Listen to Victoria and Tom’s Conversation Here:
Learn more about the transformative power of compliance and data in today’s business landscape with guest Tom Fox, President of the Compliance Podcast Network. Host Victoria Meyer delves into the evolution of compliance functions, highlighting how they have shifted from being a gold standard to a crucial component of everyday business operations. Tom shares his insights on the importance of data quality and security, especially in the context of AI and its growing role in compliance and legal frameworks. The episode also explores the challenges companies face with AI-generated information and the critical need for verification to avoid costly inaccuracies.
Victoria and Tom also discuss the pivotal role of podcasting in business, emphasizing its benefits in thought leadership, relationship building, and content creation. Tom shares his journey from a trial lawyer defending petrochemical companies to an influential voice in the compliance industry through podcasting. He draws parallels to the safety culture revolution in the 1990s and underscores the ongoing need for strong leadership in fostering an ethical compliance culture.
Join us to learn more about the following topics this week:
- Tom Fox’s career journey and what led him to podcasting
- The evolution of compliance: from legal to business to data and analytics
- Trends in compliance today within the chemical and energy industries
- How do companies ensure clarity in compliance?
- The impact and risks of data analytics and AI on compliance
- The role leaders play in fostering a culture of compliance
- Five reasons to have a podcast as a business
Killer Quote: “Compliance isn’t just about ticking a box anymore; it’s about integrating with the business, using data to predict and prevent issues before they arise, and ensuring ethical conduct is woven into the fabric of your organization. In a world where AI tools can provide both incredible insights and glaring inaccuracies, it’s our responsibility to verify, validate, and lead with integrity.” — Tom Fox
Thank you to our sponsor Veson Nautical:
From multi-jurisdictional regulations to geopolitics and decarbonization, the maritime ecosystem is more complex than ever. This is creating unprecedented levels of risk exposure. With trusted maritime data and built-for-purpose workflows from Veson Nautical, you can confidently make decisions to better manage risk and maximize profit.
For over twenty years, Veson has been co-innovating with the world’s largest buyers and sellers of bulk marine freight.
Join their client community and find your decision advantage. Learn more at veson.com
Watch Tom and Victoria’s Discussion on Youtube Here:
Leadership’s Role in Compliance and Safety Culture with Tom Fox
Hi, this is Victoria Meyer. Welcome back to The Chemical Show, Where Chemicals Means Business. Today, I am speaking with Tom Fox, who is the president of the Compliance Podcast Network. So Tom is the Number One Voice of compliance and founder of the award winning Compliance Podcast Network. He’s a lawyer, and an international bestselling author with 33 books on compliance, business ethics, and leadership. So Tom and I are going to be talking today about the role of compliance and the power of podcasting. Tom, welcome to The Chemical Show.
Thank you. I’m really thrilled to be here with you.
Tom, what’s your origin story? How did you get started even being interested in pursuing a career in compliance?
So I was a recovering trial lawyer. I defended petrochemical companies along the Texas Gulf Coast largely. So I had a lot of experience with health and safety in the 80s and 90s. In the first decade of this century, I went in-house and I did contracts at Halliburton. I leveraged that position as a general counsel’s position at another oilfield service company who in 2007 had the largest bribery and corruption fine in the history of the world.
Wow.
There’s a US law called the Foreign Corrupt Practices Act, which prevents US companies from engaging in bribery and corruption outside the United States. I was part of the new management team brought in to clean it up and put in a new compliance program. So that was really my first experience with compliance. I did that for a couple of years, the company got sold, my job went away. I decided, what I really wanted to do with my life was race bicycles.
So I went off on this great adventure to race bicycles and I was over 50. I could ride in the senior division. I had great fun, got in great condition until, one training ride, I got taken out by a Hummer.
Ooh.
That ended my cycling career. Fortunately, I wasn’t banged up too badly. I was really bruised internally and just took forever to heal.
So I was on a walker and then crutches and a cane. So after a couple of months of, convalescence in the hospital and at home, I realized I was going to have to go back to work. So I got on my walker and huddled into my office and decided what I really enjoyed was building a compliance program inside of a corporation.
