The relationship between compliance and HR can make or break a company’s culture of ethics and integrity. The DOJ’s revised Evaluation of Corporate Compliance Program requirements pushes for greater cooperation and coordination between these two departments to create a robust and effective consequence management system. In this episode, Michael Volkov discusses the implications of these new requirements and emphasizes the need for HR and compliance to work together to achieve a culture of compliance and ethics. See more +
The relationship between compliance and HR can make or break a company’s culture of ethics and integrity. The DOJ’s revised Evaluation of Corporate Compliance Program requirements pushes for greater cooperation and coordination between these two departments to create a robust and effective consequence management system. In this episode, Michael Volkov discusses the implications of these new requirements and emphasizes the need for HR and compliance to work together to achieve a culture of compliance and ethics.
Here are some key ideas you’ll hear Michael discuss in this episode:
The Justice Department is taking a prescriptive approach to mandating greater cooperation between compliance and HR, as there have been too many problems between these departments in the past.
HR and Compliance have joint responsibilities and obligations to achieve a culture of compliance and ethics.
An effective HR and compliance partnership can leverage resources to ensure the overall advancement and success of the company.
Companies must comply with the DOJ’s revised Evaluation of Corporate Compliance Programs and provide compliance with access to data generated across the organization. This is necessary to improve the effectiveness of the company’s compliance program.
DOJ now requires companies to maintain a robust and enhanced investigation root cause system to address the elements necessary for a culture of ethics and integrity.
A practical consequence management system can only occur when there is active cooperation and effective coordination between HR and compliance.
The new consequence management system includes financial penalties from clawbacks and deferred compensation schemes tied to compliance behaviors and requirements.
DOJ focuses on incentives and disincentives to enhance individual compliant conduct and overall accountability. Positive incentives include promotions, rewards, and bonuses; disincentives include deferment or escrow of compensation. CCOs need to champion the creation of this system.
CCOs must be seated at the senior executive level of business operations to fulfill DOJ’s expectations for overall consequence management in the disciplinary area.
Companies should consider cross-assigning business managers to compliance and vice versa to promote career opportunities.
“I have always advocated on behalf of a committee approach or some kind of independent, objective reviewer or the institution that metes out disciplinary actions to ensure consistency,” Michael says.
Senior management must establish a framework for effective coordination and cooperation between HR, senior sales executives, legal, and compliance to achieve a culture of ethics and integrity.
This framework should be empowered to work on behalf of the company to establish organizational justice. See less -
