The Lifeblood Of Compliance: “Vertical” Information

by Michael Volkov

information lifebllodHere is a profound grasp of the obvious – compliance officers exist in a corporate organization. A  CCO’s success depends on others in the corporation.

What is the lifeblood of a compliance program?  The answer – “vertical” information.

You can build as many compliance policies, procedures, and programs as you want but without information the compliance program will die a certain death.  Without information, a compliance officer will be a lone wolf, a virtual stranger to the organization.

How does a CCO ensure access to information?  There are easy sources and then there are the more difficult sources.  First, the easy sources – every compliance program can generate information such as compliance reports: how many people executed on-line certifications? How many people attended training programs?  How many third parties are operating, where do they operate and how much are they paid?  CCOs can get lost in all this data.

Please do not get me wrong – there are many valuable sources of data to examine, review and analyze.  The questions above are just examples.

There are more important sources of information – it is “real world” intelligence.  What do I mean?internalreporting

At every level of an organization, employees know valuable information.  Employees know what is occurring and they have real intelligence which they can share with higher levels in the organization.  Many employees are reluctant to bring such information to their supervisors for fear of retaliation.  That is a hard perception to overcome.  It is one of the most significant challenges a CCO faces in an organization.

How do you encourage “vertical” – upward sharing of information within an organization?  It is an intractable problem which every organization faces.  It is too simplistic to answer this question by relying on anonymous “hotlines” and other reporting systems, most of which result in internal gibberish or nonsense complaints.

Vertical sharing of information in an organization depends on the culture of compliance, the incentives to bring forward information internally which may help an organization fix a problem, and the tangible benefits given to employees to reward employees who come forward with information.  This is no easy feat.

lifebloodA company which is equivocal about its commitment to compliance and encouraging vertical reporting of information will suffer negative consequences.  CCOs have to establish lines of communication and trust within the organization.  The CCO is the ambassador of ethical conduct and has to promote the message of compliance, encouraging open lines of communication.

In the end, a CCO’s compliance program will rise or fall based on its culture – is it compliance or is it repression of information?  The CCO’s role and standing within the organization sets an important tone, one of commitment to compliance or one of equivocation.

Vertical information sharing is essential – if the information flows up in an organization, the CCO has the opportunity to act, monitor and fix a compliance program to make sure it is working effectively.  If the information does not flow up, the CCO will have little chance to address the day-to-day needs of compliance.

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.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

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