7 Compliance highlights 2021

Contents:

Notes for a compliance officer
Key players
Key regulations and laws
Key frameworks
Top FCPA cases
Key events of 2021
Top Ethicontrol articles

To evolve in the right direction in 2022, we need to review what 2021 taught us. Compliance tips, key events and analytics — all in a nutshell for you to remember.

1. Notes for a compliance officer

Prioritize ESG. You'll often hear about ESG (Environmental, Social and Corporate Governance) - not only in our blog but also in your professional and non-professional environment. If your company is not environmentally and socially responsible yet, it is worth pushing this initiative along with regular financial controls.

A man turns the hands of the clock while half sitting

Focus on security. Certification, security policies, and emergency procedures are vital for both big and small companies - any information leak is detrimental and leads to fewer clients and profits. At the same time, the absence of proper data security controls if the company is under investigation will significantly increase the fines and responsibility for the data leak.

Whistleblowing is a complex process - treat it as such. Key lessons from the new ISO 37002:

Determine the scope of the WMS. What to address and in what manner are the most important principles of working WMS.
Allocate adequate resources to the whistleblowing system (personnel, equipment, policymaking).
Ensure direct unrestricted access of the responsible WMS person to the top management body.
Mind the context of the organization when developing whistleblowing policies.

2. Key players

The most visible actors in compliance, whistleblowing, anti-corruption, and risk management remain the same. ISO has issued new standards for whistleblowing management systems; the DOJ and SEC outlined a strategy for engaging whistleblowers, identifying more risks, and encouraging companies to report ongoing investigations.

Local legislative bodies of the EU member countries have been particularly active in passing the new whistleblowing laws - the same applied to Hong Kong and Australia, which made attempts to reevaluate existing provisions.

3. Key regulations and laws

Intense and comprehensive work was carried out in 2021 on whistleblower laws in the EU - it is still the most global whistleblowing project and regulation. According to the Whistleblowing monitor, only 6 EU countries implemented local whistleblower laws: Cyprus, Denmark, Lithuania, Portugal, Malta, and Sweden. The deadline for implementation was the end of December 2021, so the majority of the countries are behind the timeline, and one EU member did not start the transposal at all (Hungary).

Not Europe only: New York expanded its whistleblower statute allowing more types of employees (including former ones) to report and adding the premise of "reasonable belief" that the information is accurate and important. Australia also intends to update its whistleblowing provisions in the public sector to include former employees, remove secrecy offenses, shift the burden of proof to the employer and extend the scope of detriment.

4. Key frameworks

A girl and a robotic arm pick apples from a tree

ESG - the new black for 2021 and 2022 accordingly. The importance of ethical governance is widely discussed: major audit companies always include it in the trends and mark it as a key factor for attracting investors. All three components: environmental, social, and governance criteria, are equally crucial for the company's reputation and show how risky the investments can be.

Additionally, ESG criteria are already included in certain companies' financial product development and marketing strategies. The way you treat your employees and help the environment expand compliance beyond audit, record-keeping, and transparency.

Three important ISO regulations as of 2021:

ISO 37002 Whistleblowing management systems. A comprehensive guideline for establishing and maintaining a WMS: principles, ethics, values, and protection from conflict of interest can be found here.

ISO 37001 Anti-bribery management systems. Adaptable guide for companies that need transparency and avoid financial risks: controls, procedures, and risk assessment are introduced in this standard.

ISO 37000:2021 Governance of organizations. This guideline to train know-how-needed specialists in governance for any organization includes directly responsible employees, stakeholders, and all persons involved in building the organization.

5. FCPA cases

A confused man stands near a large calculator and coins

2021 has been a record-breaking year for FCPA charges – the lowest fines and number of disclosed ongoing investigations in recent years. As usual, we prepared the analytics and case summary. In 2021 the total fines by SEC and DOJ were around $500 million, with Credit Suisse getting the highest charges ($275 million).

The most common violation is bribery of foreign officials, subsidiaries, and contractors, and inappropriate record-keeping. DOJ and SEC are challenged with an overall trend of decreasing open investigations in the companies. It is a question of whether the regulators can be more efficient in identifying misconduct and prosecuting it accordingly.

6. Key events of 2021

A year was full of milestones for whistleblowers and controlling organizations. The largest award for whistleblowing was issued by CFTC – $200 million to the whistleblower for revealing the information, which resulted in $3 billion in fines. 2021 also has been record-breaking for SEC: the Commission received 76% more tips than it did in the 2020 fiscal year.
One of the most known whistleblowers, Daniel Hale, got a BluePrint for Free speech International Award for whistleblowing. Daniel is still imprisoned in the US and is considered a spy – it shows that amending the existing legislation is vital for whistleblower protection.
Historic keynote address from Commissioner Lee on ESG. ESG has only gained relevance and importance through the years, and in 2021 it is evident that without reflecting on ESG, the company will be unlikely to increase its profits constantly. Even the regulators talk about it now! More companies are global revenue generators than countries, and, therefore, they set the trends in ethical governance. Working on ESG in the company attracts more investors and satisfies shareholders, as well as regular clients.

Three pieces of advice from Allison Herren Lee: to succeed in ESG, enhance board diversity, increase board expertise, and inspire management success.

7. Top posts of Ethicontrol

Whistleblowing attracted more attention in 2021 – mainly, you've been interested in whistleblowing laws in the EU. Anonymity, whistleblowing in social media, and whistleblower cases are among the top queries and will stay with us in 2022.

Here is our list of top-performing articles:

Thank you for being with us and leaving feedback – more and more to come in 2022!

Credits for the illustrations:

Illustration by Ekaterina Ziyatova from Ouch!

Illustration by Tatyana Krasutskaya from Ouch!

Illustration by Polina Golubeva from Ouch!