Moving Compliance through an Organization

by Thomas Fox
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We often talk about tone at the top. But in many ways it is tone further down the organization which is more important for this is where the rubber hits the road and compliance is done on a day to day basis. I recently saw a couple of articles in the March/April Issue of the SCCE Magazine which discussed the “How-To” of compliance. They drove home several excellent ideas on specific steps that the compliance practitioner can use to move the compliance discussion from simply a tone from senior management that we will do business the right way down into middle and lower levels of the company where most of the business gets done.

The first article entitled “Success: You hit the target you aim at” is by Frank Navran . In this article, one of the things that Navran discussed was expanding on the “How-To” of making change in ethics and compliance occurs throughout the organization. He listed seven steps which he believed can not only make change happen but can make it stick as well.

  1. Position, philosophy and belief. Interestingly, Navran begins not with a top down item but a bottom up approach. He believes that an “organization’s and senior leadership’s positions can typically be improved, supplemented, and/or modified with input from employees and other stakeholders.” Further, once all company stakeholders, both up and down the chain, have inputted into the organization’s core beliefs, they will become “integral to the identity of an organization.”
  2. Formal organizational systems. Navran believes that formal systems are needed to guide everyone’s “day-to-day behaviors” in an organization. Without these formal structures in place, even the most robust informal system for doing business in an ethical and compliant manner can be “demolished by one or two serious infractions.”
  3. Informal leadership systems. Navran nails this concept by stating the “Informal leadership is not about what we say. Rather it is about what we do.”
  4. Measures, rewards and sanctions. Navran notes that typically what we measure is what you get. This makes it imperative that ethical standards are communicated as clearly as the “objective outcomes that are the more conventional measures of success.” It is equally important that the sanctions for non-ethical or non-compliant behavior be levied and such conduct not allowed to continue.
  5. Communications and education strategy. It matters not only what we say but how we say it. Navran emphasizes that “If we want our commitment to ethics to be credible, then it has to be reflected in both our words and actions. It has to be mirrored in what we teach, both formally and by example.”
  6. Response to critical events. Navran believes that the most important indicia “in determining what others believe to be our priorities is how we behave in response to a critical event. What we do when the stakes are high, time is short, and the pressure is on reveals our priorities and our principles.” So when the pressure is on and the whole world is watching, if leaders act according to their stated vows of doing business ethically and in compliance, this will send a strong signal to the rest of the company. And, simply put, if they do not employees will understand their true values.
  7. Hidden agendas. If employees believe that leaders have a hidden agenda, they lose credibility as a leader. Navran thinks that it is important that the “perceived motives and agendas are consistent with how we behave and what we say, expect, or require of others.”

Navran ended his story with an interesting parable, that of the “wrong rock”. In this story, a manager asks you to perform a task, which is to go outside and get a rock. You do so. When you return, the manager says that you did not get the rock he wanted. Navran derives from this tale, that “If you know the goal and the associated success criteria, it is easier to succeed the first time.” So if doing business in an ethical and compliant manner is your goal, it will help employees if you provide to them the values you wish them to hold through your own actions.

The second article which caught my eye was authored by Shelley Aul and Christina Reese and is entitled “Your board is engaged, but what about management?” In this article, the authors discuss some of the questions presented at a session at the SCCE 2012 Annual Conference. In this session, they asked the following questions, “what about your organization’s “mood in the middle” and “buzz at the bottom”?” They listed some of the successes they heard from the conference attendees for engagement of all employees in compliance and ethics. The suggestions included:

  1.      Create an Ethical leadership award - Award management and employees for going above and beyond expectations.

  2.      Host an internal ethics and compliance conference - Have your company host an in-person or virtual conference with management where they learn about ethics and compliance topics that are important to them and their roles.

  3.      Create ethics and compliance liaisons/champions/networks - Identify employees from across your organization who can act as an extension to your program. The representatives can be leveraged to share information with employees and they can relate information back to you to help improve the program.

  4.      Create ethics and compliance targets and goals - Implement an ethics and compliance component into performance reviews and bonus goals for all employees.

  5.      Sponsor Ethics and Compliance Week - Work with management to participate in a companywide Ethics and Compliance Week.

  6.      Leverage internal company e-newsletters - Add a “Compliance Corner” to an already existing management-only e-newsletter. In doing so, you can provide information and scenarios to discuss in their department/team meetings, without having to create an additional email.

  7.      Create Management toolkits - Develop a toolkit with ethics and compliance resources that management can easily use. Post the toolkit in an online portal and keep it updated when things change.

  8.      Meet with new hires - A compliance department representative should meet one-on-one with new hires or newly promoted managers. Explain to them your role, the resources available to them and follow-up with them periodically. The compliance function should develop such relationships early.

  9.      Develop peer-to-peer recognition programs - Proactively seek employees who are doing what’s right by asking them to nominate coworkers who have helped them in their jobs. Have management locally recognize those who are selected.

  10.  Train the trainersTrain your management to cascade training by having them train their staff on ethics and compliance-related matters.

Both of these articles lay out some excellent, practical ideas that the compliance practitioner can put to use or use to measure a compliance program against. If you are not a member of SCCE, you should join, the reason being is that the information it makes available to the compliance practitioner makes it one of the best value compliance resources on the market.

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.

© Thomas Fox, Compliance Evangelist | Attorney Advertising

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