He is a man no CEO wishes to call in for help. But if your company is mired in a bribery scandal, Andreas Pohlmann is your guy.
Mr. Pohlmann is SNC-Lavalin Group Inc.’s new chief compliance officer, a position created in February to ensure that the engineering firm doesn’t break the law when it seeks out contracts in Canada and abroad.
Just how successful Mr. Pohlmann is in establishing a new business ethos at SNC will be decisive for the company’s future. His work will influence how authorities establish any potential settlements and how investors assess the company’s determination to put its questionable dealings behind it.
“We want to draw a line in the sand between the past and the future,” Mr. Pohlmann says in an interview at SNC’s headquarters in Montreal.
For Mr. Pohlmann, there are no shades of grey when it comes to bribery. Even in the most corrupt countries, things are black and white. “A corporation cannot afford to build a sustainable business on corruption,” he says as he professes his unwavering belief that the “system bites back” at any company that goes for a quick-and-dirty win.
Mr. Pohlmann is working hard to implement SNC’s new compliance program by early 2014 at the latest. He is setting up new procedures to vet all of the company’s business partners through audits and a thorough review of contracts. “It is not enough to control what is happening at the borderlines of the corporation: You need to know with whom you are working,” he says.
Mr. Pohlmann is also hiring compliance officers for each of SNC’s business units and for each region in which the company operates.
The exact number of hires will be determined by a yet-to-be-completed “risk-assessment analysis.”
“To do a compliance program is to provide a compass to the 34,000 employees of SNC-Lavalin,” he says.
Hiring compliance officers is easy. Selling SNC’s new code of conduct to employees is another matter. “This is not so much about having a written policy in a booklet. I need to get to the hearts and minds of the people,” Mr. Pohlmann says.
That can’t be done by e-mail or over the phone. The Globe and Mail caught up with Mr. Pohlmann as he was returning from Paris and London and on his way to the Middle East for yet another series of town hall meetings. The Philippines and North Africa were next in what is turning out to be an international crash course on SNC’s business.
Mr. Pohlmann had never even heard of SNC’s problems when president Robert Card called him in Frankfurt to convince him to take on a new challenge and move to Montreal. But an Internet search quickly revealed the extent of the recent damage to SNC’s business and reputation.
The World Bank has just barred SNC from bidding on the projects it finances after allegations the company had conspired to bribe Bangladeshi officials. Police investigators are also probing SNC’s activities in Libya, Algeria, Tunisia and Canada, where former president Pierre Duhaime is one of the men charged with fraud in relation to McGill University Health Center’s new super-hospital.
While all of this was news to Mr. Pohlmann, the 55-year-old lawyer wasn’t all that surprised by Mr. Card’s call. At Siemens, where he was recruited as chief compliance officer, or CCO, in 2007 after having worked for Celanese Corp. and Hoechst AG, this trouble-shooter was known as Mr. Clean.
If compliance officers are not new to financial services or health care firms, they are still a novelty outside of regulated industries. But a number of multinationals have put a high-level executive in charge of compliance after being rocked by corruption or accounting scandals. And Siemens’ bribery affairs were a magnitude-7 scandal.
The German conglomerate faced an unprecedented crisis in 2006 when prosecutors uncovered that millions had been paid in bribes to land contracts in Argentina, Italy, Nigeria and elsewhere. Siemens’ CEO and its chairman were forced out in 2007. The scandal ended up costing over €2-billion ($2.6-billion) in fines, taxes and advisory costs.
At SNC since March 1, Mr. Pohlmann refuses to draw comparisons between his new employer and Siemens, a company that employs 370,000 people. But he remarks that “how people behave or misbehave is in most cases dependent on the leadership culture of an organization.”
It is SNC’s culture that Mr. Pohlmann is out to reshape, as he defines the CCO as the “chief change officer.” The German executive is well aware that he will encounter resistance from employees who will feel uncomfortable with what is now expected of them. “If someone is asked to make a questionable payment, that person has to resist and to expose this. … It implies the employees have to show courage.” He believes SNC employees, who suffer deeply from all the controversies exposed in the media, will acknowledge that this is the only way forward.
Mr. Pohlmann is convinced that a multinational can conduct itself cleanly in every region in the world, even if he often hears arguments to the contrary. “We can make no exceptions for any region whatsoever. The day we will make an exception in a region considered difficult just to land a contract, I will be out of a job.”