Revamped compliance processes key Albemarle win as Compliance Program of the Year

“This is such an honor for us and a pleasant surprise to the entire Albemarle team,” said Roberta Paoloni, Albemarle’s vice president of ethics and compliance. “Our ethics and compliance program is purpose-driven and values-led, and we are deeply proud of this accomplishment.”

Albemarle was selected for the award by showing measurable successes, demonstrating cultural impact across the business, and telling a story that ethics and compliance are baked into the decision-making process for the company.

There were a lot of people involved in the work and some that have since left the company, like former Chief Risk Officer Andrew McBride, who was with Albemarle from 2018 until January.

The compliance team has worked to embed compliance requirements into many key business processes, including employee performance, hiring, onboarding new suppliers and third-party sales representatives, and analyzing travel and expenses, according to Andrea Rondot, the company’s Europe, Middle East, and Africa compliance manager.

Last year marked the culmination of a five-year compliance journey at Albemarle. In September, the company agreed to pay more than $218 million to resolve investigations by the Department of Justice (DOJ) and Securities and Exchange Commission into violations of the Foreign Corrupt Practices Act (FCPA).

In January 2018, the company self-disclosed to the DOJ apparent misconduct related to violations of the FCPA in its refining solutions business—now a wholly owned subsidiary known as Ketjen—in Vietnam, Indonesia, India, China, and the United Arab Emirates between 2009 and 2017.

At the time of the self-reported investigation to the DOJ, the company sold catalysts through full-time employees and third-party sales agents. After the misconduct was uncovered, Albemarle took action to address those involved. It also decided to transform its go-to-market strategy, eliminating the use of third-party agents and implementing extensive remediation measures, including incorporating data analytics into compliance processes and hiring compliance professionals in all markets where the company operates.

After the company signed a non-prosecution agreement and obtained a 45 percent reduction of its penalty, Acting Assistant Attorney General Nicole Argentieri described the case as “an example for companies considering how to achieve the best result under our policies.”

Below are insights into some of the steps Albemarle took to improve its compliance processes.

Bonus clawbacks

Changes regarding the use of third-party sales agents were “implemented across the organization, so they affected our catalyst business as well as our two other business units,” said Jose Colondres, the company’s regional compliance director for the Americas.

The company withheld bonuses during its internal investigation from employees who engaged in suspected wrongdoing and from employees who had supervisory authority over the employee(s) or business area engaged in the misconduct, he said.

Albemarle qualified for an additional fine reduction in the amount of the withheld bonuses under the DOJ Criminal Division’s clawback pilot program.

Use of data analytics in compliance

Albemarle also incorporated data analytics with four key compliance-related goals in mind: risk identification, risk response, testing effectiveness and reporting.

“One example is that we integrated our third-party due diligence system with our customer relationship management sales system, and now we automatically block sales for third parties if or when the third-party accounts expire in the due diligence system,” said Trey Cook, a data analyst at Albemarle.

Another example is in reporting. “The company takes data from multiple internal databases and combines them into dashboards that can be assessed by other stakeholders in various functions in the company,” Cook shared, “all the way up to the senior leadership of the organization.”

Customized training

To ensure all employees understand Albemarle’s code of conduct and how they can apply its principles to their daily roles, the compliance function has developed a robust compliance training and communication program.

“With more than 9,000 global employees, Albemarle requires all employees to complete an annual training on its code of conduct,” said Linlin Wu, the company’s compliance director in China and Asia.

Albemarle also assigns risk-based training depending on each employee’s role and ensures that each employee receives regular compliance reminders.

“We provide employees with multiple touchpoints to compliance over the course of the year,” Paoloni said. “We want to make sure those touchpoints continue to happen in person or through written communications, videos, or conversations with their managers.”

Additionally, Albemarle conducts compliance training for its business partners, so they understand the business partner code of conduct and its expectations.

“It’s an enhancement of the program to go beyond the borders of your company to also engage with your business partners,” Paoloni said.

Interactive code of conduct

In 2019, Albemarle introduced an interactive code of conduct that includes videos and links to company policies, procedures, resources, and definitions, said Elizabeth Jablonski, ethics and compliance global analyst.

“It’s designed so that employees can search by work activity—it’s really easy for them to navigate,” she said. “We can also track which policies and procedures are receiving the most attention from employees, and which are perhaps being overlooked, to make improvements. We are very focused on continuous improvements to our program.”

In 2023, Albemarle’s compliance team made enhancements to the company’s investigation policy, clarifying roles and responsibilities for conducting investigations. The company then held customized training with all investigators globally, providing tips for conducting investigations and aligning everyone on the new process.

These and other compliance initiatives, some launched in 2023 and others refined from past years, all contributed to the company being selected as Compliance Program of the Year.