Richard Bistrong was a former VP of International Sales for a publicly-traded, multi-national company. He was convicted for his role in conspiring to pay bribes but now has shifted his life's work to educating others on why fraud and white-collar crime occurs and how to prevent it. Join Cindy Moehring as she and Richard engage in an insightful conversation about white-collar crime and the future of business ethics.
Keep the conversation going. Contact Richard Bistrong at richard@richardbistrong.com
Podcast:
Episode Transcript:
[music]
0:00:15.2 Cindy Moehring: Hi everybody. It is my pleasure to introduce to you today a very special guest. We have Richard Bistrong with us today. He is the CEO of Front-Line Anti-Bribery. In a prior life, he was the International Sales VP for a manufacturer of law enforcement and military defense products, and has had quite a career from corruption to compliance. And what we're gonna spend our time talking about today is some of the current real-life events that we are all facing in compliance and ethics because of COVID and the systemic racism issues and how we all deal with that as we start to come out of the pandemic. So Richard, welcome and thank you for being here today. So Richard, before we jump into some of the questions about what's going on today, can you just tell us a little bit about yourself and what you're doing as CEO of Front-Line Anti-Bribery?
0:01:12.4 Richard Bistrong: Sure, Cindy, and thank you for the invitation to join you today. It's a pleasure to join both the student, the compliance and the business communities, and for our viewers. So my journey, as you shared, has been from corruption to compliance. I spent 10 years as an international sales executive. For over 10 years, Cindy, I was overseas an average of 250 days a year, pretty much the world. I lived in the United Kingdom for part of that time. And at the end of that decade, it was marked by me being the target of a criminal investigation which started at the United Nations in their Oil for Food investigation, and that ultimately ended up with the findings of that investigation being shared with my former employer. And in part that was one of the reasons why I was terminated in 2007, just to sort of time stamp this a little bit. But the UN investigators also turned over their findings to the Department of Justice, so I became the subject or the target of a criminal investigation. And as you know in the United States, you have two choices when you get that call. One is go to trial. You're innocent until proven guilty. And the other is to cooperate, and Cindy, I did it.
0:02:43.8 Richard Bistrong: So I wasn't about trying to delay justice or to challenge the government's evidence. I wanted to face justice. So I cooperated with the Department of Justice and also prosecutorial authorities in the United Kingdom as I ... there. And that period of cooperation ended in 2010, and ultimately I got sentenced in 2012, fourteen-and-a-half months in federal prison, returning home in December 2013. And that's when I started to dive into the compliance field. And I saw this very wonderful, robust, well-experienced discourse on compliance from a regulatory, a legal, a forensic and an audit perspective. But what I didn't see, Cindy, is a voice of what it's like out there, what it's like to be tasked with commercial success in what we know are some pretty volatile in high-risk regions. So I started just on a very simple blog, sharing my story and my journey, and that's now taken me all over the world in my Front-Line Anti-Bribery practice. And it's just been an honor and a pleasure that I could not have imagined six years ago, sitting in a federal prison cell.
0:04:17.1 Cindy Moehring: Yeah, well, it is definitely a, I think, unique perspective that you bring, a needed perspective, because you have been on the front lines and you've been on the firing lines and you've made some mistakes and now you're on the side of trying to help others not make the same mistake. So I appreciate you sharing during that part of your journey, so that's wonderful. So you mentioned a blog, which is where you started. And you recently just wrote another blog for the FCPA blog, and it had to do with a couple of HBR articles, both of which have just come out. And I thought you did a really nice job of weaving those two together. And so let's talk about that for a minute. The two HBR articles were about emerging from a crisis, and we are in a crisis right now because we are... Actually more than one crisis. We've got the global pandemic, and we also have the racism crisis sort of here in the US, another pandemic right now, affecting the world as well. And then there's also Max Bazerman's article, which he recently came out with in the Harvard Business Review about a new model for ethical leadership.
0:05:25.5 Cindy Moehring: And where I wanna start the conversation with you is talking about what you described as, and actually, I think it was in the emerging from a crisis article, the tyranny of the present. And what do you think that means? And what is it going to look like on the other side of the pandemics?
