One of the refrains we heard this past year as a justification for bailing out certain companies with our hard earned taxpayer money was that they were too big to let fail. If we held their head under water until the last air bubble came to the surface the economy would drown with it.
Maybe they were too big to let fail; but, clearly they weren’t too big to mess up or prop up, no matter what it cost us.
The phrase “too big to fail” got me thinking about how other businesses might harbor the same sentiment, except in a “we’re too big to fail because we’re too smart to get it wrong” kind of way. In other words, we’re too smart to loose. We’ll always be able to figure it out the answers. (Like that classic Supremes song: “Ain’t no problem high enough, Ain’t no problem wide enough, to keep me from getting it to you babe.” Problem? Mountain? It’s an obstacle, OK? )
But seriously, it also reminded me about the challenges many lawyers and other ethics and compliance specialists face when trying to help organizations improve their risk profile. How even when faced with a glaring gap in a system or process, senior management may be loath to spend money on plugging the hole if there haven’t been any “problems” in that area.
“It’s not in the budget,” they say.
“We already have a compliance program. No need to fix it if it isn’t broken. We’ll wait until a problem is real, not just some theory problem.”
Of course, by the time its “real” the legal machinery could be fully engaged by way of lawsuit or governmental investigation and the privately funded “bailout” begins – the fight for survival at any cost.
Even a private bailout reallocates precious resources from other business initiatives and drives shareholder value down. That’s why I was saddened to read the other day of an online poll conducted by Deloitte Financial Advisory Services that found approximately one-third of the companies surveyed had no Foreign Corrupt Practices Act (FCPA) compliance program even though the rate of FCPA enforcement has been increasing.
Maybe your company really is too smart to loose. Maybe it will be able to brace itself before impact, catapult itself to safety, and land on its feet like a corporate super hero.
Then again, maybe not.
Why be a crumpled fender (or worse) on the shoulder of the competitive highway when with a little planning and foresight you can keep rockin’ and rollin’ without missing a beat? According to the Deloitte poll most businesses simply did not understand the severity of the penalties associated with an FCPA violation. Good business practices and processes are a safety net that serves as an early warning device. It alerts you to potential problems while they’re still small, manageable and cheap to solve.
Having such a system in place, now that’s being too smart to loose.