Mayer Brown Partner Audrey Harris on BHP Australia Business Capture FCPA Flat Whites and Doctor No

Audrey Harris promised herself that she would never agree to become chief compliance officer (CCO) of a major multinational corporation.

Audrey Harris
Mayer Brown
Washington, D.C.

But she did just that, moving her young family in 2015 from Washington, D.C., where she was a partner at Mayer Brown, to Melbourne, Australia to take the position of CCO for mining giant BHP Billiton.

Now, after three years, she is back in DC again as a partner at Mayer Brown.

It’s an unusual career move to go from outside defense practice to a major multinational and become CCO.

“It was something I said I would never do,” Harris told Corporate Crime Reporter in an interview last week. “I had seen the struggle that CCOs go through. It is one of the toughest jobs in the world. You need a real combination of the right people and the right company to make it a success.”

“You need a company that has four things. They value their brand. They have pride in their name and pride that that name stands for ethics and integrity. They are supportive of an empowered compliance constituency. And they have the ability to listen to a position that compliance is value added. It’s not just a cost center. But it can add value to the brand and to the company. And fourth, it has the right resources or the ability to get the right resources, the people in the right positions with aligned incentives.”

“I saw those four characteristics at BHP. And I also saw three other things that were unique to the company that I thought could draw me out of private practice. One was commitment to safety. One was unique systems. And the third was structure.”

“I find that companies that have a real commitment to safety also have compliance pull for ethics and integrity. BHP’s commitment to safety in mining is a number one priority.”

“Second were their systems. The company has spoken publicly about its investment in a global finance system. That is a unique characteristic of BHP.”

“Third is their structure. The company had just gone through a demerger with a new footprint. And they went through a globalization, a new structure, which allowed for enhancement in the control and gatekeeper functions, from HR, ethics and compliance to finance.”

“So I said –  maybe this is the time, this is the company where instead of helping folks build something from outside, I could help build something from within.”

“Without the right people and without the right company, the CCO can become one of two things. Doctor No, in which case the business goes around or circumvents the CCO. Or the CCO can be worn down and become more form over substance. Making sure that the boxes are checked rather than asking – are they the right boxes?”

“It was so important to me that it was the right company. And that’s what I found when I got there –  it was the right company.”

In May, 2015, the Securities and Exchange Commission charged BHP Billiton with violating the Foreign Corrupt Practices Act (FCPA) when it sponsored the attendance of foreign government officials at the Summer Olympics. BHP Billiton paid a $25 million penalty to settle the SEC’s charges.

The settlement with the SEC  required the company to report to the SEC on the operation of its FCPA and anti-corruption compliance program for a one-year period.

“One of the first things I looked at as a CCO was that first year self reporting requirement from the SEC under the settlement,” Harris said.

Was there any agreement with the government to put in a new CCO at BHP?

“Not that I’m aware of. Everything is very clear in the administrative order and the documents. I am not aware of any such agreement.”

We all hear stories about chief compliance officers who didn’t have the positive experience you say you had at BHP. How does it break among CCOs?

“A chief compliance officer has to be three things,” Harris said. “You have to be a guide, to show people how to do the right thing. You  have to be a problem solver. But you also have to be a gatekeeper. You have to keep your seat at the business table or earn your seat at the business table. But at the same time, you can’t sacrifice the compliance brand. You are a gatekeeper. You can have a lot of stresses that you might not even see with the general counsel.”

“So when you see disgruntled chief compliance officers, it’s the nature of the role. There are things that you can do. One is alignment of incentives. Aligning your reporting, your structure and the incentives of the company before you take on that role. Supporting compliance and integrity. If you are perceived as form over substance, if you are perceived as Doctor No, you will become circumvented. You need to continually reinvent your program and continually reinvent yourself to play all three of those roles all the time.”

When you say Doctor No, you mean?

“If you are perceived as saying no to everything, the business is going to say — what can I do to not have to deal with them? It doesn’t mean that you have to sacrifice what is right. You don’t. You have to be an educator and a guide to show them how you can bring long term value to what they are doing. It can be the market differentiation for them. It can allow them to go into jurisdictions that they might not be able to do without that strong compliance program. And it can avoid both individual and company risk for them.”

“You need to be an educator and a guide. If you are perceived as Doctor No, or too difficult to deal with, then you are not doing what you should be doing — which is being that guide and educator, being that gatekeeper. Directly or indirectly, you can be excluded from that table. And it’s so important that you remain at the table.”

Whistleblowers often say that chief compliance officers are nothing more than the arm of the executive suite of the corporation.

“That’s business capture. That’s the other side. The Department of Justice guidance in 2017 talks about a chief compliance officer out from underneath the general counsel, with a direct line reporting to the board. Those are the structural issues we talked about earlier. If you don’t have those, then that business capture becomes a concern. Even short term, being in a role for three years, allows for rotation and allows them to not be in a situation where they could experience business capture. And they feel empowered to make the right decisions when they are sitting at that table.”

“But it’s very much a balance. You need to be at the table. And you need to be included and not be form over substance if you want to make the biggest impact and change culture not only within a company, but within an industry or within a country.”

You were three years in Australia and now you are back. What were some of the cultural shock problems you faced?

“Melbourne loves their flat whites.” (Flat white is a coffee drink consisting of espresso with foamy milk.)

“I am a Melbourne coffee drinker. Coming back to the States and drinking coffee here has been very difficult for me. That was a bit of a culture shock.”

“My children will forever not call it a trash can, but instead it’s a rubbish bin. I never did pick up the Australianisms of ‘I reckon’ or ‘I’m keen.’ But my children did. They think all candies are called lollies. And they do add ys onto everything. It’s not sunglasses but your sunnies. It’s not the good guys and the bad guys — but the goodies and the baddies. They do have the slang and the vernacular of Australia.”

[For the complete q/a format Interview with Audrey Harris, see 32 Corporate Crime Reporter 44(12), November 5, 2018, print edition only.]


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