Focus on that creation of value going forward...

[The following Q&A with Tom Fox on innovation in compliance programs comes on the heels of publication of his new book, The Complete Compliance Handbook, which can be purchased online here.]

Q: Why is innovation a mandatory part of a best practices compliance program?

Tom Fox: The DOJ/SEC made consistently made clear that all compliance programs must evolve and innovate. In the 2012 FCPA Guidance they stated. “Finally, a good compliance program should constantly evolve.” 

Under each DPA and NPA it states, companies must “evaluate and improve their effectiveness in preventing and detecting violations of anti-corruption laws and the Company’s anti-corruption code, policies, and procedures, taking into account relevant developments in the field and evolving international and industry standards.” These mandates only expanded under the Evaluation of Corporate Compliance Programs.

Q: You spoke about innovation in compliance from the regulatory perspective, what about from the business perspective. 

Tom Fox: Even more importantly, you must have an innovation strategy for your compliance program to keep up with business changes and the changing nature of fraudsters. The key to success is that every compliance practitioner must be able to lay out an innovation strategy for compliance that details the efforts that will support the overall business strategy. This means creating an innovation strategy for compliance that will create value for customers of compliance (i.e., employees), third-parties, and the customer; show how the company will capture that compliance value going forward; and, finally, which types of compliance innovation to pursue.

Q: What should you consider in your innovation initiatives? 

Tom Fox: There are several questions you need to consider in connecting innovation to strategy. Initially, how will innovation create value for the customers of compliance; i.e., your employees and relevant third-parties? Your innovation can make compliance faster, easier, quicker, nimbler and more agile.

Focus on that creation of value going forward. Next: what types of innovation will allow the company to create and capture value, and what resources should each type receive, such as a change in technology and a change in a business process? These are some good questions to begin with going forward.

Q: How does all of this tie together?

Tom Fox: Start with a strategy which has senior management buy-in and support, then move to implement. Finally, use data in a feedback loop to fine tune your innovations.

Innovation in compliance is one of the key differences between those who advocate static compliance standards embodied in a written compliance program and those who advocate an operationalized compliance program. It is that the latter that creates an active, vibrant and effective compliance program.

That is the bottom line for innovation of your compliance program going forward.

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Read more in Chapter 9 of The Complete Compliance Handbook, which can be purchased on Amazon.com click here.

To purchase an autographed copy of The Complete Compliance Handbook from the author click here.