It can sometimes be very helpful to understand compliance through a simple example. So let's take the prospect of shipping hazardous materials. Many rules are implicated but let's focus on just three for now. You need the right packaging for materials that meet the definition of hazardous, you need the right documentation, and you need to understand where the materials are being shipped. There are many countries that are under sanctions where you can't ship hazardous materials or any materials for that matter. If you're a company that only ships HAZMATs or hazardous materials and it's only one employee who handles everything, then this might not be so difficult. You train the employee, get the right packaging materials, get the proper documentation, get the proper paperwork, give the employee the list of prohibited recipient countries, and let it rip. But what if the company ships some hazardous materials and some that are not? Then that employee needs to know when the rules are triggered and when the rules are not triggered. What if there are many employees in the shipping department? Have you then actually increased the odds of a compliance problem? What if shipping doesn't happen centrally but instead by people all over the globe in different countries and in different roles? Have you again increased the odds of a compliance problem? If so, if you've actually increased the compliance problem, how much have you increased that? What have you done to mitigate any additional risks that you've now taken on? What if a regulatory agency that has oversight of some aspect of production or shipping has announced an audit of these requirements? What if they have the authority to impose multi-million dollar fines, injunctions, or other penalties for violations? What if the board of directors of the company wants to know how the shipping department is managing compliance with all of these requirements? How will you show them your plan and your success? You may show a policy, packaging materials, a system to hold documentation of the HAZMAT shipping, but how will you prove to them and to yourself that they're being used? What type of monitoring, what type of testing, what type of reporting has been put into place if any? These are very important questions that you have to ask yourself and you have to get comfortable with. Let's take another example of how to make a rule stick in a large organization, but this time let's make that large organization a country. So we're going use the example of the first emperor of united China. That's the emperor who established the method for creating the Terracotta warriors that many of you may be aware of or may have possibly seen. These are hundreds and hundreds of warriors made out of Terracotta to reflect the army of the emperor. The emperor wanted this to be done in a very uniform and controlled way, even across a nation of 40 million people where so many of those people were working on these amazing pieces of art. According to The Franklin Institute, which had an exhibit on the Terracotta warriors, "The Emperor relied on the same oversight he used in his army. Everyone was responsible for reporting violations. Reporting went from households to local and regional administration all the way up to the imperial government. Also, the emperor toured his empire to monitor activities throughout his lands. And the tours increased his visibility and signaled his power." What can we learn from this? Well, the modern day compliance junkie might look at all of this and say, "Wait, I recognize some of the concepts here." First of all, there were policies, there were standards as to how these things ought to be built, and there was awareness of those standards that the emperor made sure occurred. We think again modern day of a reporting hotline where people can call and say, "I think there's something going wrong or I have a question about how to do things properly." Well, back in ancient China, those kinds of reports of course weren't made by phone but they were made by neighbors to other neighbors, to family members, to local community leaders to say something isn't working properly. These warriors, these Terracotta works of art are not being made according to standards. Actually, many of those works of art had marks or stamps on them so we could tell where they came from, who was working on them, and who needed a talking to. Then there are assessments. These are important tools for the modern day compliance professional. The assessments were done at that time too by these tours throughout the country to see how things were going. The last that I think is so powerful from this example is the tone at the top. Compliance professionals in today's day and age talk pretty regularly about the tone at the top. That any organization that really wants to commit to adhering to whatever standards apply needs the leadership to come out there and to say, "This is important to me. This is important to the board. This is the kind of thing that we are watching and we want it done right, and we want anybody with questions or concerns to raise them and you have our support." Well, certainly the tone at the top was stated by the emperor, I don't know how supportive or how intimidating that was, but you can be sure that it came from the top echelon at that time.
