About Board and Fraud

Board and Fraud is a blog that aims to bring a practical approach to issues facing the board of directors and the audit committee specifically in the area of governance, risk management, compliance, and internal audit, with a strong focus on fraud, ethics, and internal controls.

The Role of the Board of Directors in Compliance Oversight

Under the U.S. Federal Sentencing Guidelines, in order to receive credit for having an effective compliance program, and thereby reduce the fines imposed on the organization, a Board of Directors must be “knowledgeable about the content and operation of the compliance and ethics program,” and must “exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.” In addition, in criminal actions against a business organization, including the FCPA, the DOJ’s Justice Manual instructs prosecutors to ask and answer several questions, including: 1) Do the Directors exercise independent review of the company’s compliance program? and 2) Are Directors provided timely and accurate information sufficient to enable the exercise of independent judgment?

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COVID-19 – Coronavirus: Crisis Management, Business Continuity, Fraud, and More!

Crisis Management: Some of the biggest mistakes made when handling a crisis are not dealing with the problem head-on, thoughtless or insincere comments, lack of communication with stakeholders, unprepared spokespeople, getting defensive after receiving backlash, or, sitting back and letting the problem grow. Domino’s, Sony, Samsung, BP, United Airlines, Equifax, KFC, are all good examples of companies who stumbled with crisis management. Companies should study these crises and learn from the mistakes!

In addition, fraud, compliance, and integrity risks may change. A crisis situation can and often does increase the pressure on senior management and of course salespeople to meet their sales targets! Deviant behavior is easily justified.

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DOJ Updates FCPA Corporate Enforcement Policy

On November 20th, 2019, The Department of Justice (“DOJ”) announced updates to its Foreign Corrupt Practices Act (“FCPA”) Corporate Enforcement Policy. While the changes were relatively minor, the modifications underscored important principles surrounding the FCPA Corporate Enforcement Policy.  

This latest update follows extensive revisions made in March of this year and the announcement that the FCPA Policy will apply as non-binding guidance for all criminal cases; all reflect DOJ’s continued efforts to promote self-disclosures and provide clarity on DOJ’s approach for companies deciding whether to self-disclose. There is little doubt the DOJ has landed on a Corporate Enforcement Policy that took years to develop. The FCPA Corporate Enforcement Policy now applies to all corporate criminal prosecutions except Antirust Division criminal prosecutions that are guided by the Leniency Program. The DOJ is consistently applying the principles and appears to be very comfortable with the results.

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Speaking and Training on Fraud, Compliance, Ethics, and More…

Welcome to my site. I have spoken and been the keynote speaker for many conferences, including the ABA, ACC, ACFE, IIA, and IMA to name a few. I have designed customized training for the board, senior leadership, legal, compliance, internal audit, and others for some of the world’s largest organizations.

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e-Guide for Chief Compliance Officers

This e-book is intended as a guide for Chief Compliance Officers (CCOs) and those responsible for developing and implementing compliance policies and procedures for an organization. Compliance, when done properly and embraced fully, should be seen as a necessary business process. It is our vision that companies have more than a best-in-class compliance program going forward.
The time is now for companies to take the next step up to make compliance a part of the business process of the organization. This would not only allow companies to meet the Department of Justice’s requirement that compliance programs be more fully operationalized, but it is our firm belief that a more effective compliance program will make the company’s internal controls operate more efficiently and enable it to operate more profitably. With the increased efficiencies for compliance offered by data analytics and AI, a robust compliance program can demonstrate internal commercial inefficiencies which can be remediated for greater return from assets.

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Crisis Management – Lights, Camera, Action!

Some of the biggest mistakes made when handling a crisis are not dealing with the problem head on, thoughtless or insincere comments, lack of communication with stakeholders, unprepared spokespeople, getting defensive after receiving backlash, or, sitting back and letting the problem grow. Domino’s, Sony, Samsung, BP, United Airlines, Equifax, KFC, are all good examples of companies who stumbled with crisis management.  Organizations should study these crises and learn from the mistakes!

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Theranos: Too Good to Be True!

Overview – Fraud vs. Groundbreaking Science

Elizabeth Holmes (“Holmes”) founded Theranos in 2003 at 19 years old and dropped out of Stanford University to run the company. She marketed a

Board Member Composition: Participants, Passengers, and Prisoners?

As the organization’s ultimate decision-making body, the board of directors plays two critical roles: overseeing management on behalf of shareholders and other constituencies; and advising management, albeit with limited involvement in everyday company operations – nose in, hands off! The board should not attempt to run the operations of the organization; it should oversee how management runs the company.

I am amazed at how many members literally are not engaged, which reminded that one of the traits of an effective leader, or Pilot, is being a good team builder. But how can you build a good team if you don’t understand the players?  I’m not speaking about understanding their skills, I am speaking about understanding their level of engagement.  That amorphous concept most ignore.

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Corporate Governance – Commonsense Principles 2.0

Corporate governance is the collection of systems and processes that an organization has in place to prevent or dissuade potentially self-interested persons from engaging in activities detrimental to the welfare of shareholders and stakeholders and helps to promote better overall decision making.

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Jonathan T. Marks, CPA, CFF, CFE

Partner, Firm Practice Leader – Global Fraud & Forensic Investigations, Compliance, & Integrity Services

Jonathan T. Marks is the original author and producer of Board and Fraud. He specializes in global and complex corporate investigations (White Collar Crime) and other investigations. He has 30+ years of experience working closely with clients, their board, audit committees, senior management, internal audit, compliance, legal & outside law firms on global and domestic fraud, misconduct, cyber incidents, bribery, money laundering, whistleblowers, retaliation matters, and conducting investigations when appropriate (10A, books and records, cross-border, FCPA, regulatory etc.). Jonathan determines economic damages, performs root cause analysis, develops remedial procedures, and designs and enhances governance, global risk management and compliance systems along with internal controls and policies and procedures. He also monitors tactics to mitigate future potential issues and testifies in the court-of-law when called upon. 

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