Hui Chen on the State of Corporate Compliance

The last time we interviewed Hui Chen, in July 2017, she was leaving her post as the Justice Department’s compliance counsel.

Hui Chen
Ropes & Gray

In that role, Chen advised federal prosecutors in their evaluation of corporate compliance programs.  

She worked alongside prosecutors and independent monitors after resolution to evaluate whether the company’s implementation of new compliance measures were effective.

Hui was also the architect of the Department’s Evaluation of Corporate Compliance Programs.

She currently serves as a consultant at Ropes & Gray’s Insight Lab, the legal industry’s first analytics and behavioral science consulting group. 

In this role, she advises clients on the design, implementation, and assessment of ethics and compliance programs.

In the private sector, Hui has held high-profile, in-house compliance positions at Microsoft, Pfizer and Standard Chartered Bank.

We wanted to get Chen’s take on Assistant Attorney General Kenneth Polite’s announcement earlier this year that chief compliance officers would have to certify that compliance programs are well designed, adequately resourced and empowered to function effectively and work in practice.

From Chen’s experience, for major corporations, what percentage of compliance programs are well designed, adequately resourced and empowered to function effectively and work in practice?

“I would say that would be a minority of companies’ programs,” Chen told Corporate Crime Reporter in an interview last month. “I also recognize that there is a standard problem. What is well designed for you might not be well designed for me. What is adequately resourced to you might not be adequately resourced to me. What do those adjectives mean? They are very subjective.” 

“There is one trait of compliance officers that I have professional respect for – the good ones, the ones who do a good job. And that one trait is that they are never satisfied with their programs. One of the traits that I often see among compliance officers who do not perform as well is that they seem incredibly satisfied with their programs.”

“But we are talking about subjective standards, nothing objective, comparable and measurable here.” 

But from your point of view, you believe that only a minority of major corporations meet that test?

“In my subjective opinion, yes.”

Does that mean that a minority of compliance officers are conscientious and doing a good job?

“It’s not as simple as that. Sometimes someone can be very good, but they can have their hands tied behind their back every single day, every single moment.” 

Let’s take a competent, conscientious chief compliance officer. Let’s call it the CCCCO. And they are having difficulties within the corporation. 

“If they are lucky, the conscientious competent compliance officers are working within organizations that give them the resources they need, and support them in the activities they want to initiate. But I have seen many competent, hardworking, respectable compliance officers who are not given adequate resources. I have been in those situations where I was not given the resources I needed, even when I was very conservative in asking for the resources.”

“A conscientious compliance officer doesn’t ask for the moon. They ask for what they can justify, what is realistic and what makes sense. You have made careful decisions about the budget you are asking for. But even doing that, you get one tenth of what you ask for. And you are not given access to the people and the resources that you need to help you do your job.”

After these comments about certifications by Kenneth Polite, many compliance officers were concerned that they were being set up for punishment if things didn’t work out. What about that concern?

“They are right to be concerned. I can see two possible scenarios. One is the conscientious compliance officer. Every path they try to take, they are being blocked. Everything they try to do, their hands are tied behind their backs. And then comes time for certification, what do they do? If they say no, I don’t believe our company’s program meets the standard, they are either going to be fired or forced out. If they do say yes, they are setting themselves up for potential prosecution. They would have signed something they don’t believe is accurate. They are stuck between a rock and a hard place.”

“I have also seen compliance officers who will sign anything. Once a company knows that they are heading toward a resolution and that at the end of the resolution, the compliance officer is going to have to sign, the company might say – let’s hire someone who will sign anything.”

What do we know about corporate monitorships?

“We know very little. We don’t even know how to measure them. How do we define whether a monitor is successful or not. We don’t have a set of measurements, we don’t have a set of standards.”

It sounds as if you are skeptical about the work of corporate monitors.

“I’m not skeptical. Nobody has information. I just need to see the data.”

“That said, I have experience in working for monitors. I can tell you that the approach is inconsistent across the board. One monitor will approach things very differently from another monitor. If your approach is different, what you are going to achieve is different. What might pass muster with one monitor, may not with another monitor.”

“With one monitor, a company may be able to get away with certain things, but with another monitor, the company probably wouldn’t.”

Isn’t one problem that the company nominates the monitor?

“Exactly. What does that create?”

I’m guessing any given corporation wouldn’t put forth the name Hui Chen as a potential monitor.

“Probably not, unless they really wanted reform.”

The reason for that?

“I am known as someone who won’t put a spin on something I don’t believe in. I’m also someone who is known for demanding data and evidence.”

Hui Chen is an outlier in the field. Why is that? Why can’t we have more conscientious and competent compliance officers and corporations? 

“That’s a question we can write books about. To start off, for most companies, if they were left to their own devices, they would not have compliance officers in their company. For many companies, they see compliance as a department that ties your hands. Why would you want that in your company? Because someone tells you – you have to have it. If you don’t have it, you are going to get into trouble. Or if you get into trouble, you have nothing to defend yourself with. You kind of need a compliance department.”

“You don’t know how many real life stories I have heard about compliance officers who are being interviewed and are specifically told – do you understand that we will pay you, but we don’t want you to do anything?”

It would be like a figurehead position?

“In many companies they are.”

If we could get the transcripts of compliance officers confessing to Hui Chen, it would be a bestseller.

“I have considered writing a book about the many compliance officers who have been fired, who have been harassed, railroaded in every which way. I thought about putting together a book on it.” 

“I will tell you a real life story with my own experience. When I was in house compliance, I once expressed concern to my superiors about the quality of some of the audits that were being done. The response I got from the head of compliance in this company was – Oh, but do you really want auditors who can find things?”

“That was his answer to me.”

Let’s say in an ideal world, you were approached to be a monitor, would you do it?

“If they are brave enough to approach me, I would do it. I assume they had come to me with their eyes wide open. My reputation is one for integrity, outspokenness and demanding evidence and outcomes. But I also have the reputation of someone who is very practical. Monitors charge by the hour. I would not be the kind of monitor to just run up the bill. That’s not what drives me. I would assume that if a company would want me to be a monitor, they would come in knowing these things about me – she would demand integrity, but she wouldn’t run up ridiculous bills, wanting to do site visits every month. I would not be an indiscriminate, boil the ocean type of monitor.”

[For the complete q/a format Interview with Hui Chen, 36 Corporate Crime Reporter 32(13), Monday August 8, 2022, print edition only.]

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