Brown v. Topeka and the Digital Change in Compliance

Thomas Fox

Thomas Fox - Compliance Evangelist

Today we honor one of the most important US Supreme Court decisions in the history of the country, Brown v. Topeka Board of Education, which was decided on this date in 1954. In the decision, the Court held that racial segregation in public educational facilities was unconstitutional. The historic decision, which brought an end to federal tolerance of racial segregation, by over-turning one of the Court’s most notorious decisions from the prior century, Plessy v. Ferguson, which had allowed ‘separate but equal’ treatment by the government. This decision marked a true turning point in American history, one that is still being felt today, even with the Court admonished that its ruling be implemented “with all deliberate speed”.

I thought the Brown decision on transformation was a way to introduce today’s topic of the digital transformation ongoing in the compliance profession. As we move from the work from home (WFH) phase of the pandemic to the Return to Work (RTW) phase, many compliance professionals will find the changes made to facilitate effective compliance are now enshrined in a best practices compliance program. One of the most prominent is the new compliance focus on data and the use of data analytics in a corporate compliance program. Of course, this change was not simply led by the Covid-19 pandemic but also the Department of Justice’s (DOJs) 2020 Update to the Evaluation of Corporate Compliance Programs (2020 Update).

In person training and in-person interviews were put on hold during the past year. Compliance professionals were required to rely on data and data analytics more than ever. This reliance is here to stay. Over the past year, many new digital compliance capabilities have been implemented and many processes that were formerly viewed as cutting edge ways of doing compliance have become standard operating procedure. This digital transformation will only grow and speed the changes coming in compliance. How can a compliance professional, professionally trained in law school with little to no digital skills, make this transition?

This question was explored in a MIT Sloan Management Review article, entitled How Organizational Change Disrupts Our Sense of Self, by Hal Gregersen and Roger Lehman. It focused on how employees adapt to new identities rather than new tasks. This is the right challenge for compliance professionals to focus on right now, because we are heading into a period that will make unprecedented demands on organizations to navigate big transitions successfully. This is true because of the digital transformations so many of them have embarked on and because those changes have been accelerated by a year of pandemic lockdowns and remote work. I found it had some significant insights for the compliance professional moving towards a new data and data analytics focused compliance discipline.

As a compliance professional, you will need to imagine the digital transformation taking hold in compliance to prepare for the future. If you, as a corporate compliance professional, are going to have a meaningful impact on your company’s future, you will have to do some role adjustment. The problem is that even though compliance professionals know they have a big transition to navigate, they have “sized up the management challenge all wrong. They are focusing almost wholly on the level of task change — on how job content will shift with the introduction of new technology, and how much reskilling will be required. This task-level change is essential, of course, and plenty hard to manage.” Learning new tasks is something almost every compliance professional has done, even if it started with learning how to read a balance sheet. The bottom line is that “most can approach it with some confidence. They might not like having to master new processes and tools, but they’ve consciously done it before and know they can do it.”

Recognizing learning data and data analytics is not a task-change but a role-change is the first place every compliance professional must start. Moreover, compliance professionals may see change as impacting their role with colleagues, typically as a “veteran generalist on the team who really understands the business”. The authors believe that such “major transitions cause personal disruption along three different dimensions: role adjustment, task learning, and emotional engagement.”

The authors believe, “By understanding that roles are socially constructed and dynamic, they [compliance professionals] can gain a fresh perspective on how different people contribute to a group’s success and can see that it is possible to make deliberate, positive changes. They begin to add the new skill of analyzing and adjusting the roles they are playing to their repertoire.”

The authors listed out a series of what they called ‘prompts’ which each employee can ask of themselves. I have adapted it for the compliance professional.

  1. What is your formal job title or organizational position?
  2. What are the valuable roles compliance plays?
  3. How important are these roles to you? Which would be most upsetting to lose or to have respected less?
  4. How do you think other key stakeholders perceive compliance’s roles and their importance? Is there a gap between your perceptions and the rest of the employees?
  5. What potentially disruptive change is happening to the compliance function?
  6. What impact do you anticipate it could have on your most important role as a compliance professional within the organization?
  7. How would that impact affect you emotionally and in terms of your ability to make an important contribution?
  8. Do you need to adjust how compliance or you yourself need to fulfill your role to fit the changed environment? What different tasks or priorities would that entail?
  9. Do you need to make a more fundamental role adjustment — stepping into a new role, retiring an old one, or assigning your various roles different relative importance?

By answering these prompts, a compliance professional can come up with a type of SWOT analysis, in which the strengths, weaknesses, opportunities, and threats inherent in compliance’s current set of roles are hauled out for explicit examination, leading to an action plan a compliance professional can put into place.

The authors conclude, “the point is that opening people’s eyes to this realm of conflict they were not consciously engaging with — revealing the problem they didn’t know they didn’t know about — is more than half the battle. Role adjustment is the essential process for navigating transitions on a personal level. Therefore, it is the key to navigating transitions at the organizational level, whether the transition in question is an exciting but daunting digital transformation or a welcome but anxious reentry into a post-pandemic office. Ignore it at your peril.”

[View source.]

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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