And it really tied into my prior life as a trial lawyer in the following manner. What I saw in compliance was what I saw in safety in the 90s. That journey of safety being something everybody knew about, the number one priority of every company, everywhere, that became the same story for compliance.
This was 2010. The only time I left the house was going to physical therapy. So I couldn’t meet people. I couldn’t have a drink, couldn’t have lunch, couldn’t go to a conference, couldn’t go to a meeting. and so I started exploring social media, which at that point in my life, I knew nothing about.
And it was the early days of social media.
So Twitter, LinkedIn, Facebook, and in six months, I built a worldwide consulting practice literally out of my house and way before work from home. So I’ve been working from home since 2010, and that’s how it started.
Yeah. That’s very cool. And then how did you get into podcasting?
So as a lawyer, I’d always written a lot of articles. So blogging was natural extension as, and part of my social media marketing outreach. And then podcasting was a natural extension of blogging. Then in 2017, I got this bright idea. Let’s form a network of compliance podcasters.
So there’s three trade organizations in my world. And so I went to each one of them and said, “Hey, let’s form this consortium and we will be the one stop shop for all information in the compliance format. And we won’t take away from what you’re already doing.” And I could get no interest.
Yeah, I was going to say, would they buy in at that point?
So I just said, bleep it. I’ll do it myself. So I did.
And so in 2019, I decided I either had to fully commit or move it back to hobby status and start practicing law full time again. For me, that meant compliance. And so I quit practicing law, bought all the cool toys, I built a huge network, and at the end of the year, I’d made about $10,000.
And I thought, that was an interesting experiment. I have to go back to playing lawyer. So I did in 2020 till they shut the country down on March 15th. And, what happened was starting May 15th, I literally got a call from every product provider in the compliance space who all had the same question, which was how long to get access to your network, because even by then I had the largest social media presence in compliance and prior to COVID almost all marketing was done at trade shows, conferences, breakfast roundtables, or that sort of event. And of course that wasn’t available and all that money was just sitting there waiting to be spent. So they spent it on my little network. And because of the work I’d done in 2019, the answer to everyone’s question was the same 24 hours. Cause it literally was just a plug and play because of everything I’d done.
My little world blew up and I have since that time tried to consolidate the explosive growth I had in 2020. And like I went to 200,000 downloads a month in one month. So I’ve just tried to grow that network now and make it more professional and see if it can be an ongoing viable business.
I love it. And, I am nowhere near as close or as big as you are at this point in time, but absolutely I see the role that podcasting plays in building connections in enabling leaders and companies to tell their stories and reaching people in a much more personal way, in a more impactful way than a lot of the traditional trade media conferences, even though post COVID, a lot of those things have come back.
All right, so let’s talk a little bit about compliance. And it sounds like you’ve done some pretty impressive things through your career, but what’s critical about compliance today?
As I mentioned, I’m a recovering trial lawyer, and in the late 80s and early 90s, there were three massive chemical plant explosions. In Houston, Harris County and the Gulf Coast. For the Texas Gulf Coast, huge loss of life, millions of dollars in damage all leading up to the Exxon Valdez and Exxon really became the leader in safety because Exxon said, we will make sure this will never happen to us again. We are very embarrassed. And we are not gonna let this happen. And we’re going to make safety the number one priority of our company. And guess what? If you want to do business with us. You have to make safety the number one priority. So all of these companies that did business with Exxon, had to put safety as number one.
Now, most of those, many of those, I should say, had gone through these chemical plant explosions. Chevron, used to be Amico, but it’s now BP, and one other one. But, they had huge losses. And so they changed their safety culture. So what I saw from that was when leadership makes a decision to change something, they can.
When I went in the corporate world, I went with Halliburton, obviously an oilfield service company and Halliburton had that same ethos. Safety is number one in our company. Now it doesn’t matter to me whether it was altruistic. It doesn’t matter to me if it was a business decision. The result was safety was number one. Even lawyers opened every meeting with a safety moment and that really drives home safety. Now you’re still going to have incidents. You’re still going to have accidents because people are involved.
There was a huge shift in the 90s. That shift didn’t start with leadership just saying we’re going to change. They put in safety programs, they put in training programs, they gave employees the ability to raise their hand and speak up. They did a monitoring of safety data to make sure that on an ongoing basis safety was being still taken care of. So almost all of the things you have to do in compliance.
