2021 outlook: Five compliance & ethics things to set up for success
January 15, 2021
Most of us came into this year happy we turned the page on 2020, and were cautiously optimistic for anything better than the personal and collective hand we were dealt last year.
But with the disturbing events that have occurred within the first week of January, the bar is still quite low.
So how do you focus to set up a winning formula for 2021? Here are five things to do right now:
1) Focus on culture
Culture can singlehandedly make or break a company. When it is strong, employees are bought into the values and behaviors that drive success, great employees are hired and retained, and most companies outperform peers in their vertical. Conversely, a weak culture leads to distrust, negative sentiment around company leadership, lackluster feelings of organizational justice, and may ultimately reflect in poor operational and financial performance. Many companies have been working hard to assess and improve culture, but much of that work has come from in-person interaction and observed behaviors that drive commonality and trust. Now that some of our employee populations are permanently online, the challenge becomes more difficult. It is the strength of the adaptivity of an organization (and its leadership) that will make the difference. To drive an ethical culture, make sure strong values-based messaging that tackles the present state of affairs is being communicated through leadership and management at every employee forum.
Be transparent about challenges and provide opportunities for employees to come together to help others. Move the dialogue online by opening employee instant messaging channels or virtual forums where employees can share and solution around challenges or engage in Q&A with compliance leadership. And remember, employees don’t just want to see talk, they want action. Make sure company policies reflect cultural drivers and commit to communicating the changes the organizations undertook in 2020 to further strengthen the culture of compliance.
2) Bring abstract compliance risks into employee reality
As practitioners, we spend much of our time identifying, assessing, and mitigating ethics and compliance risks. And in 2020, we may have seen new risks emerge as employees went remote and our way of doing business changed. But we need to critically evaluate how we translate macro risks (say increased data privacy or third-party diligence concerns) into employee reality.
In addition to training or messaging as we have done in the past, connect guidance more closely to tasks and internal processes that employees are actually doing. Interestingly, as compliance teams evaluate how well they are doing this, they may also find they need to gather additional data to have a better understanding of certain new or emerging risks. For example, there may be additional compliance risk in the operational parts of your business that require you to connect with stakeholders and system owners to understand how and where compliance guidance can make the biggest impact.
3) Continue to take cues from the DOJ
The June 1, 2020 DOJ updated guidance on the Evaluation of Corporate Compliance Programs seems ages ago, but it’s imperative we continue to benchmark our programs against it.
|If you haven’t started, 2021 should include evaluation of the elements of your program and whether they work in practice. This has historically been challenging for companies because they have trouble connecting the dots between operations, helpline, audit, culture, training, and other transactional data collected.
This year work towards gathering and aggregating the aforementioned data into an operational risk scorecard to tell whether your efforts are working. For any key risk as a high-level example (note this isn’t an exhaustive list of questions, rather a general guide):
First look at the standards and training you have in place and ask:
- Do you have an updated policy in place that is easily accessible and localized for employees?
- Have you trained your employees on proper handling of common dilemmas they can encounter, reporting, and where to seek guidance?
- Do those with management, reporting or investigation responsibilities receive additional guidance?
- Do behavioral insights from the training experiences demonstrate clarity and readiness in the audience? If not, what trends do you see?
- Is there messaging that reinforces appropriate behaviors to those who need it throughout the year?
- Outside of online training, are employees given clear guidance and resources to know how to do this task correctly?
If you answered yes to all the above, great. You also want to look at the controls, monitoring, and reporting you have in place:
- Are my internal systems and controls working as expected and monitoring for potential red flags?
- Do we see helpline reporting in the same areas that showed opportunity in the behavioral insights? If not, do we have a culture where people feel comfortable speaking up if they have questions or see alleged wrongdoing?
- Is my investigations and substantiation process working effectively through any reports and what additional trends are visible in this hindsight data?
To demonstrate whether your program is working in practice, evaluate the standards you have in place against the operational and helpline data collected in your systems. If there is a correlation between guidance, opportunity areas identified from training and related reduction in risky conduct or predictive insight into helpline substantiations for example, then you’re on the right track.
4) Accept reality…and adapt
2021 isn’t going to be perfect. It’s time to accept it and focus on progress. Gone are the days of keeping compliance plans afloat with scotch tape and bubble gum in light of a global pandemic. This hybrid virtual world of ours is the new normal, and it’s here to stay for a while to come. Compliance should also undertake more than a proverbial facelift and truly understand what business processes have changed forever and accommodate compliance guidance to align with new risks and exposures. This includes updating training, policies, and communications to reflect the new normal and making technology and automation your ally.
From risk assessment and monitoring for corruption and fraudulent activities, to using AI to deliver more tailored and efficient training experiences, we are in a new world of innovation and we must adapt and embrace it. And it’s not so bad – imagine a world whereby people only receive the compliance concepts they struggled with in a prior learning event— so they can build on their knowledge rather than wasting a ton of time of well mastered concepts. As practitioners, it’s time for us to embrace technology and data, not just for the DOJ but for the success of our programs.
5) Practice empathy
People are still processing quite a bit of turmoil and angst — and a new year has not changed that. Rather than coasting into 2021 and attempting to check off all those tabled work plan items from 2020, think about a handful of items that will provide the most impact to the company and its employees. While we want to ensure our employees are making the best ethical and compliant decisions, don’t discount the repercussions that can happen when emotional judgments take over and an employee feels too afraid to reach out for help or feels alone in a hard decision. We are all human with a lot going on personally and professionally. Although cliché, we must continue to ‘meet employees where they are’ and consistently provide resources to help along with a virtual ‘open door’ policy for the compliance team that stays front and center in all our messaging, be it formal training or reinforcement communications.
As compliance continues to shift from playing defense to going on offense by being proactive and predictive, we have an amazing opportunity to make 2020 count. The above framework should help you get off to a solid start and strengthen your seat at the table.
Have other things in mind you are focusing on to make 2021 a success? Let’s go crush this year together!
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