1. How is the role of compliance professionals shifting?
For years, compliance has centered around addressing the bad in an organization, like fraud, bribery and general employee “rule-breaking,” and addressing it only after the matter. Inevitably, this turned compliance professionals into the “bad news guys” and tasked them with enforcing regulations that keep employees within their company’s stated boundaries. The industry unfortunately has relied heavily on a checklist approach to enforce these standards, where compliance is measured by merely seeing that a set of basic requirements are marked complete in order help avoid major risks. The static, disjointed spreadsheets used to manage these processes make it impossible to analyze and act on the data behind these risks to more effectively get ahead of the problems before they begin bubbling up. Additionally, there’s been little focus on how to actively promote the good within a company, like values and ethics, to proactively prevent the bad from even originating.
Finally, we’re starting to see the compliance industry place more of an emphasis on driving values-driven businesses - the modern day’s thriving company - to foster engaged, high-performing workplaces. This is actually a huge new perspective on a very tired, outdated industry. Compliance has been very resistant to change, but needs to in a world where "soft/fuzzy" things like culture and values actually map directly to "hard/bad" things like compliance. This shift is giving way to a new paradigm for the compliance industry as a whole: the values-compliance continuum.
Compliance professionals are now transitioning from the “bad news guys” to strategic executives charged with getting in front of risk, managing compliance faster and with more insight, and truly creating an overall ethical, thriving corporate culture.
2. How can compliance help companies get under the skin of their ‘ethical footprint?’
Over the past decade, the compliance profession has only grown more complicated, but the software that exists for it today is “Enterprise 1.0” in the worst ways: complicated, difficult to use, slow to deploy, and not built for the modern executives’ needs. Some of the best innovation the space has seen in years is still riddled, static documents, spreadsheets and email.
Now, compliance professionals are finally starting to become empowered with a “2.0” way to engage, train and track employees around not just policies and regulations, but core company values and ethics. Consider what Box did for document management and what Workday did for human capital management. We’re started to see compliance undergo this same transformation, which is essentially about delivering on the promise of the cloud, social collaboration and mobile to analyze compliance activities and a company’s ethical makeup faster and with more insight than ever before.
When compliance matters do arise, the power of cloud connectivity offers new, innovative ways for management, getting issues to the right people at the right time, fostering collaboration around cases and corporate culture activities, and enabling access to all employee training and compliance resources at anytime and anywhere -- whether it’s on a desktop, iPad or mobile phone. Finally, the data behind all of this activity holds valuable insight and transparency into a company’s ethical footprint -- for better or worse. Unlocking and reporting against this data should be easy and available to any HR executive about to head into the boardroom.
3. With the shift in role/perception of compliance professionals, to what extent is/has the perception of HR within the organisation changing/changed?
HR and compliance are deeply intertwined, since it’s the people within an organization that hold the potential for the a company’s greatest triumphs and risks. Since HR is responsible for creating the best team -- from screening, hiring, handling complaints, and disseminating policy and employee training programs -- they are now more than ever an essential resource in understanding and improving the ethical culture of a company and identifying risk areas. In turn, the new values-compliance continuum works in tandem with HR’s efforts by transforming company ethics and values from mere wall hangings to tangible, living subject matter that employees can actively engage around.
Ultimately, both compliance and HR focus on the importance of people, not policies. The two departments will only become more closely aligned, since employee behavior can be a first-line indication that there might be deeper compliance issues, and since company culture is becoming inherent to compliance.
4. How do the traditional waters of compliance – risk-analysis, incident reporting etc – link through to employee engagement?
It’s becoming more and more clear that traditional compliance activities like risk-analysis and incident reporting are directly tied to things like employee engagement and the systematic alignment of employee behavior and company values. If we can work toward fostering company values to create thriving corporate cultures, businesses will see the benefits of more engaged, high-performing employees, and by result risk will be very low. By bringing values into the compliance continuum, we’re able to fortify employment engagement, culture and ethics to not just promote the good within an organization, but proactively get ahead of the bad to manage compliance in a more holistic way that supports the modern day thriving business.
5. Is there a danger that if compliance ‘leads the way’ that HR policies will become risk-averse, stifling innovation, engagement and productivity?
This could be a potential outcome, depending on the level of collaboration between compliance and HR, and whether a compliance program places too heavy an emphasis on solely addressing risk, using fear-inducing tactics to keep employees within company boundaries.
That said, it could be just the opposite with close collaboration between HR and compliance, and with a compliance solution that takes a more holistic approach to an organization’s overall ethical makeup and compliance health. Employee buy-in is needed around compliance goals and obligations, and if implemented correctly, the policies and training will explain not just the “what” of the rules, but the “why.” Employees should be able to easily see the reasons behind policies and how these reasons align with a company’s overarching obligations, goals and values. Helping employees understand how their individual efforts fit into this larger picture, and how they support an organization’s goals, can foster both greater compliance and greater employee productivity and engagement.
6. To what extent do compliance teams have responsibility for whistleblowing policy/reporting of unethical behaviour and what should organisations be doing to enable a culture of protecting and encouraging whistleblowing?
This is a very hotly discussed topic among HR departments, since companies want to create an environment where employees feel fully comfortable coming forward with important information pertaining to risk and misconduct. But the challenge here is that this involved reporting process makes employees feel closely tied to a particular issue and a certain (and at times unwanted) personal responsibility comes with whistleblowing.
Now that the compliance industry is finally awakening to the power of cloud computing, mobility and data-driven insight, employees can submit information from anywhere at anytime, and do so confidentially if they choose. This enables employees to act in real-time by submitting issues as they seem them arise and avoid the involved, personal experience of reporting activity to HR. Additionally, the power of an integrated, intelligent platform can structure disparate data to detect whether a problem is recurring, specific to a certain location, department or individual, or part of a larger pattern associated with employee training programs or regulatory governance. This new approach exposes the gaps and correlations between employee activities and compliance and in doing so unveils critical data about the effectiveness of certain training seminars and policies.
Overall, these new processes technologies are making whistleblowing a smoother process for the employee and charging HR with valuable insight about how problems originate, what they’re tied to, and how they can potentially be addressed.
7. What are the key metrics that will define ‘ethical business’ in five to ten years when we’ve moved on from carbon reporting and recycling?
The key measurements for assessing ethical business are evolving to reflect the demand for meaning and personal fulfillment in one’s work. Given the increasing complexities of the workplace, now more than ever, employees are actively seeking work that goes beyond just making ends meet financially and instead offers a profound connection to a greater mission to work toward. New metrics are coming into play that concentrate on individual and collective connection to business values. We’re already seeing this manifest itself through the increased importance of employee retention rates and the increased importance of employee engagement with company culture. These kinds of measurements will only become more significant in the years to come, and eventually become on par with more straightforward rewards like income.
If you consider values-driven businesses like Whole Foods, Lululemon and Google, they all represent organizations that are leading the charge with this new way to measure ethical business. Each has strong guiding philosophies that are prevalent throughout the entire company and employees are directly tied to the cause. This gives way to a company that practices its values and ethics from the inside out. In the next five to ten years, many more businesses will begin assessing their ethical makeup through this framework.