Things we had to do in the 90s and first five years of this decade around safety. And so I really looked to safety and frankly, compliance is still not as sophisticated as safety is in training.
Yeah.
I don’t know why we can’t get there, but we can, for me, I had that model in mind and I saw it play out in front of me in the first decade of this year, this decade, this century, compliance was written by lawyers and for lawyers. They were these massive codes of conduct and massive policies and procedures.
Really boring.
Not for a lawyer, but you couldn’t read them if you weren’t a lawyer. And so the person who’s trying to read it, trying to do the right thing. It was virtually non-decipherable. So that was the first evolution of compliance was to move away from strictly a legal basis. And then it moved to more business basis, meaning that it had to integrate into the company and not simply be no, Dr. No, from the land of no, you had to actually help the business.
Now the evolution is data and data analytics. And what can you move? There are three parts to every compliance program, prevent, detect, and remediate. We’ve gotten pretty good at detection, but we are still moving towards prevention. And that’s what data analytics promises, which is to prevent something from happening, whether it’s a safety incident or whether it’s a compliance violation before it happens.
So what are the trends that you see in compliance today? And in particular, when we think about chemicals and energy and this heavy duty infrastructure that we’re working with.
I typically focus on safety because in the chemical industry, compliance to me is largely around safety or HSE, health, safety, and environment. A huge part of ESG and something that every corporation involved in this industry, literally has to have as part of their corporate governance.
I still do contract work or small contractors along the Texas Gulf Coast in the petrochemical space. And so these are 30, 50, 150 million companies that are too small to have their own general counsel. And I see in these contracts an increased awareness of compliance because the plant owners are requiring contractors to sign on to very robust compliance programs. Part of it is around gifts, travel, and entertainment for plant employees. Part of it is around conflicts of interest. Part of it is around paying bribes to third parties. Part of it is around making sure everyone has their documents that is hired and works for a company. Part of it is around, of course, drugs and alcohol use.
That’s for safety reasons, obviously, but I see all of these requirements that the top chemical plants have for themselves being pushed down in these contractual provisions. Literally, a 50M dollar company that does 1 thing very well, they have to sign on to and have compliance programs in place for the Chevrons of the world, or you name the chemical plant.
Do you think they understand it? I think with some of the contracts that, even when I was at Shell and Clariant, there occasionally would be a provision thrown in and then somebody would be like, “Oh yeah, that’s great. we can sign that.” And yet then somebody else takes a look at it and would be like, “Oh, do you know what you just agreed to?”
So do you think there’s a clarity of understanding and how do companies ensure that they understand in order to be able to comply?
If they have me as a lawyer they do, because I know what to look for. I don’t focus really on the commercial terms. I know what the legal terms are. I know what they should say in the petrochemical industry. One, in contractual negotiations, we’re all moving towards the same goal. Doesn’t mean we don’t represent our client, but everybody wants a contract sign.
The plant owner wants a contract sign, and the contractor wants a contract sign. There are fairly established parameters around compliance, around risk management, and the legal terms. Now there’s some room for negotiation, certainly, and I guess the easiest would be are you going to cap your overall liability? If so, what’s that cap going to be? Is it going to be the amount of insurance required? Is it going to be something above that? Is it going to be 15 million? Is it going to be 20 million? That’s a big deal because you have unlimited liability, potentially you could lose your company.
Everybody understands what the parameters are. And, you can have a tough negotiation and still be fair. My job is, I don’t tell clients what to do. I say, here’s your risk. You have unlimited liability. If you want to swallow very hard and accept it that’s your call cause you’re the business owner.
One of the challenges I hear from companies sometimes, is different standards and understanding when they’re working globally because depending on who you’re dealing with, they don’t always understand that.
So a counterpart in India may not recognize that what they’re doing, which may be a standard business practice to them may actually be in conflict with a U.S. perspective, a European perspective, et cetera. So do you see that often?
It used to be more common, but now if you do business with a U.S. company and you’re in India or you name the country, you’re going to be generally aware that you’re going to have to do business ethically and in compliance. And if you don’t, it’s up to the company that hires you to give you that training.
