The pumpkins and garish Halloween decorations are out on my front lawn. With the Halloween season upon us, my mind has become stuck on movie monsters and been mixed with compliance. This is the terrible result.
The werewolf is old and widespread legend. Lycanthropes gain the ability to turn from human form into a wolf or wolf/human hybrid. Depending on the legend, there are various methods for becoming a werewolf. In The Wolfman, Claude Raines is bitten in a wolf attack. Unfortunately, that wolf was actually a werewolf and the bite passed on the curse of lycanthopy to him. But other legends have it being a hereditary trait or passed by disease. To kill a werewolf, you need silver. At least that is one of the most popular features of the legends. In The Wolfman, the werewolf is killed by silver topped cane. Later pop culture typically has a silver bullet as the fatal cure.
Two features of the werewolf made we think of compliance.
The first is finding the cause. When it comes to investment fraud or corporate crime, it’s rare that the bad guy (and it usually is a guy) starts off bad. At some point, something goes wrong and the guy steps over the line to be the bad guy. When Claude Raines is bitten, he doesn’t know that the bite was the turning point. But it was, and it lead him down a dark path that eventually leads to his own death.
Enron started out as a legitimate company before it embraced widespread accounting fraud. I believe Bernie Madoff started out as legitimate investment manager before he crossed the line and turned his business into a Ponzi scheme. In reading the story of Sam Israel, you can point to the event that turned him from a struggling investment manager into a fraudster. To make the numbers for his annual report he used an accounting trick to rebate back his brokerage fees to improve the fund’s return. That lie was the bite of the werewolf.
Once bitten, the ordinary man becomes evil. For a compliance professional, the key is to recognize the bite and to recognize when someone has been bitten.
The second feature of the werewolf that makes me think of compliance is the cure.
The “silver bullet” is a straightforward solution with extreme effectiveness. Unfortunately for the werewolf, the silver bullet is death. That’s a bit extreme for compliance professionals. Unfortunately, it’s rare to find a silver bullet when it compliance issues, whether it’s preventing a problem or trying to remedy the problem. If prevention were so straightforward, there likely would not be a compliance profession.
One of the goals of a compliance professional is to prevent someone from shooting your company with a silver bullet because it has turned into a werewolf.