Compliance Today - July 2023
I recently was at HCCA’s 27th Annual Compliance Institute, and among the many great sessions was one in which the discussion addressed the use of fear tactics in compliance training. Citing examples of organizations and people getting in trouble for violating laws can have its place in training and educational programs. But overdoing it can lead to some unexpected and adverse consequences.
I recall many instances in my days as an investigator in which a subject took specific actions to conceal their fraud or noncompliance. However, I also observed that in a few of these instances, the wrongdoing stopped after the noncompliance had been covered up.
Taking steps to conceal acts of noncompliance is often a sign of intent—that the person knew what they did was wrong; they wanted to make it more difficult to catch them by altering or destroying records or taking other measures to cover it up. But how do we explain the cases where the subject stopped engaging in noncompliant activity after concealing their earlier acts? Did they suddenly become honest?
Or had they simply been doing something incorrectly, and when they realized this, were afraid to bring it to the attention of their supervisors, so they covered it up instead? Good people who make mistakes can attempt to conceal their mistakes if they weigh the pros and cons of reporting it to their bosses; they conclude that the cons outweigh the benefits.
Illustrating what can happen to individuals and companies when compliance issues arise can have value for a training program. But it must be balanced with establishing and maintaining a culture in which people are not afraid to bring their own mistakes to the attention of their supervisors.
I recollect one instance in which an accounting manager brought a fairly significant error he had made to the attention of the CFO, who responded by first thanking him before discussing what steps needed to be taken to correct the mistake. Towards the end of the conversation, the accounting manager said he had always been afraid to bring any mistakes to the attention of the previous CFO, who he feared would explode in a fit of rage and immediately fire him.
We have heard many times that culture eats strategy for breakfast, but it also eats fear any time of the day.
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