But most businesses outside the U.S., they understand that it is a true business differentiator and a business plus for them to do business in compliance with U.S. law, to have had training, and to be able to demonstrate that they can meet the U.S. company’s requirements under U.S. law, just makes them more marketable as a subcontractor or a business partner.
Make sense. What about digital? So we’re living in the world of digital, the digital age, digital transformation, AI and data analytics, and you referenced data earlier. How are they impacting compliance practices, would be one thing. And then the second piece is, are there new things to be looking for and what do companies need to be aware of as they go more digital?
The evolution has been fascinating because it started with data and, in the last second decade of this century the DOJ started talking about data and data analytics. And then they got more serious around the time of the pandemic, and then they hired a guy who was a chief compliance officer at a company called AB InBev, which in the U.S. is Budweiser. And his company had gone through an enforcement action, and as a result of that, as part of his remediation, he put together the most sophisticated data analytics program for compliance in the U.S. and the DOJ hired him, and he brought that institutional knowledge to the Department of Justice.
So number one, the DOJ could tell you had a really adequate data analytics program, but equally importantly, they could tell when you didn’t. And so last week, we had a huge release of information from the DOJ on their expectations around compliance and data was once again, a very big part of it. But here was the twist. We’ve always known you had to have a data analytics program, but the DOJ focused on data access. Which is different. They said the compliance function has to have access across all data silos within your company. And that means all. If you don’t, you’re going to get negatively graded. If you say, I didn’t have the resources. Shame on you. You’re going to get negatively graded.
They have elevated the compliance function to having access to the data and then using the data. It used to be a gold standard, then it moved to best practices. Now it’s just table stakes. So that has been one evolution.
Literally, we saw that capstone last week. When it comes to AI, obviously we’re still in the infancy of that, but in the compliance realm, what the DOJ has said is it’s about your data quality. what’s going in to your AI or using chatGPT, which is everyone’s data, or do you have a dedicated AI or generative AI for your company with your company’s data.
How do you determine data quality and data security? The issue I have with chatGPT and I don’t know if issue is the right word, but I ask a compliance question, I get an answer. I know if it’s right or wrong because I know the answer. The problem is if you don’t know the answer and you ask a question, you don’t know if you’ve been given the right answer. And so the best example, is I think everyone’s heard of the lawyers who filed some briefs done by chatGPT and it turned out it cited cases which didn’t exist. And everyone went, ah, stupid lawyers. And yes, they were. But the greater point is, you have to double check the information you’re given and it was that lawyer’s responsibility to go site check those cases to see if, one, they existed and, two, they said what chatGPT said they did for precedent purposes.
I have asked chatGPT some pretty detailed questions about risk and risk management and I’ve got some pretty good answers back, but I’m confident I know the answers. If you’re a newbie and you put it in, you don’t know the answer. So that’s the biggest problem right now.
Yeah. It’s a risk. Even Google is offering up a lot of AI based answers right now. I’ve seen this myself personally, I forget what I was looking up and I’m like, that cannot be right. Like I was looking for resources. I think I was helping one of my kids with a problem, a school related thing. And I was like, I don’t think I believe this. And it’s presenting information that may or may not be factual.
In fact, one example as well that came up recently, a business colleague was telling me that she had gone on it searched on The Chemical Summit, which is the conference that I host that I started last year. This is year 2 and it came up with AI answer. It attributed the conference to a completely different company as the founder of the company. I don’t know what’s working behind the scenes, to your point, if you don’t have at least a glimmer of what the right answer is, you could be really led astray.
This happened to me. I was researching a bank fraud case from the 90s. And there were two defendants, two men, one of the men was married to Linda Carter, who was the original Wonder Woman, and I vividly remembered that, for all the boy reasons. So I was Googling, and I asked chatGPT to tell me about the two defendants, and they said the defendant who was married to Linda Carter, and I said, who is the son in law of the other defendant?
