Joshua Wallenstein

Joshua Wallenstein

Chief Compliance Officer & Assistant General Counsel, McDermott International

Josh Wallenstein is currently Director of Global Ethics & Compliance & Senior Counsel at McDermott International.  Mr. Wallenstein brings over a decade of broad-based legal and compliance experience in various sectors from both private legal practice and public in-house corporate compliance positions (including Baker Hughes and Weatherford in the global energy sector).  Having been based in Mexico City, Dubai, and various US cities, Mr. Wallenstein’s previous roles have emphasized the international legal and compliance functions necessary to support those sectors.  Prior to his work in the compliance sector, Mr. Wallenstein also served as an Associate Attorney at Linklaters and as Research Director at the Corporate Executive Board.  Mr. Wallenstein holds a J.D. from Stanford Law School and a B. A. from Southern Methodist University; he is a published author and frequent public speaker on ethics and compliance-related issues.

Ashley: My name is Ashley Csaki, Senior Director of Content and Experience at Momentum, and it is my great pleasure to introduce Mr. Joshua Wallenstein, Chief Compliance Officer and Assistant General Counsel at McDermott International. Josh is a featured speaker at Momentum’s 4th Oil and Gas Anti-Corruption Compliance Exchange, taking place September 20-21st in Houston. Welcome Josh.

Joshua: Hi. Thanks for having me Ashley.

Ashley: Absolutely. Our pleasure. So Josh tell me what does a day in the life of the Chief Compliance Officer at McDermott look like? Walk us through some of your primary roles and responsibilities.

Joshua: Well, it starts off with a strong cup of coffee or maybe five of them. I get to work really early, around 6 AM, mostly because we are a global company. Sometimes I have 7 AM conferences on the telephone which end up being 8 PM for our folks in Kuala Lumpur so it’s not necessarily agreeable on either side of the divide but that’s really the only time that we can all get together on the telephone. So, I do my conferences globally or teleconferences globally and then I try and clear out my inbox in the morning because it tends to be filled up with request for legal and compliance advice and decisions from all over the world.

Then, kind of mid-morning, I start with what I would call CCO program management. We have a routine of monthly and quarterly presentations to various constituents and a lot of my day is spent extracting information, analyzing it, developing it for the next presentation and then to the extent that I see any red flags or other areas for improvement, determining and implementing any kind of remediation measures that are needed. In addition to those presentations and that analysis, I’ve got annual goals which are large and potentially program changing initiatives, like a global risk assessment or audits of all of our joint ventures that have been taking up a lot of my time recently for the most part of most days as well.

Ashley: All right. And during the time of evolving government expectations, how do you stay on top of new regulatory developments?

Joshua: I do a number of things. I sign up for a number of different email blasts. I sign up for a law firm email blasts, accounting firm email blasts and a number of E&C practitioner blogs. I attend conferences. I particularly like Momentum, but I attend conferences in Houston and in other parts of the country. On occasion when I can, I attend local CCO meetings in Houston. We are lucky to have a fairly large and robust and very intelligent group of CCO individuals that get together in various parts of Houston to talk about issues, on an occasional basis, and be able to benchmark things against each other. The other thing that I find really helpful is to force myself to do both internal and external compliance presentations, because of the old expression “you learn by teaching others”. So it’s really been proven to be in true in my case.

Ashley: Excellent. In your opinion, what do you consider to be one of the greatest challenges Chief Compliance Officers currently face?

Joshua: It feels like many companies and certainly in the oil and gas sector but also I understand with other sectors for my colleagues in other sectors are experiencing some compliance fatigue. And compliance is a relatively new field for companies, and so it’s one where the human and financial resources that you put into it don’t necessarily correspond to specific outputs. And it’s really hard to measure things like integrity and ethics and it’s even harder still to show how integrity and ethics reduces costs or increases efficiencies.

So, many companies have invested significantly in compliance and they no longer want to invest to maintain. Even worse in the less profitable part of the oil and gas cycle where we find ourselves now, we are one of the areas that folks want to cut into or to consolidate with. It’s the old adages of why do we need compliance folks around the world when we are already an ethical company. Or we don’t need a lot of staff to tell us how to behave appropriately. And sometimes it’s in part our fault because we haven’t been able to demonstrate all the specific services and outputs that we provide to the company, and how we actually reduce costs. But regardless of the reasons why, when you are compliance architecture is not well-funded, internal controls can start to break down, which is precisely where the SEC is now focusing its enforcement actions now. And so I worry about that.

Ashley: Interesting. All right. To date, what is the best lesson you have learned during your time in compliance?

Joshua: So there’s an old Russian proverb that President Reagan used during his arms controls negotiations with Secretary Gorbachev which was “trust but verify”. It’s great advice for a CCO because we get a lot of information every day and it’s often incomplete or based on assumptions. I don’t often get maliciously misled but I often find that initial answers that I get are overbroad or imprecise. So, if you are in your CCO role and you base decisions on certain information, be certain to get proof that the information that you have is the truth and the whole truth and nothing but the truth.

Ashley: Right. Finally Josh, you will be discussing executing and maintaining a training program at the 4th Oil and Gas Anti-Corruption Compliance Exchange-what are some tips you have for ensuring an effective training program?

Joshua: Well, I read once that folks have an attention span of between 12 and 20 minutes. And after that you basically become the Charlie Brown teacher, wha-wha-wha-wha. So the best training programs that I have been a part of focus on short and impactful frequent training.

I like training that incorporates any number of the following things: I like them short. I like them often in short spurts as opposed to one long drudge. I like them humorous. I like them tailored and relevant to the audience, so they can actually see how this would work with their day to day job. I like them incorporating real world scenarios ideally from my own company so it’s much more impactful because it’s immediately relevant. I like them engaging. I like them entertaining. I like to use different modalities. I like videos. I like games when I can figure out how to do that. I like different presentation styles. I like live and online. I like newsletters. I like emails.

Basically, a variety is the spice of life and I think the one overarching principle I have that I’ve learned through trial and error is to avoid over lawyering a compliance presentation. Because first when you say the word compliance presentation, people immediately glaze over, and it’s because they know that they are going to be spoken to by a lawyer. Most employees don’t need to dissect the five elements of the FCPA and apply them to a law school hypo. What they need to know is merely what to be sensitive to and how to respond or otherwise who should you come to, when those scenarios pop up. That’s what I try and get across in as interesting and limited fashion as I can.

Ashley: Excellent. Well those are all the questions I have for you today. Thank you so much for taking the time to speak with us and I certainly look forward to hearing more from you this September in Houston!

Joshua: Well, thanks Ashley. Thanks for your time.