0:05:47.4 Richard Bistrong: So part of the tyranny of the present in this particular HBR article is about uncertainty. And uncertainty, Cindy, I didn't really think about it this deeply until I read that article, it's we have nothing to compare this to. This isn't like the recessions of the past. This isn't like other health crises that we've had in the past. There is no context from which we can sort of level set how we emerge. So we're really in challenging times, and I think what that means from an ethics and compliance perspective is we really need to think about our decisions ahead, we really need to solicit feedback from the front lines, the people who are going to face these new risks, whether that's on the commercial selling side or on the supply chain buying side. Our new world will not emerge evenly, and risks will not emerge evenly. So I think we have to be careful that in our rush to regain market share to get our business back, that we don't allow the tyranny of the present to overwhelm what's in everyone's long-term interest and we avoid the hazards of short-term thinking.
0:07:20.3 Cindy Moehring: Yeah. So we will emerge from the pandemic at some point, but to your other point, it's not gonna look the same as it did before. It is a new normal and there are going to be new risks, but there's also going to be this unevenness, if you will, with companies trying to get back to business. And so there's gonna be some pressure involved in that. And so what do you think are some risks that will be the same in terms of pressure, whether it's the new pressure [chuckle] or similar to what the old pressures were that business leaders need to watch out for when we emerge?
0:08:05.8 Richard Bistrong: Okay. So let's separate that out into, I think, two different groups of risk, and I know what it's like to face market headwinds. Not every year is a good year, and there are market cycles. Now, that's nothing compared to what we have now. So what we have now is a workforce that is stressed, anxious and uncertain about the future. And Cindy, when you add all that up, when you talk about what I call a career-changing moments, when someone might have a new supervisor, a new role, new goals, a new compensation plan, organizational change, Cindy, any one of those, what research has demonstrated, can lead to an increase in workforce misconduct and a decrease in workforce engagement, because from my perspective, during those times, people think about three things: Me, me and me. So if we know that sort of pressure exists, I think we need as compliance leaders, and we'll talk about the business side after, but as compliance leaders, we need to proactively address it and affirmatively address it.
0:09:34.5 Richard Bistrong: So that's a situation where if no one's calling you for help, that requires proactive outreach, and I'm not always talking about a sophisticated Zoom room or webinar, it could literally just mean picking up the phone, asking how someone's doing, maybe sharing your own vulnerabilities and how you're managing through the crisis, and just to constantly reinforce to the workforce that you're there to help them. But the only problem that you can't help them fix is the one that they keep to themselves. There is a wonderful book, "The Fearless Organization" by Amy Edmondson, and one of the things that I loved that she makes is; The more we're reaching out to each other when there's not a problem, the more likelihood there is that someone will reach out to their support teams when they do face an ethical dilemma and a problem is at hand. So I think that's half of the bucket is this uncertainty that can lead people in the wrong direction has to be affirmatively addressed, that no news doesn't mean good news.
0:10:48.3 Cindy Moehring: Right. So what about from the business leader's perspective?
0:10:56.1 Richard Bistrong: So this is so important now, Cindy, is from my former commercial self, when business leaders are setting ethical expectations and being clear that a license to succeed isn't a license to cheat or take a shortcut, that it sends such a loud and unspoken message that, "Here responsible and ethical business practices aren't a support function. It's how we conduct ourselves." So I think passive leadership right now, where leaders are not very clear about setting ethical and integrity expectations, that that's the enemy of success. So this is the time when the voice of business leadership really needs to sound loud when it comes to setting those expectations. And it's not like compliance leaders are in the same offices right now as their business peers. So I think it may be a time to be more than just virtually present in the life of your business peers, you may have to virtually intervene to make sure they are addressing these risks.
