This week I am running a three-part blog post series and three-part podcast series on compliance lessons from one of the most beautiful cities on earth, Venice. We will consider how construction in Venice can inform your compliance program, how the Venice ship building and repair business located in the Arsenale inform both corporate culture and your compliance program and how Venice created the first modern day hotline reporting system. In this first blog post and accompanying podcast we go back to basics by considering the importance of simplicity in compliance programs was highlighted, drawing a comparison to the simple yet effective block and tackle pulley system used in Venice.
One of the things that has long fascinated me about Venice is how so little of the 21st century has impacted it. Take construction, for example. All materials must be brought to the city via boat, offloaded and then lifted by hand or by a handmade machine. Seen to the upper stories of a building where the residents are located. As no one lives on the ground floor anymore, as all the ground floors are now flooded, if the building is not on the water, the ground floor is used as a commercial establishment, but unlike other large metropolitan areas, there is no room for cranes or other large mechanical lifting devices.
I thought about this when I saw workmen lifting up materials through a block and tackle pulley system, which has been in use since antiquity. Not only were these workers doing it the old-fashioned way, but they were also getting the job done. As I watched this most basic level of construction, I thought about some of the things the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) have said about what and how a compliance department should be doing compliance.
Sometimes the most basic and obvious methods are overlooked in compliance programs. Just like the block and tackle pulley system in Venice, which may seem quaint and old-fashioned, it still gets the job done effectively. The same concept applies to compliance programs – simplicity can lead to optimal results.
One of the key factors in the importance of compliance departments is the availability of resources. A compliance department must be staffed with an appropriate number of professionals dedicated to the day-to-day work of compliance. This includes answering phone calls and responding to emails promptly. It is not enough to have someone in the seat; they must actively provide guidance and advice on complying with the company’s ethics and compliance program.
Having a live person to answer questions and walk noncompliance individuals through the process is essential. Compliance practitioners must possess the expertise to answer questions that come into the office. The DOJ has emphasized the importance of expertise in compliance functions, stating that it is not just about headcount but also about having knowledgeable practitioners who can provide accurate guidance.
However, balancing the need for resources with simplicity can be a challenge. Compliance departments must find the right balance between having enough staff to handle the workload and avoiding unnecessary complexity. It is crucial to avoid becoming the “land of no” and instead focus on providing practical answers and solutions to compliance-related queries.
Another challenge is ensuring that compliance departments are available and responsive when needed. Compliance personnel must be present to answer phone calls and respond to inquiries promptly. This includes being available on Fridays or during urgent situations. Failure to have someone available to answer questions can undermine the effectiveness of a compliance program.
The comparison to the block and tackle pulley system in Venice highlights the importance of simplicity in compliance programs. Sometimes, the old-fashioned way can be the most effective way. By keeping compliance programs simple and straightforward, organizations can ensure that employees understand and follow the policies and procedures.
Compliance departments are crucial for implementing and maintaining ethical standards within organizations. They provide the necessary resources and expertise to guide company personnel and ensure compliance policies are understood and adhered to at all levels. Simplicity in compliance programs is essential for optimal results, just like the block and tackle pulley system in Venice. Balancing resources, responsiveness, and simplicity can be challenging, but it is necessary to achieve an effective compliance program. By considering the impact on employees and making decisions that prioritize simplicity, organizations can create a culture of compliance that is both effective and efficient.
[View source.]
