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Michael Going – CNH Industrial
Building a culture of compliance can be a daunting objective, even for small businesses. However, when a company has multiple businesses and sells its goods in 190 countries, the challenge grows — making it all the more necessary to have the right people and a thoughtful game plan.
Michael Going serves as chief compliance officer of CNH Industrial N.V., a global leader in the capital goods sector. Each of the company’s brands is a major player in its specific industrial sector: Case IH, New Holland Agriculture and Steyr for tractors and agricultural machinery; Case and New Holland Construction for earth moving equipment; Iveco for commercial vehicles; Iveco Bus and Heuliez Bus for buses and coaches; Iveco Astra for quarry and construction vehicles; Magirus for firefighting vehicles; Iveco Defence Vehicles for defense and civil protection; and FPT Industrial for engines, axles and transmissions. Going says all of CNH Industrial’s products are “built with integrity” – a tagline developed by the compliance function.
Recognizing the need to do more with fewer resources, Going subscribes to the saying: “An ounce of prevention is worth a pound of cure.” In other words, he says the best (and most efficient) way to deal with compliance-related problems is to avoid them in the first place.
Going reinforces his philosophy with strong support for effective, proactive compliance policies. “The compliance function cannot and should not be a policing function within the organization,” he explains. “I view my compliance role and our compliance function as a proactive counselor helping our business colleagues understand the legal parameters within which they have to work in achieving their business objectives.” The company’s policies are one way to help colleagues understand those parameters.
With nearly 70,000 employees across the globe, constant monitoring or oversight of the company’s various operations is neither desirable nor feasible for the compliance function at CNH Industrial. All employees have to understand that every employee at CNH Industrial is responsible for compliance.
Remaining up to date on the full spectrum of laws applicable to CNH Industrial is no easy task with widely dispersed operations and multiple international businesses. “There isn’t a comprehensive source of such compliance-related information,” he explains. “Over time you develop a patchwork of sources of compliance-related information, including external consultants, law firms, trade associations as well as the existing reporting services that are more prominent in more heavily regulated jurisdictions like the U.S. and EU.”
Establishing a global honor code
Fostering CNH Industrial’s culture of compliance has been an ongoing effort since Going took his position after a corporate reorganization in which the parent and subsidiary companies were merged into newly formed CNH Industrial in September 2013. In connection with the corporate reorganization, the chief compliance officer position was created. As general counsel for the publicly traded subsidiary, Going’s experience in company culture and operations blended well with his legal background, making him the right candidate for the job.
Stepping into the role, he recognized the necessity of building a strong support structure for the enhanced compliance and ethics program at CNH Industrial. A very significant first step was the creation of a global compliance and ethics committee. The committee consists of CNH Industrial’s CEO, chief financial officer, general counsel, head of internal audit, chief human resources officer, chief compliance officer, chief information officer and the head of the company’s financial services business. Broad senior leadership on the compliance and ethics committee makes a definitive statement about creating an enduring company culture and helps to set the “tone at the top.”
The compliance and ethics administrative structure extends to a second level, with four regional compliance and ethics committees corresponding to the four global regions in which CNH Industrial operations are organized. The membership of each of these regional committees mirrors the global committee. The regional committees help foster the “message in the middle,” facilitate communication flows between the region and headquarters, and provide the compliance and ethics program with greater visibility to local operations, trends and issues.
The regional committees have been helpful in addressing cultural and legal differences between regions, allowing Going and his team to draft global policies that can be modified, to the extent necessary, to address regional disparities. Thinking about the complexity of it all, Going recalls fondly the simplicity of the Honor Code at the University of Virginia, his alma mater: “I will not lie, cheat or steal.”
Implementing a cultural shift
Compliance principles are becoming more consistent around the world. “You don’t have to worry about where you are,” explains Going, in reference to the company’s fundamental compliance and ethics principles. “Don’t lie, cheat or steal — whether from your own company, competitors or customers — that fundamental concept fits all of our operations. We try to sensitize everyone to those basic ideas, through policies, communications and training, and get them to think about them in their day-to-day activities. It’s a challenge, but a valuable objective – especially when you think of the costs of noncompliance.”
Promoting a widespread company culture of compliance and good ethics requires many things, including effective communications and technology. With the help of Internal Communications, the compliance team set about to develop a comprehensive communications campaign to weave the code of conduct and company policies into physical workspaces and digital platforms, from posters in production plants to features in CNH Industrial’s internal publications. In addition, a multiyear training plan incorporates in-person and online training for employees to reinforce values, policies and procedures related to ethics and compliance.
Another critical component of the compliance and ethics program is a reporting platform — the CNH Industrial Compliance Helpline. The platform allows anonymous reporting (where legally permitted) for employees at all locations and is managed by a third party. Going says the Compliance Helpline, which was launched in January 2015, is a quantum leap forward from the prior whistleblower hotline that, for a variety of reasons, was not used very much.
Going cites language barriers, infrastructure failings and other cultural and physical barriers as possible causes for the lack of use of the former whistleblower hotline. But in 2015, the help line was reborn with expanded technological infrastructure and improved cultural awareness and a supporting communications campaign designed to educate the company’s employees and build trust.
“Part of why I believe it wasn’t being used previously is that it was way too U.S.-centric,” he explains. “We needed a system that offered multiple means of reporting or asking questions, taking into account different languages and applicable laws. The Compliance Helpline was designed to be multicultural as well as accessible to employees and third parties.”
Since the launch of the Compliance Helpline, Going and his colleagues are pleased with its growth. “Things are progressing well,” he notes. “It’s satisfying that the Helpline is working as intended, getting questions and information from different regions, countries and levels of the organization regarding a good spectrum of problems and issues.” The information collected through the Compliance Helpline gives the company an opportunity to investigate and take corrective action and it gives all employees (and third parties) a safe way to raise issues and concerns.
As expected with a reporting help line, a majority of reports relate to “human resource issues,” which Going says are important, but usually have a lower risk/liability potential than some other issues. Nevertheless, all of the information gathered through the help line is valuable as it gives the compliance function and senior management greater visibility into all of the company’s operations. “The data also helps us deploy our resources in a more thoughtful way by prioritizing problems with a higher risk/liability potential,” Going explains.
A perpetual project
Between the Compliance Helpline, development and monitoring of policies, training, and monitoring legal developments and communications to promote a culture of compliance, Going’s job as chief compliance officer is never done.
“It is not like a transaction where there’s a starting line and finishing line,” Going explains. “This is a perpetual journey and our compliance and ethics program, at least as long as I am here, will continually evolve to take into account the changing landscape. This includes changes in applicable laws, in our businesses and where and how we do business.”
The coming years see continued development of a multiyear roadmap for Going and his colleagues as CNH Industrial morphs compliance strategy into companywide common knowledge.