Connected Compliance

Thomas Fox - Compliance Evangelist

I recently had the chance to visit with Valerie Charles, the Chief Strategy Officer (CSO) at GAN Integrity, Inc. (GAN Integrity) about a subject that is fastly becoming one of the more topical conversations in the compliance community – connected compliance. Years ago, back in the original incarnation of This Week in FCPA, which was co-hosted by Howard Sklar and myself, Sklar talked about compliance convergence which communicated the junction of different types of compliance within an organization, such as anti-bribery compliance (ABC), anti-money laundering compliance (AML), export control compliance and others. However, connected compliance takes things a step further as not only does it connect ABC, AML, export control and other forms of compliance but it connects other corporate functions flowing to and from compliance.

Next week, in a five-part podcast series sponsored by GAN Integrity, I will explore why compliance is disconnected and what can be done to connect it, how to build a connected compliance program, how technology can help in this endeavor and, finally, what is the human side of compliance in this context. The series is a fascinating exploration of where compliance is in 2019 and where it is headed down the road.

For a Chief Compliance Officer (CCO), this can be difficult as all of the pieces and parts of working a compliance program may well be siloed in your organization. However, the path to connectedness can be facilitated by having an integrated technology solution, which can collate items to make life easier for the CCO. It also allows transparency into what everybody’s doing and ultimately to operating your compliance program in a more of a holistic way rather than an ad hoc basis that focuses on whichever part of the program is getting attention on a given day or time period.

This siloed nature of many corporations can be legacies of multiple acquisitions, organic growth or other factors. However, Charles feels that it is “now important to create a platform that allows senior business leadership, compliance leadership and other leadership in an organization to have data in one place to easily see reports that are relevant to whoever’s viewing that particular report.” While she sees this overall business process as improving, it is important to continue to emphasize the “massive benefit of having an integrated, connected, technology that facilitates the information for all business leaders. A good technological solution for internal compliance  helps that process along.”

Overall, this means bringing a technological solution to the business process in a way that lawyers can understand, but also compliance practitioners can put in place and then utilize with the rest of the business units in the variety of corporate functions. This can include Human Resources (HR), Finance, Accounting, Audit, Procurement and Supply Chain, even up to the Chief Information Officer (CIO), i.e. all corporate functions, to allow a connectedness for not only greater efficiency in compliance but greater business efficiency leading to greater profitability.

Charles said, “having good communication and data feeds that go between the other business units in an organization matters to the compliance team. Conversely, the compliance team offers data that may be very helpful and useful for those functions. Finally, having an easier way to flow the data and information between business units is absolutely critical. All of which elevates the voice of the compliance function within the organization by allowing that type of connectedness.” Connected compliance goes out beyond the four corners of an organization. It includes those with which your organization does business. This means that you are not simply hoping your business partners are vetting their own third parties, you are connected in a way that allows you oversight to know if this is not being done. It is a way of ensuring its being accomplished on an ongoing basis and is not simply a one-off due diligence review.

This example also points to one of the key business advantages of using a technological solution to facilitate connected compliance. It is how a technological solution can drive greater efficiencies for the compliance function. Charles believes this demonstrates how administrative the compliance job can be and a technological solution can take over these more administrative functions. It can be something as simple as ““when is it time to vet the third party? Simply put, you do not have to slow down the pace of the business and this pace of revenue generation to keep the compliance function current.” She went on to state, “compliance leaders are very good at understanding the business and mapping the things that you need to do in the business, the controls that need to be in place, mapping them in a way that will slow down the revenue generation process as little as possible.” One of the benefits of connected compliance is leveraging technology to support them.

Compliance began as a legal response to laws such as the Foreign Corrupt Practices Act (FCPA). Compliance programs have evolved beyond those initial policies and procedures written by lawyers for lawyers. Compliance evolved into a business process that makes companies more efficient and, at the end of the day, more profitable. The connectedness of compliance through technology is another step in the evolution of the compliance function.

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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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Thomas Fox - Compliance Evangelist

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