I knew that wasn’t right. So I said, who is he married to? And it gave me the daughter of the co defendant. And I knew that wasn’t right, because it wasn’t listed as Linda Carter. So the third query I said, please describe the relationship between Linda Carter and this other woman, whoever it was. And it came back, we are sorry, we made a mistake. Robert Altman was married to Linda Carter, not so and so. Number one, chat GPT apologized and two, it recognized it made a mistake. But if I hadn’t known that, and it was absolutely positive about that, when I typed it in, I would have put the wrong information in whatever resource I was creating
So this, I think is one of those things that keeps people a little bit fearful. If I come back to compliance, you reference the DOJ, and I think people’s greatest fear around compliance, around anti bribery, around all kinds of things, because you did not want to get called into a DOJ query investigation. So my guess is people are a bit concerned rightfully so that one of the risks around AI, the risks around some of our digital solutions is there’s a lot of imperfect information out there. Sorting through that imperfect information, is pretty challenging.
Right now, I have found it very useful in terms of new ideas. Or give me different ways to think about things or put a transcript in and get a 1st draft of something. It can be useful if you have a general understanding of the subject matter. and I’m sure it’s only going to get better, but right now, what the DOJ said for compliance is you have to have clear visibility into the data.
The data has to be secure. And you have to know where the answer is coming from. And as a lawyer, if, there’s another example, I think it was Air Canada. They had a bot that customers could use on customer service questions. And the bot told some customer, do something this way and you’ll get a refund. And it turned out it wasn’t true. So he sued Air Canada and Air Canada said, it wasn’t us, it was the bot. No, one thing I learned a long time ago, if it went out under your name, you’re responsible. Now you may have an indemnity right from somebody, if you’re in a chemical plant and there’s an accident, they’re going to come to you.
So the same basic legal principles apply around AI. Once it goes out under your name, it’s yours.
So what role do leaders play in this? We’ve touched on a variety of things related to compliance and ethics, that ties into this in some ways. Whether it be HSE, data analytics, the use of AI, what role do company leaders play in fostering that culture of compliance and really instilling it?
Leaders are absolutely necessary. It is absolutely necessary that they lead not simply in thought or in word. They have to talk the talk and walk the walk. It does not work if your leaders do not. I’m doing business ethically and compliance and demanding their company do business ethically and in compliance. So it’s just like safety back in the 90s. And when Exxon said, we’re going to change and they did that, came straight from the top and that principle still holds true today.
All right, Tom. So let’s turn our talk to podcasting. So you have been on the air, I guess we could say, although you’ve been digital and on video and publishing podcasts for a decade, primarily about compliance. How is this influencing business and compliance? What do you see changing from the time that you started, doing what you do to where we are today in terms of the role of podcasting in business, in compliance, in other areas?
Sure. So for the business, there are five reasons to have a podcast. Number one, thought leadership. Number two, audience engagement. Number three, relationship building. Number four, content creation and number five conversion. So each one of those is a little bit different and has a little bit different focus. You can have multiple reasons within there, but, you need to have a reason for doing that. Having said that every business should have a podcast, period. You are missing the boat if you don’t have a podcast. Over 85 million people listen to multiple podcasts per week. And over 160 million people have listened to a podcast.
Those numbers are just incredible. If you’re not using a podcast format to publicize yourself and your company, you’re missing a incredible resource. Number one. Number two is from a podcast, you can generate social media marketing content and create video grams, audio grams, tweets, LinkedIn posts, Facebook posts, Instagram posts. If you want to go all the way, you can do a TikTok post. But, it’s as powerful a marketing tool as you can have, it’s not going to replace what you’re doing, but it’s going to supplement it. People trust because of the audio format more than they trust the printed word or even visual or video.
If I go back to those five reasons to start a podcast, number one, thought leadership, you want to show you’re a thought leader. here’s the great thing about a thought leadership podcast. You get to learn from every person you talk to. And I see around corners further and faster than anyone in compliance.
It’s not because I’m the smartest person, it is because I’m talking to the smartest people and I’m putting all those dots together because I’m talking to everyone. And so it gives me the ability to improve my speaking skills, my book writing skills, my thought leadership skills. Cause I’m interviewing people for relationship building. If you want to do business with a company and I’ll just use myself. Melomans and my name is Tom Fox. I’m a solo lawyer. I’m experienced in contracts. I’d like to talk to you about doing contract work for you. They may or may not respond.
