Today is the final post in our Compliance Experts series. Today’s post focuses on common issues facing compliance professionals as well as how the compliance profession is growing and changing.
Why do compliance programs sometimes lose their effectiveness?
Compliance programs are too often designed as “stand alone” ones that fizzle because they are not embedded in other corporate routines such as strategic planning; (B) the compliance program design lacks a sufficient monitoring and measuring element—the old adage of “what gets measured gets managed” is very true; and (C) the CEO and executive team lose focus on compliance because of other concerns that unfortunately shift their attention and commitment.—David Birk, JD, Black Belt Compliance, LLC www.blackbelt-compliance.com
Change fatigue. If a compliance program is implemented because of a “burning platform”, interest will wane when the fire is out unless you engage with employees on a more personal level, talking about ethics and doing the right thing NOT because it will keep the company out of trouble, but because it is good for business and good for employees.—Sally March, JD, CCEP, CCEP-I, Director, Drummond March & Co. Connect with Sally on LinkedIn
Sometimes people get comfortable. If something seems to be working and all the metrics make sense and tell the right story, it instills a false sense of security. There will always be new risks and threats to running an ethical business and doing the right thing. If a company is just starting off down the road to creating an integrated global E&C plan, then they may be overwhelmed by the share volume of material and training they need to create and rollout. Once they settle into a pattern, it can be easy to get lulled into a false sense of security. Programs must always be invigorated to stay current.—Jay Rosen, Vice President, Language Solutions, Merrill Brink International http://www.merrillbrink.com/legal-translations.htm, Connect with Jay on LinkedIn
If a Compliance Program is not regularly aligned with the company’s strategy and if the executive management and the board is not involved in such alignment, a Compliance Program is very often set adrift. In this journey of solitude a Compliance Program very easily falls into the groove of running the mill and doing the standard things, which is not necessary what the company needs.—Paul Zietsman, Trade Compliance Lead Specialist, Sadara Chemical Company Connect with Paul on LinkedIn
Because organisations have ticked the boxes that they believe the law has required of them, and thinking that yearly training on bribery and corruption, for instance, is enough to keep them out of trouble is naive and lazy. Influence or lack thereof, of the compliance and ethics officer may be another reason. If they are simply know as compliance officers, there may be a clue in that title, in that expectations of the role and importance of it are simply not understood and acknowledged.—Jane Mitchell, FRSA–Director, JL&M; Chair, eCP Connect with Jane on LinkedIn, Follow Jane on Twitter
Lack of awareness of changes in company or its employees; failure to keep up to date on peer group developments and new compliance tools; failure to obtain increased resources as needs increase; complacency due to lack of disasters (which may be due to luck as much as compliance programming).—Theodore L. Banks, Partner, Scharf Banks Marmor LLC www.scharfbanks.com
What are some warning signs of a corporate culture problem?
Cut-backs in compliance budgets in the face of reported problems; change in organization structure to marginalize compliance employees; emphasis on financial goals over everything else; domination by a CEO who determines all rules without regard to law or ethics; pressure from shareholders who care nothing about medium or long-term operation of the business but only want to increase share price now; failure to take meaningful action when a compliance incident occurs; ambiguity or silence from management regarding compliance.—Theodore L. Banks, Partner, Scharf Banks Marmor LLC www.scharfbanks.com
Employee churn, complaints about bullying, apathy about raising concerns, leadership that isn’t engaged with the program, the list is long…..—Sally March, JD, CCEP, CCEP-I, Director, Drummond March & Co. Connect with Sally on LinkedIn
The list is long, but a key indicator is calls to the hotline/reporting line. Another critical bank of knowledge is provided by engagement surveys – and not just the so-called ‘ethics’ questions. Information on whether people feel motivated to do their best work, whether they feel as though they are contributing to brand reputation, whether they see a long term future with the organisation. Whether or not there is a clear and coherent people policy and whether performance management and reward is based on simply meeting targets or has a values-based elements to them. We could go on, but these are somewhere near the top of a long list. Strange as it may sound, you can also ‘feel’ whether there’s a problem, and almost instantly you walk into an organisation.—Jane Mitchell, FRSA–Director, JL&M; Chair, eCP Connect with Jane on LinkedIn, Follow Jane on Twitter
How has compliance changed in the last 5 years?
CECOs and CCOs have more visibility within the organization. And more technology and tools to do the job. Compliance is still a very flat organization which is entrusted with executing global rollouts of all policies and training materials. Unfortunately, the pressure to deliver on quarterly numbers and execute business plans still exists and it seems that the only companies that have gotten religion are those that have unfortunately been burned by getting too close to the fire. It is encouraging to see the growing number of corporate citizens who are sharing best practices with the E&C community and not just doing their public penance for past sins, but are genuinely concerned with paying things forward for the greater good.—Jay Rosen, Vice President, Language Solutions, Merrill Brink International http://www.merrillbrink.com/legal-translations.htm, Connect with Jay on LinkedIn
More and better technology in the management of the program and more compliance risks tied to technology.—Theodore L. Banks, Partner, Scharf Banks Marmor LLC www.scharfbanks.com
I think 5 years ago there was still quite a few different views on what exactly a Compliance Officer should do. Whether it was awareness, training, risk management of even auditing. Each organization’s Compliance Function had a fairly different scope for their roles. I think we are getting closer to the point where it is widely acknowledged that a Compliance Officer should fulfill all of the above. I also believe that going forward the Compliance Officer’s role as an integral part of a successful Combined Assurance Model will become more important and that Compliance will have to become an equal partner with other assurance providers like Internal Audit, Risk Management, Company Secretarial and EHS in owning the Combined Assurance Plan.—Paul Zietsman, Trade Compliance Lead Specialist, Sadara Chemical Company Connect with Paul on LinkedIn
I believe that there is a recognition that compliance without engagement, values, behaviours and commitment to an organisation’s higher purpose than simply increasing stockholder value, is very difficult to embed. If you haven’t joined the dots of all of this and put compliance in a business-focused context, organisations are now realising that it is less successful.—Jane Mitchell, FRSA–Director, JL&M; Chair, eCP Connect with Jane on LinkedIn, Follow Jane on Twitter
Where do you see the compliance profession in 10 years?
With the massage growth in the regulatory environment, not just in volume of new regulations but also enforcement, I only see a greater need for more sophisticated compliance departments at higher levels in corporate executive suites.—William (Bill) Kruse, Vice President- Law & Counsel/Regulatory Compliance Officer, Gallup Connect with Bill on LinkedIn
More organizations will recognize the importance of the function, but it still won’t be universal.—Theodore L. Banks, Partner, Scharf Banks Marmor LLC www.scharfbanks.com
I hope with a broader understanding of the softer issues that are critical to successfully implementing a compliance programme. Therefore I would hope that we will see a broader skill set and deeper conversations taking place in organisations.—Jane Mitchell, FRSA–Director, JL&M; Chair, eCP Connect with Jane on LinkedIn, Follow Jane on Twitter
I am hopeful that the strides we have made with awareness, teaching and having more technology, avenues and delivery methods to get the message out will result in a substantial decrease of the large multibillion dollar settlements. Not just from a ABC perspective, but also for helping our teammates and colleagues receive the proper education and have the necessary resources to make good and even better workplace decisions.—Jay Rosen, Vice President, Language Solutions, Merrill Brink International http://www.merrillbrink.com/legal-translations.htm, Connect with Jay on LinkedIn
Interested in learning more? Each expert that contributed to this week’s posts is also speaking at our Annual Compliance & Ethics Institute, Sept. 14-17 in Chicago, Illinois. For more information, visit www.complianceethicsinstitute.org