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(Wall) Street Cred

One of my most distinct memories from law school is my tax professor asking one of my favorite classmates what 20% of $200 is, and that classmate freezing like a deer in the headlights and stammering out that he came to law school because he wasn’t good at math. The professor, thinking that Joe (not his name) was trying to be funny, repeated the math question. Joe squeaked out that he didn’t know. The prof, in a state of incredulity, told us the answer and moved on with the lecture.

That was the day I discovered that most of my classmates had some level of math anxiety. I wonder now if this the thing that prevents so many of us in compliance & ethics (C&E) from being able to get coveted seats at the strategy table. We want that seat because we know that the earlier we can influence and give input on decisions, the more likely we are to avoid becoming the “Department of No.”

I think one of the reasons we don’t get invited to those meetings, though, is because so many of us haven’t done the work to establish our credibility as good business partners. We have a general idea of how our companies make money, but it’s not in the generalities that the law gets broken. It’s in the specifics of the balance sheet and the income statement. It’s in the assumptions and calculations that go into the numbers that make up those documents and spreadsheets.

All companies want to increase revenue. If we as C&E professionals are to be as effective as possible in helping our companies pursue revenue in the right way, we have to show that we understand the whys of the hows the revenue increases have been promised to shareholders. Without that understanding, we’ll always be viewed as outsiders who don’t know how the “real world” works. Without that credibility, all we can do is nibble around the edges of the mission we’ve taken on.

(Don’t worry about Joe — he’s been very successful in his career and is an equity partner at a big law firm. I’d bet 20% of $200 that he has a thorough understanding of how and why the firm is profitable.)