0:12:11.7 Cindy Moehring: Yeah, those are good points. So I really hear two things there that I think are super important and I wanna emphasize is, one, the relational aspect that there still is to business and how important it is to have and to build those relationships between organizations like ethics and compliance and the front-line managers in the good times, because it will end up, like you said, that Amy mentioned in her book, that it pays off when there's actually a problem because they already know who you are and they'll... If you're in ethics and compliance, then the business leaders will be more likely to reach out. So that's one I think super important message. The other one that I think I hear you saying, but I don't wanna put words in your mouth, is that between the two voices, ethics and compliance, or an individual's own business manager, their own leader, the leader's voice is louder to an employee than the ethics and compliance voices are. Is that right?
0:13:19.6 Richard Bistrong: Well, I didn't invent the rule that the people that we tend to listen to the most are our supervisors, right?
[laughter]
0:13:27.3 Cindy Moehring: Right. I mean, it only makes sense, but it goes so much to the point of why it is important that ethics and compliance be operationalized and really owned and lived out, if you will, by the front-line business managers, because there's a lot of research that also shows any time an employee even has a question, the one they're most likely to go to is somebody who's in their business chain. And ethics and compliance is there for support as well, and need to be absolutely, 'cause there are times when when people don't feel comfortable reaching out. But knowing that, that they're primarily gonna reach out to their business leaders, just impresses upon me the importance of the point you made about how business leaders need to say, "This is how we do business. Ethics and compliance isn't just a support function." So, I think that's an important point.
0:14:20.2 Richard Bistrong: Yeah. And Cindy, in our compliance discourse, there's no shortage of discussion about tone at the top. And we know that tone at the top is irreplaceable, but it can also be aspirational if left that way. And I think that's also where we have to think about the middle of the organization, because it's those regional managers that are the ones that the line workforce is turning to for help, and those are the folks that have the volume controls on getting the business done and the volume control on the importance of how business gets done. So if there's ever a ring of management during a time of crisis that's critical to the success of the enterprise, one ethical decision at a time, it's that band of mid-level management.
0:15:17.0 Cindy Moehring: That's absolutely true, and it can't just be aspirational. Where the rubber meets the road is in the middle of that pack, and for those who are at the bottom, actually having to execute against it. So that's critical. So let's turn for a minute and talk about Max Bazerman's article, but in the context of the new statement and pronouncement that has been out now for about a year from the Business Roundtable, about what the real purpose of a corporation is in that they changed their position after 22 years and said, "It's not just to serve the shareholders. It's actually to serve all of the stakeholders." And in fact, they mentioned ethics in that statement and say, "In addition to your stakeholders, one of them are your suppliers, dealing ethically with your suppliers." Of course, they also mention employees and communities in addition to the shareholders. So let me ask you this, "Do you think that in Max Bazerman's view of the new model for ethical leadership, that it aligns with what the Business Roundtable's new pronouncement is?
0:16:25.7 Richard Bistrong: I think generally speaking, yes. The question is, and I think Bazerman gives us a bit of a road map, is how we get there? Because, once again, going back to my former commercial self, folks, whether they're on the supply chain side or on the selling side, they need a very clear definition of what success means 'cause to be general about it and not to have accountability of what success means means that everyone's responsible and maybe no one's responsible. The Economist wrote a very interesting editorial about this, is those again are wonderful aspirational goals, but how do we make people accountable for them? And we've seen certain industries in this particular crisis that engaged in what we might think of as lawful, but awful behavior, and paid a reputational price for engaging in conduct that they were in thinking about how it was going to impact all their stakeholders. So again, wonderful aspirational goals. Now the question is, how do we get there? And from your workforce perspective, can you define success to them? That's a much greater challenge.
0:17:57.6 Cindy Moehring: What are some of those examples that come to your mind where they missed the mark, the companies missed the mark at this moment in the pandemic that you were just mentioning?
0:18:09.3 Richard Bistrong: Well, we've seen in the news in the United States with respect to meat and poultry packing, how a number of organizations weren't thinking about the health and safety and welfare of their employees from a regulatory perspective. They were allowed to return to work and look at what happened. Bloomberg had a pretty tough article about the cruise-line or the cruise-ship industry, where they knew what was going on yet... I think the title of the article, "Yet the Party Went On." Right. So in that case, they weren't looking out for the health and welfare of their customers. So again, yet another example of lawful but awful conduct, where organizations weren't thinking about, "Well, just because we can do this, doesn't mean we should."
