Crazy Compliance Officer News

Sometimes there is simply too much news happening in the compliance world, and today is one of those times. So rather than take a deep dive into a specific subject, we’re going to run through several newsworthy items that have streaked across the radar screen in the last few days.

First we should start with Facebook. The social media giant’s chief operating officer, Sheryl Sandberg, announced on June 1 that she was leaving the company after 14 yearsto write the next chapter of my life.” Nobody knew quite what that meant, although Sandberg said she wanted to devote more time to her philanthropic work and her upcoming marriage. 

Last week, however, the Wall Street Journal reported that Facebook had been investigating Sandberg since last fall for her use of corporate resources to plan her wedding and assist with other personal needs. Why is that news to us in the compliance world? Because the investigation began after Facebook hired a chief compliance officer and put more stringent compliance policies into place!

Henry Moniz joined Facebook as its first-ever chief compliance officer in February 2021, some eight months after the company first began searching for a CCO. Way back then I quipped that the role seemed like a thankless job. If Moniz’ new compliance program contributed to the departure of a long-time COO bending the rules for her personal projects, then I’ll happily admit I was wrong.

Let 2022’s compliance issues begin.

The legal issue for Facebook and Sandberg is whether she used any significant amount of corporate resources for personal benefit and that wasn’t reported as compensation on the proxy statement. According to Facebook’s 2021 proxy, Sandberg received compensation with a total value of $35.25 million. That included nearly $11.3 million in “other compensation,” which Facebook further described as $9 million in personal security services and $2.3 million for personal use of corporate aircraft. 

So did Sandberg use Facebook staff and resources to any significant extent to promote her book Option B, or to help with wedding planning, or to do other personal chores? That’s unclear to us on the outside, but if so, that could lead to an SEC enforcement action for poor disclosure controls over executive compensation. Stay tuned. 

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Next we have the tale of a compliance professional who claims she was done wrong by Penn State University, her former employer.

Denise Shivery, who worked in communications and training for Penn State’s ethics and compliance office from 2014 to 2020, filed a wrongful termination suit against the university on June 2. Shivery claims that she observed Penn State’s former chief compliance officer, Kenya Mann Faulker, “treating male employees in a more hostile, demeaning, and dismissive manner than she treated female employees.” 

According to Shivery’s lawsuit, she enjoyed a reasonably good relationship with Faulkner in the late 2010s and was even in line for a promotion, with Faulkner’s support. In February 2019, however, Shivery reported her discrimination concerns to Faulkner’s superiors at the university. That led to an internal investigation — and soon thereafter, Shivery claims, “Faulkner treated [Shivery] differently and worse, and in a more hostile and dismissive manner, than she treated [Shivery] before she complained of sex discrimination.”

Instead of getting the expected promotion, Shivery claims, she was demoted, and then passed over several more times as she applied for other jobs in Penn State’s ethics and compliance office. Shivery also says that other employees who raised concerns about sex discrimination or retaliation related to Faulkner received similar treatment.

Penn State finally fired Shivery in June 2020, ostensibly because it was reassigning Title IX training to another office — except, Shivery says, Title IX training was never a significant part of her duties.

Anyway, it’s pending personnel litigation, which means Penn State hasn’t said anything about the lawsuit. Faulkner arrived at Penn State as chief ethics and compliance officer in 2018, and subsequently left in 2021 to be chief compliance officer at Emory University.

Again, stay tuned.

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And for the audit executives, we have a bizarre story out of Baltimore — where the Baltimore County School Board fired the district’s chief audit executive by not voting to renew her contract. 

The audit executive in question is Andrea Barr, who had worked for the school district for 36 years and been chief audit executive since the 2010s. In that time Barr had faulted the board for poor management at least twice: once in 2019, when she complained about a hostile work environment; and again in 2020, when she released an audit finding that the board had misspent taxpayer money and overspent its budget.

Last month, the school board ended up firing Barr because only six of the board’s 12 members voted to renew her contract, and she needed seven to stay on the job. The remaining board members either abstained or recused themselves from voting.

Even worse: most of the school board members are ending their final terms in office, after years of criticism from outsider observers. As noted in an NPR story about the school board, one consultant hired to review the board’s work described it as “dysfunctional” and told members they needed to do better to serve the district’s 110,000 students. 

So rather than do that, board members shoved Barr out the door just before they went through it themselves. Barr’s last day on the job is June 30. She now joins the other tales of retaliation against compliance and audit professionals that Radical Compliance has chronicled before. 

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