How to Tackle Retail’s Unique Compliance Risks

by NAVEX Global
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Battered by the rise of online shopping, cybersecurity and bruised by changing consumer patterns, retailers today must cope with a host of new headwinds—heightening the risks of compliance failures in a business that’s already up against some unique challenges.

Of course, every organization in every industry faces compliance-failure risks (harm to people, reputational damage, shareholder losses, etc.). But, as is outlined in the Ethics & Compliance Training Challenges in the Retail Industry, the nature of the retail business puts the industry at particular risk for two main reasons:

  1. Retailers can have huge workforces spread around the globe, and typically have a lot of turnover–particularly with seasonal work.
  2. Employees spend a lot of their time directly engaged with customers, meaning there’s little opportunity for training, much of which requires time to sit at a computer.

Download the White Paper: Ethics & Compliance Training Challenges in the Retail Industry


Because these factors make it expensive and challenging to train employees, a couple of unfortunate scenarios—both carrying significant risk—often result: Less training for employees or training only for supervisors.

The risks aren’t theoretical either—nor are the potential rewards.

Proof of effective training helped one retailer achieve a non-prosecution agreement after an investigation by the U.S. Securities and Exchange Commission and Department of Justice. In this instance, the retailer identified and reported allegations of bribery and corruption regarding its manufacturing operation in South America.

Indeed, U.S. regulators have generally signaled their willingness to consider lenience for companies that can point to adequate policies and procedures—including periodic training—in their investigations. The training should typically cover “company policies and procedures, instruction on applicable laws, practical advice to address real-life scenarios and case studies,” according to  A Resource Guide to the U.S. Foreign Corrupt Practices Act  published in 2012 by the SEC and the DOJ.

So, how should retailers make sure their programs meet those guidelines?

Training should incorporate burst learning strategies, including videos between 3 and 10 minutes in length. It should also be mobile-ready and on-demand, allowing employees to participate from the sales floor or anywhere during slower shopping periods. The training should also be trackable, as part of a system that’s audit-ready.

It’s often said that in regulator’s minds, “if training’s not tracked, it didn’t happen."

And retailers should focus their training on issues specific to the business they’re in. That means airtight training in such areas as harassment, discrimination, wage and hour laws, use of social media, diversity and inclusion, disability, discrimination, and misuse and misappropriation of assets.

Frontline employees—in retail that usually means sales people—are often the first to observe issues that can lead to value-destroying problems. Ensuring those employees—and their managers—are properly trained and empowered needs to be a top priority for every retailer.


View original article at Ethics & Compliance MattersTM

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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