How to ensure buy-in

Mini-series by Lucy Blake and Kate West, Linklaters LLP. The authors would like to thank James Walker of Compass Group plc for his assistance with the drafting of this article.

Even with a compliance programme in place, businesses will see little to no impact without ensuring buy-in from within the organisation.  It’s worth considering:

  • What specifically are you looking for people to do?
  • How can you get into people’s mindsets to understand how to incentivise them to it?
  • How can you can create an environment in which it’s natural and easy for people to do it?

It is also helpful to consider how to set out the need for the action you’re looking for people to take. From a positive standpoint, a genuine values-based ethical culture is good for business – it promotes long term success, strengthens the brand, drives efficiencies in decision making and provides a social benefit (an investment which can in turn result in, more sustainable operations and future profitability). The positives can be married with making people aware of the potentially damaging consequences of compliance failures. In particular, as well as reputational damage, serious and criminal compliance failures can also lead to debarment from public procurement contracts and, increasingly, huge financial penalties.

Regulators increasingly look to culture as the barometer for understanding an organisation. Many regulators, such as the Financial Reporting Council in the UK, are now requiring corporates actively to discuss culture as a boardroom topic with annual reporting requirements. In the UK, the board must now demonstrate they are providing oversight of their company’s culture, including finding mechanisms to “hear” the voice of employees. Similarly in the US, the recent DOJ guidance on evaluation of corporate compliance includes expectations that companies are measuring their culture of ethics and compliance, including by way of surveys or mechanisms for “speaking up” where someone feels something is not right and wants to raise a concern.

Takeaway

The saying “culture eats compliance for breakfast” reflects the understanding that even the most well-designed programmes and robust controls can’t overcome a toxic culture.  The most successful businesses are those that articulate clear core values and ethical standards and who work hard to embed these within their culture, so that everyone from the senior management to operational personnel are committed to good behaviour.  From avoiding reputational damage and financial penalties to securing greater profitability, employee engagement and investment prospects, having a genuine culture of compliance is a win-win for companies.