0:19:14.0 Cindy Moehring: Right, right, right. So the Wall Street Journal recently reported that some boards have created resilient scorecards, if you will, for how to essentially judge a CEO on how well they did their job this past year. I don't think we'd all be crazy to think that anybody that set goals in January didn't have to seriously look back at them and probably modify them after the pandemic hit. So they are focusing more on... Some boards have started to focus more on what does a resiliency scorecard look like for a CEO, and obviously you would hope that that would trickle down throughout an organization and more into the senior leadership. When you think about it from that perspective, and coming out of this current tyranny of the current events that we have right now, what ethics and compliance aspects would you hope that boards are considering a resilience scorecard?
0:20:20.1 Richard Bistrong: That's a great question, Cindy. And I think part of it is going to be... Or much of it is going to be around timelines. I believe there's a critical relationship between resiliency and how long we're taking to get there. If boards are expecting a rapid recovery, what are the implications of that speed on the business, for people who are selling and for people who are buying both to the supply chain, procurement, and commercial personnel. The Financial Times has a great series, it's called FT Moral Money, where they're addressing these issues almost on a daily basis, because it's a lot easier to stand for resiliency when the wind is at your back, and got budgetary room to take some of these initiatives, you have the time and the resources for training and for different programs and for resourcing CSR and ESG functions. Now, what happens when there's major reductions to OPEX? It's a lot more difficult to stand up and build those programs when you're facing market headwinds. So this will be an interesting time, and I think you're absolutely right. I think the boards are gonna have to show some real leadership, and one of the things to look at is, where are we cutting OPEX and what are our timelines and reasonable times to get back up to speed, and how are we gonna pay people to do that?
0:22:11.5 Cindy Moehring: Yeah, yeah. So as we think about coming out of this current moment that we're in and moving forward, of course, we've got students in universities, or not in universities, but attending universities all over the world right now, we're dealing with this current situation, and they are the business leaders of the future. So what would you say to the universities right now about the three most important things that they should be doing to help create ethical business leaders in the future to deal with the new normal?
0:23:00.5 Richard Bistrong: I think part of it is giving students real world risk dilemma workshops to bring them through the what actually happens. I think a complement to that is real world case studies and to have programs, courses, guest lectures that help them understand how to embed risk and how to embed resilience, sustainability into business practices. We've got a whole generation of students, whether they're coming through law, undergraduate business programs that have such a unique opportunity as future leaders, while time is on their hands, is to really understand how these issues operate in the real world and to think about what that might look like to them when they go out into the workforce. And I think part of this, and I talked about this in The FCPA Blog article, Cindy, is we just need to slow down. There's just going to be such, I think a business call to move quickly, and that's what concerns me the most. And I talked about this on a personal level, when I got home from prison was wanting to move too quick and too fast, and not thinking about what should I be doing in the long-term here, and I think that's applicable for compliance commercial business leaders and for students to think about as well.
0:24:44.2 Cindy Moehring: It sounds like they need to be also trained to and educated on how to ask the right questions today in the business world that are gonna be different than they were before. In my view, I don't really see it as an either or, like how do we meet our numbers this quarter or how do we be ethical and do that in the right way, but almost thinking about it, it's all together, how do we create the most value and do that in a way that is going to meet the numbers that we wanna meet as a business, but do it so it creates value for all of our shareholders and hold those things, the tensions that may be created together in balance and not try to think about it as an either or, so that almost comes to me, back to the point of figuring out how to ask the right questions.
0:25:35.9 Richard Bistrong: And I think right there, you just synthesized one of the greatest challenges that there is, which is people, the former Richard Bistrong's feeling like they are in the crosshairs of competing corporate objectives between the pressure to succeed and the pressure to comply. Now, Cindy, I think that it's inevitable that as we get back to business, values are going to get challenged, that's inevitable. Ethical decisions are going to be very complex. So how can we make sure that everyone appreciates and understands that we never have to sacrifice integrity to succeed or to think as an individual, ethical decision-making is delegated to me on my own.