But email them and say, My name is Tom Fox. I have this podcast network. I want to interview you for a podcast and I want you to talk about you. You will get a response 100% of the time and it will be 100% yes. Everybody wants to talk about themselves. Three, content creation. When we were getting ready for the pod, you asked me how I managed to write all these books. It’s because the podcast is a part of my content creation, a process. It can be a podcast leads to a blog post, leads to a white paper, leads to a chapter of a book.
I wrote, modestly, I would say the definitive compliance handbook. And I wrote it and to edit and proofread, I can’t just read. I have to read out loud. And it dawned on me that if I’m reading this out loud, that’s a podcast if I record it. So for a year, every day, I did a podcast based upon a couple of pages I wrote for a book and I literally had a red pen with me and every time I saw a mistake, I circled it. I didn’t edit while I was recording.
I just circled it for later reference. And so that worked for me. You can use the flip side of that. My latest book I published this summer. I did a 10 part podcast series on 10 separate things you have to do if you find yourself in an enforcement action. And I use those 10 podcasts to form the basis of 10 separate chapters for my book. It’s a wide variety of ways there. Conversion is how do you convert somebody from a top of the funnel, listener, engager, going behind your gated website, whatever it may be to a customer. So that’s a different track as well. I got one in there somewhere.
Tom, I’ve got a little bit to learn from you because I do have some books on my horizon, leaning in, obviously, to what I’ve done with the podcast, but you are way far ahead of me on that, so I’m going to have to learn some of your wisdom and methodologies, but I agree with you.
I think podcasting has a huge influence on business, and I certainly see it with the folks I interview, with the conversations I have, with the relationships I’ve built across the industry. One of the things that always amazes me when I talk to people, number one, just how personal it is, not just about me, but about the leader and the number of times I’ve had people tell me, oh, yeah, I listened to one of your podcast episodes when I was going to interview with that company or with that leader, and I understand a lot more, because you understand a lot more now, I would tell you in the world of compliance, if this falls into a compliance category.
There’s a lot of leaders that are still concerned about being on a podcast, certainly in the chemical industry, because corporate communications doesn’t want to invest relations and is afraid of it. But, as you and I talked about before we got started, this is a friendly conversation, there are no state secrets.
It is not investigative journalism. If you’re looking for that look elsewhere.
So let me give you the best answer to that.
Yeah.
I read about a company that started an internal podcast for company employees only, and it was senior executives on whatever the topics were. And it turned out that the podcast was hugely successful and not for the reason they started it. It was successful because it humanized the ELT, who most people had never met.
When I was in Halliburton, I think I knew one of 10 people on the ELT and that’s because he was the general counsel and I was in the legal department, but it actually drove positive corporate culture. Because they felt like they had a relationship with those people and that they could sit down literally and if not talk to them, they could listen to them talk on a podcast. It can be a great boon for your corporate culture if your leaders talk about themselves.
Love it. Tom, this has been fun. Where can people find you and your podcasts and your podcast network?
They can find the Podcast Network at www.compliancepodcastnetwork.net. You can find me on LinkedIn at Thomas R. Fox. You can email me at tfoxx@tfoxxlaw.com or you can call me at 832-744-0264. If you’ve thought about having a podcast, I’d love to talk to you. Or if you just want to chit chat, I’d love to talk to you.
Awesome. Tom, thank you so much. And thank you everyone today for joining us. Keep listening, keep following, keep sharing, and we’ll talk with you again soon.
About Tom Fox:
Tom Fox is the No. 1 Voice of Compliance, having founded the only podcast network in compliance, the award-winning Compliance Podcast Network. It currently has 60 podcasts. Tom has won 28 awards for podcast hosting and producing. He has been honored with awards for podcast series as diverse as Looking Back on 9/11, Understanding Lyme Disease, and Trial of the Century: the Enron Trial. He is also the co-founder of the Texas Hill Country Podcast Network.
Tom is also an international best-selling author, having written 28 books in the areas of compliance, business ethics and leadership. He is the author of the seminal work, The Compliance Handbook, 4th edition. He is most proud of his 3 best-selling children’s books on compliance Being a Compliance Officer is Awesome, Speaking Up is Awesome and Compliance Saves the Galaxy. All 3 were published by Dinosaur House and are available at Amazon.com.