Don’t Be Evil: Imagination at Work with Google and GE’s Compliance Programs

I am attending the Global Ethics Summit 2010, hosted by Dow Jones and Ethisphere. Here are my notes from this session:

General Electric and Google are two very different, yet equally substantial powerhouses with varying businesses to each company’s name. Ensuring compliance with U.S. and foreign regulations while maintaining Google and GE’s respective competitive edges in today’s increasingly complex and competitive marketplace can be daunting, to say the least. Brackett Denniston, Senior Vice President and General Counsel for GE, and Andy Hinton, Chief Compliance Officer and Associate General Counsel for Google, compare notes about how each company tackles critical issues, what has worked and what hasn’t and what issues most concern them going forward.

This session was held during lunch so my notes are sparse.

My first observation is that Brackett showed up in a dark suit, white shirt and a blue tie, looking very GE-ish. Andy was dressed in jeans and sport jacket, looking very Google-ish. (Although Andy came from GE and is a self-proclaimed GE disciple.)

Andy uses lots of measurements in his compliance program. He is trying to model the Google program on his experience at GE. GE has a reputation for lots of measurement

It is important to let people know that their jobs are at risk for compliance failure. You don’t want to just find scapegoats. You need to find the real bad actor.

You also need to reward employees for good behavior. It is important to point out the good stuff and the bad stuff.

Response is they key part of the process. Get the facts fast and disclose fast after you have those facts.

Google relies even more on their brand than GE. It’s hard to replace a nuke reactor. It’s easy to switch search engines.

Without your reputation, it’s hard to business. Your company’s reputation is a big part of a company’s value.

Build a case for value. You are better off missing the numbers than creating a reputational risk. Balance the risk and cost of the violation against the small dollar value of the gain from the bad act.

As long as you have board and CEO buy in then you can do a lot with limited resources.

You want to hire and promote people you can trust and that live and breathe the company culture.

The compliance group at Google is not trying to be cutting edge, unlike the rest of the company. The want to be block and tackle.

In regulated enterprises you need to have heightened awareness and a different approach to compliance. And there is more regulatory risk coming. Even China is promulgating thousands of regulations.

You have to be better than merely meeting the base regulations.

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