In the time it takes to read this interview, a FedEx delivery vehicle will probably drive past your home or office at least once. Such is the omnipresence of one of the world’s foremost transportation, e-commerce, and business services. For Chief Compliance Officer Justin Ross, overseeing a compliance and ethics program that brings it all together takes vision, confidence, culture, and innovation.
Why did FedEx apply this year?
FedEx has been around since 1973. But compared to the rest of the company, our Compliance team is still relatively young. Before 2015, our compliance function was very decentralized and resided in our various operating companies. From a legacy perspective, these companies operated independently, and each of them did their own thing on compliance. The operating companies did a good job on compliance and had their own initiatives and strategies, but there was no corporate oversight of compliance, which resulted in a lack of consistency, not a lot of transparency among the compliance teams, and some duplication of resources.
In 2015, we created a compliance team at the corporate level to oversee compliance for the enterprise and began centralizing a lot of our compliance programs. Since that time, the compliance teams have worked really hard to create a truly enterprise compliance program that is consistent across the board and contains many leading practices. We’ve also done some really neat things around risk assessments, automation, and data analytics that got us thinking we were at the maturity level where we could be considered for this honor. Two, three, five years ago, I wasn’t sure we were ready for this. But our program has evolved to the point to where I thought we would be very competitive.
A lot of large organizations have operations that recognize the local realities of their field offices, but at some point, there needs to be a single source of truth. That’s a lot easier said than done.
No doubt. A lot of times field offices or independent business units want to do their own thing or don’t want the corporate office to tell them what to do on compliance. But they’re not going to do something just because you tell them to. The key is to show that there is value to the organization and to any independent business units of a consistent, enterprise compliance program with consistent processes, controls, training, and tools. By sharing best practices, emerging risks, and compliance resources and tools, the entire organization can be more efficient and ultimately more compliant. We’ve gone through this journey at FedEx and the compliance teams have succeeded in main part because we have shown value to the business.
What was the World’s Most Ethical Companies applications process like for you?
It is an arduous process. To anyone that wants to go into this, be prepared. It’s not a weekend. You’re looking at every aspect of your program to see how it shapes up against best practices, which Ethisphere really has a good handle on. To me, going through this process is the best self-evaluation of your program that you can do because you are looking at all the best practices, and that really helps you evaluate where are your gaps, where are you good, and where you need to do more.
What I like about it is that it’s not static. Each year, Ethisphere adds something to it. Look, best practices aren’t static. Regulators expect different things. You know fraudsters are doing new and different things to companies. So this gives us an opportunity to look at an evolving data set of best practices and react accordingly by updating our program.
FedEx is extraordinarily present in our lives—there are FedEx trucks passing outside of my window right now, in fact. How does the highly visible nature of your work impact how you view and operationalize ethics and integrity?
Because we’re such an integral part of everyone’s supply chain, it’s extremely important, I think, for us to set an example on ethics and integrity. First of all, our customers expect it. Our big, global customers come to us all the time and ask us to tell them about our ethics and compliance program. They want to know about the stability of our supply chain and our due diligence practices. And we have to show our big customers our ethics and compliance program, because it’s important to them. We’re part of their supply chain. That’s why it’s important we act as an example, such as being honored by World’s Most Ethical Companies.
We’re also setting an example for the people downstream in our own supply chain, as well for our vendors and business partners, on how important this is to us. We have over 550,000 team members and operate in over 220 countries around the globe, so our potential span of influence is huge. It’s why ethics and compliance is so important to us and why we stress the importance of ethics and compliance to our business partners. By doing this, we can hopefully make a positive impact on the communities where we operate as well.
How would you say that your ethics compliance program aligns with or further empowers your organization’s strategic vision, especially from a supply chain standpoint?
I think its really about trust here. Our overarching company strategy is Deliver Today and Innovate for Tomorrow. Deliver Today focuses on the immediate work at hand, which is to provide superior service to our customers. A big part of that customer relationship is centered around trust. Our ethics and compliance program and the FedEx culture help us to build and maintain that level of trust with our customers. And that is absolutely critical to our business’s success.
The second part of our strategy is Innovate for Tomorrow. And our compliance team has really leaned into this strategy through our work around automation and analytics. With automation we are moving our processes away from manual processes and into automation. This will help us be more efficient and allow us to better allocate our people resources on higher risk issues. Our company leadership has also challenged all of us at FedEx to Innovate Digitally by finding ways to use data to be more efficient and better serve our customers, and the compliance teams are trying to further this organizational strategy through our work in automation and analytics. We are continuing to find ways to use data analytics to improve our compliance program, specifically around prevention and detection of wrongful conduct and identifying and managing compliance risk. We’ve made some great strides here with our hotline data and accounts payable transactions.
What projects in the last year have really helped you move the needle at FedEx?
