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How EY can help
A November 2024 webcast hosted by EY Americas Investigations & Compliance Leader discussed how to mitigate and respond to these key compliance risks at each stage within the channel partner lifecycle. He summarized the key steps as 1) program governance and stakeholder engagement; 2) partner onboarding and selection; 3) partner discounts, incentives and rebates; 4) ongoing activities, risk monitoring and investigations; and 5) partner close-out. Panelists were Courtney Andrews, a partner in White & Case’s global white-collar and investigations practice; Ethan LeKate, a director of global compliance at Dell Technologies; and Karin Reiss, an assistant general counsel at Microsoft.
The panelists all described a dynamic risk environment along with regulations that are becoming more complex. They emphasized the need for technology companies to proactively engage within their organization, outside of just the legal and compliance functions, and to get all levels of employees educated and aligned about the strategic goals and key priorities of the channel partner compliance program.
Employees outside legal and compliance typically have an understanding of ethics, compliance and regulations, LeKate said, but complex regulations require more communication and guidance. “Employees are expected to have a deeper and deeper understanding of the program requirements and controls in order to take responsibility and manage the risks.”
1. Channel partner compliance is a team sport.
Microsoft’s network of channel partners extends into the hundreds of thousands, Reiss said. Microsoft’s program involves multiple functions and leverages embedded compliance professionals across the lifecycle, including a risk-based sales deal review and approval process. “We view compliance as everyone’s responsibility.”
2. Develop a risk-based, data-driven approach to all stages of the lifecycle.
Partner engagement starts with business justification and due diligence, including an assessment of any prior non-compliance with laws and regulations. Once engaged, understand and monitor discounts and incentives provided to the partner to identify potentially higher-risk activity. Leading programs examine discounts on government customer deals; Marketing Development Funds (MDF) and incentives for sufficient justification; and any red flags.