Josh Young

Evaluating the success of your corporate compliance program can be difficult. And far too many businesses simply determine the success of these efforts by monitoring their anonymous reporting tools. However, simply tracking these reports isn’t enough.

The Association of Certified Fraud Examiners (ACFE) reported as part of a global fraud study that roughly 39 percent of incidents tracked in 2016 were uncovered by reporting mechanisms — meaning that nearly two-thirds were not. And that number drops by roughly 10 percentage points for companies with fewer than 100 employees.

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While reporting is an invaluable tool, any true evaluation of your company’s compliance efforts will need to review the entire program.

As part of a resource guide developed to help measure the effectiveness of compliance programs, the Office of Inspector General at the U.S. Department of Health and Human Services contends that a sufficiently comprehensive compliance program will include seven elements:

  1. Standards, policies, and procedures
  2. Compliance program administration
  3. Screening and evaluation of employees, vendors and other agents
  4. Communication, education, and training on compliance issues
  5. Monitoring, auditing, and internal reporting systems
  6. Discipline for non-compliance
  7. Investigations and remedial measures

And the guide offers a number of metrics that can be used to track the success of each of these components.

Admittedly, the recommended metrics put forth by the guide are primarily targeted at healthcare organizations, but these general principles and directions can be readily adapted to almost every industry.

How Can Your Business Evaluate Your Current Compliance Program?

Analyze training

Ideally, your organization will already have a compliance training program in place, and you should test employees on their retained knowledge at the end of each educational session. Follow up a few months later to see if the important information was actually retained.

Similarly, evaluate misconduct reporting trends after a training campaign. Is there an increase or decrease in reported incidents after a session has concluded? These fluctuations could help identify the value of the program.

Conduct surveys

Alongside these training evaluations, your business should conduct annual surveys that capture relevant details surrounding your compliance programs. Ask questions surrounding ethics and organizational policy to gauge employee attitudes and get an honest view of your company’s existing culture.

Also, record employee responses regarding observed misconduct and compare these results against reporting histories. If employees are seeing significantly higher volumes of misconduct than they are reporting, your compliance program probably needs some work.

Pool information

Look to sources of data outside of your compliance and ethics department to evaluate overall success. For example, coordinate with your human resources team to ask questions surrounding ethics and compliance during hiring procedures, exit interviews, and performance evaluations.

Further, by tracking the number of sick days taken, incidents of theft, worker compensation complaints, and accidents, your business can gather additional insight into the overall company culture and more easily track trends.

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Talk to managers

According to the ACFE survey mentioned earlier, whistleblowers are most likely to report fraud to their direct superiors or company executives — roughly 38 percent of cases. Not only do these business leaders need to be prepared on how to respond to an issue, but they can often provide direct insight into the corporate culture.

Have these managers actively document any issues or concerns raised to them. With formal procedures in place, your organization can gather consistent details across incidents and time frames, offering further visibility into trends.

Get outside help

With federal, state, and local regulations being routinely passed and amended, and with enforcement agencies regularly issuing policy and procedural updates, maintaining compliance can feel like hitting a moving target.

Given the struggle of staying abreast with all of these constant changes, consider working with outside vendors or experts to help manage and design a flexible compliance program that can accommodate these shifting expectations.

The Next Step

There are a number of factors that need to be considered when evaluating the value and success of your existing compliance program. By taking a holistic approach and regularly assessing the attitudes and knowledge of your workforce, your business can better determine the overall health of your corporate culture and identify actions that have a positive impact on compliance.