Wielding the Compliance SABR: How Major League Baseball Provides the Blueprint for a Modern Corporate Compliance Approach

Wielding the Compliance SABR: How Major League Baseball Provides the Blueprint for a Modern Corporate Compliance Approach

 Brad Pitt made the professional baseball analytical approach known as Sabermetrics (“SABR”) famous in the movie “Moneyball.” While you may not have heard about the approach prior to seeing the movie, many forward-thinking baseball front offices were mining collections of data for undervalued pieces to their roster puzzles long before that movie entered the pop culture lexicon. Several years later, nearly all Major League Baseball (MLB) executives are taking an analytical approach to roster construction, and those who have been most disciplined about doing so have reaped the benefits in recent years.

The most recent example of an analytics-driven MLB roster construction is the 2016 World Series Champion Chicago Cubs, who ended a 100+ year championship drought by tearing down their roster in 2012-2014 and rebuilding it with an excess of quality position players, with spare parts dealt to improve the team’s pitching staff.  This approach went against the longstanding mantra that championship baseball teams are built by developing a plethora of pitching. Combined with mining mountains of data in scouting, the Cubs and other forward thinking teams like the Los Angeles Dodgers have maintained a leg up on the competition.

You may be wondering why I’ve dedicated 175 words to baseball in an article about compliance. The answer is compliance professionals have a lot to learn from the most forward-thinking baseball analysts, and the United States Department of Justice has begun to sing a similar tune. For much of its history, the compliance profession was built on a subjective analysis of risk assessment. Indeed, a chief compliance officer or legal professional would take a look at the types of risks present in corporate America and make an ad hoc assessment on where the compliance dollars were best spent. This approach has not changed, much as there was little innovation in the way an MLB roster was constructed between 1955 and 2000.

DOJ Provides New Guidance

In February 2017 the United States Department of Justice released its Evaluation of Corporate Compliance Programs. This document contains a series of factors the DOJ now uses to evaluate the effectiveness of compliance programs. Unsurprisingly, the “Filip Factors,” as they are known, take a very analytical approach towards examining the effectiveness of compliance programs. Each of the topics addressed tasks the DOJ with asking questions and collecting data about the cases they investigate, in hopes of building a database of information available to the Department to more effectively investigate (and ultimately prosecute) cases of fraud (and other compliance violations).


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Although the factors discussed in the DOJ’s evaluation are designed to assist the Agency in investigating and prosecuting crimes, there is a wealth of valuable data that can be gained by conducting an audit of your compliance program to determine your weaknesses and fill in the gaps. For example, “Factor 3” is entitled “Autonomy and Resources.” This factor requires the DOJ to investigate whether compliance raised concerns in the area where the misconduct occurred. Further, it asks the Agency to probe the level of involvement in compliance training and decision making at all levels of the organization. These bullet points are extremely effective in developing an audit schedule for your compliance program to improve its effectiveness.

An Analytical Approach Can Drive Your Compliance Program

Gone are the days where an executive can take a look at an overview of the industry his or her company is involved in and determine the risk factors that need compliance attention. In 2017 we need to mine large piles of data to find those critical compliance “diamonds in the rough” that may need greater attention on the front end, before misconduct leading to an investigation occurs. Much like MLB executives are always looking for the hot new statistic or piece of data that may lead them to the World Series title, you should be using checklists like the DOJ’s evaluation to formulate a compliance strategy that is forward-thinking and ahead of the curve. Doing so will have you better prepared versus the competition.

 


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Syntrio is a leader in both the ethics and compliance field, as well as human resources and employment law, and is prepared to help your company implement a compliance program aimed at reducing the potential impact of compliance violations within the organization. Syntrio takes an innovative philosophy towards compliance program design and strives to engineer engaging, entertaining, and thought-provoking content. Contact www.syntrio.com for more information about our ethics and code of conduct online courses and remember to follow us on Facebook, TwitterGoogle Plus and LinkedIn for daily updates on employment law and compliance that impact your company!

 

Written by Jonathan GonzalezEsq., Senior Counsel for Syntrio

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