Inspired to make a difference
Suzanne Rich Folsom is known for fixing complicated governance messes, such as at AIG, where the regulatory and compliance system she implemented in 2010 helped stabilize the weakened firm. But when she was invited to take on a similar mission at the US security provider formerly called Blackwater, her initial response was: ‘No, thank you.’
ACADEMI, as the company was renamed when it was bought from the original owner, became infamous for the tragic deaths of at least 14 Iraqi civilians during a shoot-out at a Baghdad traffic circle in 2007, which in time attracted regulatory scrutiny for some serious export compliance mistakes and bribery allegations.
Once Folsom was made aware of the critical role the company plays in US national security, however, she was inspired to take on the challenge as the new general counsel and chief compliance officer.
The new owners wanted the company to be run as if it were publicly traded. Contrary to what most people believed, it had a compliance structure in place but was sorely in need of a training program to communicate those policies to its workforce. When Folsom and her team walked in the door, there were monitors from the State Department and the Justice Department in place, significant fines had been paid, and a Foreign Corrupt Practices Act investigation was under way. The latter ultimately found no evidence of bribes and resulted in a declamation letter.
‘People ask, Why would you go there?’ says Folsom. ‘I truly believe that if you have the right tone at the top, the right resources and the right people involved you can turn a company around and make a difference.’
In less than two years, Folsom and her team established what she sees as a best practices program that is superior to many at Fortune 500 companies, and to which regulators have given their highest rating. The Bureau of Alcohol, Tobacco and Firearms considers ACADEMI ‘the poster child for federal firearms licensees for what we put in place’, including the bar-coding of all the company’s weapons and an insistence on going beyond what the law requires, says Folsom.
One hallmark of the compliance program is the attention it gives to in-person training and monitoring of employees, 95 percent of whom serve in hostile, high-risk areas without regular access to a computer. Folsom believes in spending time with employees in their operational duties, such as anti-terrorism driving classes. The effort to understand their work makes employees more willing to buy into the company’s compliance, governance and legal policies, she says.
For photos of the 2013 awards, click here.
Award sponsor: American Stock Transfer