One project that I think we’ve really improved and helped embed compliance within the business is our compliance risk assessment. When we first began doing our compliance risk assessments, they were very ad hoc, very manual, very surface level. We’ve really changed that to where we’re doing compliance risk assessments in each business unit for the risks that we own, such as anti-corruption, antitrust, fraud, export controls, data privacy, gifts and entertainment, things like that. We do that on a rolling basis, working closely with the compliance teams in that business unit. We do extensive business partner interviews with those business units where we’re trying to identify the risks that they’re seeing. Through these interviews, we’ve really helped improve the visibility of compliance and ethics in those business units and embed compliance within them. We’ve helped stress the importance of compliance and ethics to those business unit leaders.
Those risk assessments have helped us embed compliance within the business because we’re there learning about risks within that part of the business, but we’re also teaching them about compliance and ethics, and how to manage those risks. So that’s something that the team’s been really proud of. We touched every piece of the business over the last two years doing that.
And we have gotten such great feedback from the business on these risk assessments, too. Every time, the business comes back to us and says, “Thanks for coming in here. We’ve got a better view on ethics and plans. We know where to go now, where we didn’t necessarily before.”
“Every time, the business comes back to us and says, ‘Thanks for coming in here. We’ve got a better view on ethics and plans. We know where to go now, where we didn’t necessarily before.’”
What is FedEx’s culture of ethics like? And how has your team’s work helped to advance that culture across the organization?
My job is way easier because of FedEx’s great ethical culture that was at FedEx long before I got here. I’ve worked all over the world for FedEx. Everywhere I go, there is a sense of doing the right thing. And that makes the compliance teams’ jobs so much easier.
And it starts at the top, with our senior leadership. In every communication that goes out from senior leadership, safety and integrity are always stressed. And senior leadership is always willing and able to support the compliance teams on our compliance initiatives, whether it is making a video for compliance week, communicating the importance of a compliance initiative, or providing input about our various compliance programs.
I’ll give you one example that really highlights the FedEx culture, specifically from our senior leadership. We have an annual compliance champion selection process where employees are asked to nominate a compliance champion. After the nominations come up, we have a steering committee that will select the champions. The first year we did this, I reported the winners and why they were chosen at the quarterly Audit Committee meeting. After the meeting, Our Audit Committee Chair asked me for the names and emails of those compliance champions. He sent them a personalized note, and you can’t over-emphasize how much that means to those compliance champions. That really makes an impact. To me, that’s tone at the top. And it’s walking the walk.
But even with our great existing culture at FedEx, we have to continue to work on it to make sure we maintain that great culture. And the compliance teams play a big role in that, mainly around making sure employees understand the importance of an ethical culture, the importance of speaking up, and making sure that wrongful conduct is appropriately and consistently addressed across the company. We do this through a variety of measures, including embedding culture ambassadors in our various business functions, publishing compliance newsletters, publicizing lessons learned taken from real scenarios within FedEx, educating employees about the consequences of cultures gone bad, and recognizing compliance champions. We also periodically gauge our culture and the effectiveness of our compliance programs through culture surveys and follow up with real action plans from those surveys.
“When we get the World’s Most Ethical Companies honor, our customers see that. And that makes them comfortable to do business with FedEx employees.”
It’s great to see how your leadership gets directly involved, whether it’s when you reach out for support, or when they participate in communicating your team’s objectives. Not all leaders do that, and there is real power when the tops of the organization take time out of their day to get on camera and lend their voice to your program.
When we see that, it motivates us. So. If you’re a compliance team and you’re not getting any support from senior leaders, it is absolutely demoralizing. But when you see senior leaders really showing an interest in compliance, and answering the call whenever you ask, it really motivates and empowers our team, as well as the entire company. That’s why Tone at the Top is so important to an ethical culture and effective compliance program.
Why is earning the World’s Most Ethical Companies honor important to your organization?
Our compliance teams work very hard. And to see us recognized for something like this is absolutely key to making the teams feel appreciated, motivated, and like they’re making an impact. It’s been great for my team and to our other compliance teams within the business units.
The other thing is, it is really good for business. I’m telling you, our customers ask us about our compliance program all the time. They want us to tell them about our due diligence. How we manage risk. And these aren’t one-off, easy conversations. These are in-depth presentations with our big customers around what we’re doing on ethics and compliance. When we get the World’s Most Ethical Companies honor, our customers see that. And that makes them comfortable to do business with FedEx.
Employees want to work with ethical companies. Investors want to invest in ethical companies. Customers want to do business with ethical companies. And communities want to have ethical companies in their community. So this honor is good for all of those stakeholders. When World’s Most Ethical Companies was announced this year, that morning, I got so many calls of congratulations.
This award is not a singular award. It’s not about one person. And it’s really not even about the Compliance team. It’s about the organization. There is no way FedEx could have achieved this honor without the support of all of our team members across the organization, from the top to bottom. It’s something that we all should be proud of, not just the compliance teams. Every single person that works at FedEx that had a say and had input is a reason why we got this. I think that’s important to say because this interview may be with me, the Chief Compliance Officer, but our front-line employees, drivers, operational workers, back office employees, they all have as much to do with this as I do, or my team does.
ABOUT THE EXPERT
Justin Ross is Chief Compliance Officer for FedEx Corporation, responsible for developing and overseeing enterprise-wide compliance programs for FedEx operating companies and international regions.