CCO Insights

Edward Hanover on Building FIFA’s First Compliance Program

As part of our CCO Conversation series, we spoke with Edward Hanover, FIFA’s outgoing Chief Compliance Officer. During our time together, we discussed the path Hanover took in his career leading up to his current posting at FIFA, the challenges of building FIFA’s first compliance program, his vision on how the role of CCO, and how the compliance space is evolving.

To give you a little more background on Hanover, after obtaining his JD from Georgetown Law, Hanover spent a number of years working for major law firms as a trial attorney, which included successfully defending a multinational pharmaceutical company against mass tort injury claims. Hanover then spent close to a decade at Novo Nordisk, where he moved took on responsibility for the legal and compliance functions at the company’s emerging markets division based in Zurich, Switzerland, before moving to Singapore to become Head of Compliance for Takeda Pharmaceutical. Hanover then went on to become FIFA’s Chief Compliance Officer. He was the first person to occupy that role following its creation after turmoil in the organization in 2015. Hanover has been in charge of building and leading FIFA’s Compliance Division since taking up the role in 2016. Hanover left the role of CCO at FIFA in late July as he moved to California to become a partner at DLA Piper in September 2019.

Since we had a lot to discuss with Hanover, the interview has been split into two posts. You can read the second part of the interview where we discuss the future of compliance with Hanover.

Building FIFA's First Compliance Program

Getting To Know Edward Hanover

Pauline Blondet (PB): How did you get your start in compliance?

Edward Hanover (EH): I started my career in the United States, where I was working as a trial lawyer for large law firms defending pharmaceutical clients in court for mass torts. Then I had the opportunity to join Novo Nordisk as head of litigation when they were building the department in the United States. Naturally, when you’re working on litigation and government investigations, an offshoot of that is that you help advise the organization on how to minimize the risk of investigation.

Novo Nordisk promoted me to Emerging Markets General Counsel in 2011 — that is when you could say I formally took on the compliance role. Whereas before I was providing advice in various areas including compliance when I entered my new role, that’s where I became responsible for the legal and compliance function in emerging markets and I started building out a program.

PB: Did you have to build the emerging markets compliance program at Novo Nordisk from the ground up?

EH: At the time I entered that role, there was a very small, loosely organized team, and compliance was more of a “bolt-on” function. As an organization develops and matures, there’s usually a realization at some point that the role of compliance needs to be formalized, because otherwise, you end up asking someone to wear multiple hats, which gets quite challenging. When you’re providing legal advice on a situation, and then have to switch your hat to compliance or provide ethical advice, it gets challenging, especially if it’s in a country where you have one person who’s responsible for legal and compliance, which is typically what you see in emerging markets.

I had a realization during my time in emerging markets at Novo Nordisk that nine out of ten questions I was asked by the regional president were all compliance-related—they weren’t legal questions at all. That made me realize that compliance is an opportunity for access to the C-suite because they are very focused on the topic.

PB: Why do you believe the C-suite was so receptive to compliance matters?

EH: Most regional presidents are not interested in talking about legal issues. These issues are never “fun”—they either involve contracting, which they find boring, or they involve litigation, which they find annoying. On the other hand, they are way more receptive to conversations about compliance because it deals with corporate culture, employee engagement, employee training, and employee wrongdoing.

All of that makes those in the C-suite realize that they can use compliance to send a positive message to their staff and present themselves as an attractive place to work. You will find the millennial generation is very interested in a corporation that has a mission that they can identify with. If they find the culture of the organization they’re going to work for fits with what they want to do—there’s actually data on this—the millennial generation will take a lower salary to work for an organization that aligns with their values.

PB: Compliance has unfortunately often been viewed as the “no department” rather than the positive force that you are describing here. Have you ever had to deal with that attitude?

EH: Of course. Sometimes you are viewed as a bureaucrat, just like Legal, HR, and Finance—they are all departments that say no. Part of the challenge that compliance has had, is that, when it’s a bolt-on function, corporations weren’t necessarily grooming corporate top talent to take these types of roles. Whereas now, you see top talent in corporations starting to move into the compliance field, because they realize the CCO needs to really influence key personalities — key division chiefs within the organization: the heads of Marketing, Sales, R&D, Finance, and of course the president. These are all people who are very sophisticated, talented individuals, who are typically open to logic and reason — so you need a charismatic, compelling leader in compliance who can explain why doing the program makes sense. A good CCO is able to positively influence their peers to overcome a negative attitude.

PB: Speaking of your experience, how has your experience as a trial attorney and having overseen compliance in emerging markets helped you in your current role?

EH: As a trial attorney, you have to be very intellectually flexible, because you have to deal with many different subject matters and then have the ability to respond and influence.

Working in emerging markets has made me much more understanding and reflective of different cultures and how you can be impactful in these different environments. To give an example: Asian cultures are generally more hierarchical and respectful of management. Employees also want to save face and tend to shy away from embarrassing their boss or managers, so they may be inclined to just agree and say yes, even when they personally disagree. You need to have this cultural understanding when you try to figure out how to create an environment where employees feel comfortable to speak up. Having worked in emerging markets has made it very clear that you cannot take a one-size-fits-all approach to a global compliance program.

Challenges Building FIFA’s First Compliance Program

PB: How did you end up in your role as FIFA’s CCO?