0:26:26.8 Cindy Moehring: Right.
0:26:28.0 Richard Bistrong: So, part of that is making sure that those business pressures and those business goals and the side effects of those, because an incentive and an objective is like a prescription medication, they all have side effects and they take effect the day you put those objectives and incentives in place. And our compliance leaders are... They're not just complaints, I'm talking about HR, finance, or support functions together, when you're talking about what the next phase of business is going to look like, to make sure that the side effects of our commercial decisions are aligned with our values, our culture, and our compliance programs. Even the Department of Justice and the one before that iteration, in the evaluation of corporate compliance programs, they state, Are you considering the compliance implications of your reward systems?
0:27:33.0 Cindy Moehring: Right.
0:27:35.3 Richard Bistrong: So people don't feel like they're in the middle of those competing corporate objectives, and that's where the rubber hits the road moment.
0:27:43.6 Cindy Moehring: Yeah, yeah. And they shouldn't be viewed as competing really, and they should be seen as how do we hold those two objectives in a complementary way? The other thing I think that is going to be challenging for our students, but in a good way, and once they get out of the business world, is this forced disruption has really advanced technology in ways that may have taken four or five years, had it not been for the forced disruption that COVID has forced in front all of us to leap frog over. Some inventions that sort of like when India leapt over landlines and went straight to mobile phones. So I think that our business leaders of the future are gonna be on the front lines of thinking about business decisions that have moral and ethical and values implications that we can't even think about yet today, as opposed to prescriptions, it comes back to, again, how do we help educate them to ask the right questions when they're faced with a path that no one has created the road for that path before, they'll be blazing the trail.
0:28:54.1 Richard Bistrong: And Mary Gentile, who you've interviewed, gives us such a wonderful road map for that, which is to unpack those inevitable ethical dilemmas in a safe spot and to start thinking about what the future will look like on a Zoom room or when we're all back together in a conference room, and to think about what those decisions might look like and to discuss what are the paths to success before we're in the middle of that risk. That's why I'm such a fan of her work is if it's inevitable, why do we have to wait till we're in the middle of it to figure it out?
0:29:43.6 Cindy Moehring: Yeah, yeah, exactly. Well, Richard, this has been a great conversation. Thank you so much for taking the time with us today. I do have some fun questions that I like to wrap up with, just so everybody can get to know you a little bit personally. What about a fun that you've read for fun, book or movie or podcasts you've listened to for fun, but that had a really engaging ethical or moral dilemma attached to it?
0:30:14.5 Richard Bistrong: Oh, my gosh, what I really enjoy are books that are not written specifically about compliance, but that have tremendous compliance implications. To me, that's a lot of fun. Like the culture map, for example, is a foundational compliance book from my perspective, to understand how different teams from different cultures might relate to one another. There is a great book called Fusion by Denise Lee Yohn, which is about how great brands have fused together like outward-facing marketing messages with internal culture. Now, that was really a book written for marketing and business leaders, but it's another wonderful foundational compliance book. I really enjoy when I find a little nugget of, I wasn't expecting this to be a compliance book, but yet it has real compliance value. I just love when I stumble on those gems.
0:31:27.9 Cindy Moehring: Yeah, I agree with you. And it's really the new way of thinking about it. Ethics and compliance should be embedded into just the basic operationalized business processes. And so when you find that gem in a book that was meant for marketing, it speaks to the hearts of the ethics and compliance professionals, so that's great. Well, Richard, this has been a fabulous conversation. I really enjoy you taking the time with us today, to share your views on all of this, and best of luck to you as we get through this period of time here so that we can hopefully start traveling again.
0:32:02.0 Richard Bistrong: And the same to you, Cindy. So thank you for your time, it's been a pleasure to share and exchange perspectives today.
0:32:10.0 Cindy Moehring: Absolutely. Alright, thank you, Richard. Bye-bye.
