The Elements You Need to Build a Culture of Compliance
Building a culture of compliance in your organization is crucial to minimizing risks. Compliance issues can not only divert significant time and resources away from your core mission, but they can also cause you to go out of business altogether.
But before you can claim a culture of compliance, there are five things you need:
- Commitment from Leadership
- Compliance Ownership
- A Code of Conduct
- A Compliance Plan and Controls
- Training and Communication
1. Commitment from Leadership
It is impossible to build a culture of compliance without strong commitment from the leadership of your company or organization whether it is the CEO, Executive Director, or a Board of Directors, the leadership must commit to compliance as an essential cornerstone or it simply will not work.
Once the decision is made to commit, that commitment must be evidenced by unwavering example-setting and reinforcement. If a high-level person in your organization is responsible for a compliance issue that arises, and that high-level person is not disciplined, your employees will get the impression that compliance is not a serious concern. You must ensure compliance at all levels and hold your employees and leaders accountable for their actions. And you must reinforce this commitment at every chance you can when speaking to employees and other leaders in your company.
2. Compliance Ownership
Whether you name a Chief Compliance Officer or delegate compliance to a particular individual in addition to other duties, establishing a clear owner for compliance issues is crucial. Your employees must know where to go if they see or fear an issue or have questions, and someone in your organization must have clear responsibility for following up on those concerns. Moreover, someone must be responsible for monitoring, updating, and communicating your compliance procedures at all times.
3. Code of Conduct
Your organization needs a written set of rules and principles that will guide your employees’ behavior with each other, with competitors, with partners, with customers and with the outside world. You must be able to point to your code of conduct as the embodiment of your company’s values and ethics, and your employees must be able to consult the code of conduct when in doubt. The code of conduct then serves as the centerpiece of your culture of compliance by ensuring that your expectations are in writing for all of your employees to see and follow.
4. Compliance Plan and Controls
In addition to a code of conduct, you should have a compliance plan, which should establish detailed procedures for monitoring compliance and point to clear owners for each procedure. Accountability is key to an effective compliance plan.
5. Training and Communication
The final element to building a culture of compliance is making sure that everyone in your organization-and even your vendors and partners-are aware of your commitment, understand the rules, and know where to go if they have a concern.
Communicating your commitment is important, but training is vital-your employees must know what they can and cannot do and must also be tasked with being your eyes and ears for their fellow employees, your vendors and your partners. Your employees must know that they can raise a compliance issue without fear of retaliation and that you will take their concerns seriously.
Conclusion
If compliance has not been communicated within your organization, it’s impossible for employees to comprehend how applicable laws, regulations and company policies apply to their day-to-day job responsibilities.
And with regulators cracking down on non-compliance-levying heavy fines and in some cases jail time for individuals-your business can’t afford to skip compliance training.