Even in the best of times, a transition from one president to another is no easy task, even if the transition involves just one political party. 2020 and 2021 hardly qualify as the best of times, though, and this was the least-smooth transition in our lifetime.
Not only were there the changes that come with a new family entering the White House, but the former president added magnitudes of greater difficulty to the peaceful transfer of power, given his words and actions of trying to overturn the election results.
Still, despite all that’s happened, we have a new president, a new administration, and with that will be new priorities, goals, and plans for achieving them. And, oh yeah, COVID-19 continues to rampage as fiercely as ever, as if there wasn’t enough on which to focus without the fight against the pandemic now in its second year.
So while President Joseph Biden will concentrate efforts of ending COVID, rebuilding the economy, and working to bring the differing factions of America back together, the people in his administration will work with the career civil servants to enact policy changes that will affect companies and how they conduct business.
This means ethics and compliance teams will be working overtime to try to understand what changes are coming, what impact they will have, and what the plan needs to be to successfully adapt to whatever comes along as a result of these changes.
While some hints can be gleaned from the choices President Biden has made for his cabinet, and the priorities he’s outlined, I moderated a panel last week where I asked three experts who have extensive experience in calibrating risks, working ethics and compliance cases through a change of administrations, and who have all worked on matters involving trade, sanctions, and anti-corruption, about what they see happening, and how to navigate these transitions.
It’s important for compliance programs to look the new administration’s priorities, and to see how these may change their risk outlook, said Stephen Weinstein, the new chairman of the Bermuda Business Development Agency who formerly worked at Renaissance Re, where he served as group general counsel and chief compliance officer.
The Biden administration has set a number of priorities, none more important than gaining the upper hand on the COVID-19 virus and working to restore the economy. The new president also has signaled his intent to emphasize issues of racial justice and to address situations of inequality, and has pledged decisive action to combat climate change, said Weinstein.
To this end, Weinstein talked about a new executive order mandating U.S.-sourced production when possible, and new rules regarding federal contractors and making sure they are equitable in their compensation policies and opportunities for career development and advancement. A powerful statement by the new president was when he went on camera and told federal appointees there was zero tolerance for disrespecting colleagues.
COVID and all the money being spent on it will result in regulatory scrutiny, and likely result in prosecutions for all types of fraud and misconduct, said Sharie Brown, a partner at Troutman Pepper involved in government investigations, compliance, and enforcement. Some companies already are being investigated for possible misrepresentations they made when they applied for and took some stimulus loans, she said.
“There will be PPE fraud, relief and loan fraud, maybe even be vaccination fraud,” she said. “We do expect that and expect to see more prosecutions and investigations.”
Catherine Muldoon, the chief legal officer at global logistics company BDP International, said regardless of administration, it pays to know the latest Department of Justice guidance, and make sure you are keeping up with how regulators are changing their perceptions of what makes for a robust and effective ethics and compliance program.
It’s no longer enough to say you have an E&C program, or that policies are in place, that there is language in your contracts, or that your make people get certifications, or undergo training, said Muldoon.
“You need real-world examples to make sure your employees are trained,” said Muldoon. “You need to shift to actually thinking...to how would I prove it if I was asked how I knew that I am compliant?”
Brown said it was likely that President Biden, as part of the Obama administration that saw many of its policies overturned during the Trump term, will look to restore some of what was in place previously, and that can provide clues as to possible enforcement intentions.
One positive change she expects: greater independence for regulators and agencies to do their jobs. Brown said these past four years it sometimes has been difficult to get guidance, whereas in previous administrations one could make a call to an agency and get a good idea of what to expect, how to interpret a regulation.
(Click here to watch the webinar.)
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About the Author
Joined LRN in October 2018 after 30 years as a journalist, including seven years at The Wall Street Journal, including Risk & Compliance Journal and was a creator of the WSJ Crisis of the Week column. In 2015 was named one of the 100 most influential people in business ethics by Ethisphere Institute. Spent 14 years as a reporter in Hawaii, 11 with The Associated Press.More Content by Ben DiPietro