Compliance has to continuously improve – as companies innovate, so do critical foundation functions like compliance.
The forces of change on corporate governance and compliance were unleashed years ago. There is no way to put the genie back in the bottle – the wave is continuing to grow and so long as corporate misconduct continues, corporate compliance will continue to reinvent itself in new ways.
The days of paper policies, token gestures towards compliance, and half-hearted attempts to follow compliance requirements are gone. New ideas are brewing thanks to a compliance profession committed to innovation and compliance businesses developing new technologies to leverage compliance resources.
Corporate culture is the most cost-effective compliance control. Every corporate actor knows this fact. Unfortunately, for years, corporate actors convinced themselves that written policies and internal controls would do the trick. Everyone knows that such thinking was misguided.
Instilling a corporate culture in a company can have positive benefits, such as increased profitability and reduced rates of misconduct. Companies act through individuals, and influencing individual behaviors can be accomplished by surrounding individuals with a corporate culture. Individuals act in a context and a company culture is a definable, measurable, and tangible concept.
Attending to a company’s culture through the empowerment of the CCO in the corporate boardroom, the C-Suite, and the corporate governance structure is the most effective means to install and promote a corporate culture of ethics and compliance.
Of course, the success of a corporate culture depends on the board’s and the CEO’s commitment. Forward-thinking corporate leaders recognize that promoting a culture of ethics and compliance is profitable and beneficial to all relevant stakeholders, not just shareholders.
In response to ever-increasing demand to do more with limited resources, compliance businesses are bringing new and innovative technologies to companies to manage their ethics and compliance programs by leveraging limited resources. As the importance of compliance has grown, so too has the demand for new and innovative compliance products.
Compliance professionals have to weed through the various product claims, test the effectiveness of the new tools, and then make sure the product can be designed to promote the company’s ethics and compliance function. Growth in the industry has to move beyond third-party and supply chain risk management.
Compliance professionals need to demand more integrated products that cut across a variety of risks facing companies. Third-party risks are not limited to due diligence, but extend to a variety of topics, including AML, safety, environment, labor, cyber-security, export controls and sanctions, HIPAA, and other risks that arise in the business environment.
Businesses have to think outside the box and bring new solutions to the table. Compliance officers juggle and balance a number of issues that require integration – training, internal investigations, auditing and monitoring functions, and many other significant activities. The more such functions can be coordinated and integrated into a single technology, the better for CCOs.
Culture is an important function that needs to be monitored. Regular surveys and monitoring of corporate culture has to be a part of this new product mix. The sooner we jettison the old model of annual or bi-annual employee surveys, the better for everyone. A more consistent approach, focused on real risks and aiming at the specific culture factors, has to be developed. It is a real and significant challenge but one CCOs can meet.