EH: At the time I was recruited in 2016, FIFA had just experienced a big scandal, as most of the world will be aware of. FIFA went through a bit of an existential crisis and as a result, they implemented a reform package, part of which was a mandate that FIFA build a compliance program with a CCO reporting directly to the secretary-general. I was asked if I was interested in applying. Four or five months later I was offered the job and began building FIFA’s first compliance program.

PB: How have you gone about the challenge of building a compliance culture in a place that previously lacked such a culture?

EH: FIFA, I could say, was the first job I had where it was really needed to build something, maybe not from ground zero, but to kind of pull the pieces together and really start to build something. Many people don’t realize this, but FIFA is not a huge organization, we only have 800 employees.

When I showed up, the challenge was that the morale in the organization was quite low because of the external perception of FIFA. Employees were not proud to go around and tell people they worked at FIFA. So I called a town hall and invited all the employees, to show them compliance is not what you think it is. When I started, I sensed their view was: “He’s an American lawyer. Oh no. He’s here to just investigate everybody.” Instead, I told them “we’re to help you, we’re here to support. I’m not here to investigate and fire people. I’m here to support and advise.” For me, that was a watershed moment, because you could kind of feel the change in the employees in terms of how they were viewing compliance. I also wanted to personalize everything I did, so I made sure I was speaking directly to the divisions—not just my staff.

I went about building a compliance program by taking a lot of the concepts I had used in compliance before, but I also went out and hired people from a variety of places, including the Big Four consultancies, law firms, and the financial sector, as I was looking to merge and mix a global compliance program that was going to be the new standard on how global sports organizations should operate.

PB: Which was the biggest challenge: building up the culture or putting in place appropriate internal controls?

EH: It is really driving the culture. Compliance is evolving from paper-rules based to principles-based. Ultimately the best run organizations are going to have a culture with almost no policies because you’re going to instill a culture upon the organization of “doing the right thing.”

If you can get to that point, you’ve hit the nirvana of how an organization should run. So for me, I always focused on culture first, and then policies come second. Because once you explain to employees what’s expected of them, all you do when you put a policy in place is memorialize the expectation that they’re already aware of.

My approach was: we talked to the staff, we start the training, then we implement the policies based on our discussions with them, so they feel that they had a part in the process. All of our policies at FIFA—our compliance policies—are four to five pages long maximum.

You have to realize that the goal is to educate the employees on what’s expected of them, and then where to go with questions. It’s not to make them an expert. I remember in my early days in pharma when we were drafting policies, it was written by lawyers and for lawyers. These policies were each 15 to 20 pages long, and you gave each employee 10 of them, they have 200 pages of compliance policies to read. I mean, come on, nobody read those. Or if they read them, nobody remembered them.

PB: FIFA has many member associations. How do you go about promoting a comprehensive ethics and compliance framework in associations operating in different environments?

EH: One of the first things I did was I implemented a compliance summit in Zurich. Every October we would bring a member from each member association to Zurich for a two day meeting that would highlight what a compliance program is, what the key components are, showing them the materials and tools that we at FIFA have developed, and then we would disseminate those materials to them in the four FIFA languages. The focus was heavily on enabling the member associations.

A lot of the promotion of our compliance efforts was done through the different regional confederations. I would meet with the CCOs of the confederations and discuss topics such as: “What is a risk assessment? What are the conflicts of interest policies we should manage? What are some of the ethical issues we see?” Going over these topics really started to drive alignment, because if FIFA was creating a best practice, and then the confederations would create a best practice, then that trickles down into the member associations. They see: “Oh, FIFA’s doing it, UEFA’s doing it. Okay, so in England we will do it.”

I wanted to create this carrot approach. If you actually want to do something then you’re much more willing and you do a much better job, versus, “Oh, I’m just being forced,” and then you do the bare minimum just to show that on paper you’ve got something. That’s not what I wanted. I wanted people to decide for themselves that this is something that can be a value driver for them, and they were going to implement it, and it was going to be based on them seeing what we were doing at FIFA.

PB: What would you say is the key for a CCO being successful when dealing with vastly different national environments?

EH: Always go to where your stakeholders are. Don’t make your stakeholders come to you. When I was meeting the Chief Compliance Officers for the confederations, I was going to where they are. For example, I would go to New Zealand, because when your stakeholders see you, and you develop that personal relationship, it’s much easier to continue the conversation remotely once you’ve built that relationship and had a chance to explain why compliance is important.

My counterparts at CONCACAF and in CONMEBOL (South America football confederation) are now doing the same thing—they are doing a fantastic job meeting with associations all over their territories and really driving the program.

It is once you have built the relationship that you can start to dive into the real discussions—“What are the real issues you see? Where can I help you?”. Once you build that trust and that relationship, then you can start to move forward. I think this is where compliance probably has done a poor job historically. The old style of the compliance officer was sitting in their office generating policies and sending email training around saying: “Please tick this box and then we know you took the training,” or, “Sign this form and email it back to me.” We were never developing a personal relationship.

Stay Tuned For More CCO Conversations

We want to thank Edward Hanover for taking the time out of his schedule to talk to us about his experiences in the field of compliance and how he built FIFA’s first compliance program. We hope you have found his insights to be valuable. To stay up-to-date on the latest CCO content, including the second part of this interview which we will release soon, make sure you are following us on LinkedIn and Twitter.

If you enjoyed this conversation you might also be interested in our interview with Kim Yapchai, CCEO at Tenneco, a Fortune 200 automotive manufacturer. She is a powerhouse in the industry who shared her thoughts on changing corporate culture and more.

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