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Uber's Troubles: A Compliance Wake-Up Call No Matter How Regulated You Are

    Client Alerts
  • June 26, 2017

I can’t help myself; when I read some of the troubling reports about Uber’s workplace culture, which has contributed to executive ousters and the need to hire one of the highest-profile lawyers in the country, I think, “If only they had a culture of compliance.”

wrote last month about “the way of compliance” positively impacting a company’s culture. With Uber, we see the drastic flip side. Yet, I know that many corporate C-suite and boardroom folks continue to think that compliance is not for them because they are not “regulated.” The logic can be hard to argue with – lawyers and compliance professionals hear from the business folks things like: “We are not a highly regulated company” or “We do not have a lot of compliance worries, therefore we are not going to spend money on a healthy compliance program, training or other ‘distractions’ from what is our high-tech, high sales, high innovation, high [fill in the blank] world we must live in to drive value for our owners.” And that works … until it doesn’t. As one of my favorite colleagues used to say, “That dog don’t hunt no more.”

If C-suites don’t understand that, boardrooms should. Action items from the Uber reports include creating a more independent board, elevating the role of a diversity officer, establishing leadership training for executives and rolling out mandatory sensitivity training. Where does your company stand on those things?

Tone at the top does truly matter. Eventually, if the lead executives don’t get it, a company will be doomed. Enron comes to mind. Of course, the board’s single most critical role is choosing the top executive – and Uber’s board will be under a bright spotlight as it searches for the company’s next leader. Beyond hiring though, how can you build a better tone? If it truly does not exist, executive coaching can help. Scare tactics can help. More often though, a positive tone does exist, it is just not amplified. A good legal and compliance team can help amplify it with creative use of videos, employee communication and even training.

From there comes consideration of how your company is regulated. Is it true when your business partners say, “We aren’t regulated”? All publicly traded companies are regulated by the SEC and the exchanges upon which they trade. And any employer has many regulations to consider, from the headline-grabbing harassment and discrimination all the way down to the seemingly mundane I-9 forms. What about advertising? If you advertise at all, the FTC has something to say about that. Do you sell to the federal government? If so, it is quite likely that you are a government contractor – have you considered the FAR lately? With financing firms, the CFPB could be ready to ask you a few questions. Not sure what those are? Well then, I’ve probably made my point. Or at least I hope so.

And how does that relate to my “way of compliance?” An enterprise-wide compliance program that puts an emphasis on creating a culture of openness and accountability can propel value through, at a minimum, avoiding compliance failures and attracting employees who want to do the right thing while driving results.

This alert was written by Jane Lewis-Raymond when she was a partner at the firm.