so we can have this, these conversations). I think my, my, my final observation when it comes to the, to this particular executive order, is that we have to just pull back and look at the big picture. And this ties back to your chaos point.
As of February 12th, the president has signed more than 60 executive orders. He has signed more executive orders in his first 10 days than any recent president has in their first 100 days. Now, as a citizen, this particular executive order is not high on my list of worries when I look at all the executive orders and all the memos and all the actions that are being taken. We have executive orders that touch on people's constitutional and fundamental rights like citizenship.
We have things that touch on people's economic life, such as tariff with some of our largest trading partners. We have executive orders that impact health care, from drug pricing for Medicare and Medicaid patients, to enrollment in Affordable Care Act plans, to reductions in National Institute of Health funding, to exit from the WHO.
We have executive orders impacting on the operation of federal government, such as establishing the Department of Government Efficiency. You might say, well, what does that have to do with me? Those are just, you know, federal employees, there are probably just too many of them anyway. But there are a lot of government employees who do things that are very important to us that we never think about.
These are people who inspect our food for safety, direct air traffic, dispense social security checks, Medicare and Medicaid benefits, manage national parks, manage our nuclear arsenals. We’re overall seeing a severe disruption to rule of law, as we have known it; and if that is not the preeminent ethics issue of our day, I don't know what is.
So, sometimes we got to think in the grand picture of all this that's happening: what is our role as people who say . . . who believe in ethics? What should we be doing in the sphere of our influence and in our organizations in the presence of all of these challenges? I think that to me is the greater existential question that I ask myself every day as I watch the news.
ZACH: I couldn't agree more. And I think that's a perfect place for us to—on a somewhat negative note, but a perfect note nonetheless—to end our discussion today. Thank you. Hui. It has been so much fun having this discussion with you, as always. What these folks probably know, maybe don't know, is that these kinds of conversations we've had every day over the course of the past 10 or 11 months, we've just not been recording them for all of you. So, we're excited to now be recording them and to bring back The Better Way podcast. When we come back, we will have lots of exciting guests, some returning guests, lots of really wonderful content planned for all of you, and of course, the return of the Better Way Questionnaire.
Thank you for tuning in to The Better Way? podcast. For more information about what's happening at CDE Advisors, visit our website at www.CDEadvisors.com. Or you can also check out the Better Way blog, and dive deeper into some of the topics we explored today, and whatever else is on our mind. And please, subscribe to the series wherever you regularly listen to podcasts. And finally, if you have thoughts about what we talked about today, the work we do here at CDE, or just have ideas for better ways we should explore, please don't hesitate to reach out. We would love to hear from you. Thanks again for listening.