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Volume 27, Issue 3

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February 27, 2014

Alfred the Great, GE and the Management of Third Party Risk

I am currently studying Medieval England including the reign of Alfred the Great. As you might expect with someone monikered as ‘The Great’ he is certainly considered right up there with the greatest Kings of England. Not only did he largely drive out the Viking invaders from his country but he also set the stage for the unification of England under one crown, for the first time since the days of Roman Britain under the Caesars. One of the innovations he developed was fortified towns, called burgs, from which to resist Viking raids and incursion. But more than simply walled cities for defense, within these fortified towns was a wide road running down the middle of the town called the ‘High Street’ and a street situated next to the town’s walls appropriately called ‘Wall Street’. These streets were wider than the others in the town to facilitate the movement of troops in the time of crisis, such as a Viking raid. In other words, Alfred evaluated the risk to his kingdom and put multiple layers of steps into place to manage those risks.

In the Foreign Corrupt Practices Act (FCPA) compliance world, one of the key components that the Department of Justice (DOJ) wants to see is a risk assessment and a company managing its risks, based upon said risk assessment. One company’s response to a risk or set of risks does not necessarily mean that another company must follow it. The DOJ’s Ten Hallmarks of an Effective Compliance Program are broad enough to allow companies to manage their own risks, hopefully effectively. I thought about this concept when I was listening to a presentation by Flora Francis and Andrew Baird of GE Oil & Gas at the 2014 SCCE Utility and Energy Conference in Houston this week on GE’s third party risk management. First of all, if you have the chance to hear a couple of nuts and bolts compliance practitioners from GE like these two speak, run, don’t walk, to their presentation. GE’s commitment to compliance is well known but also the company’s willingness to share about their compliance program is a great boon to the compliance community. Lastly, is the gold-standard nature of the GE compliance program and while it may be more than your company needs to manage their own risks, the GE compliance regime does shine a light that we can all aspire to in our own compliance programs.

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http://tfoxlaw.wordpress.com/2014/02/27/alfred-the-great-ge-and-the-management-of-third-party-risk/