By Sorcha Diver
From Compliance & Ethics Professional, a publication for SCCE members
Compliance has come a long way as a profession since it was just a tick-box part of one or two people’s job, something that happened in a back office. Today it is rightly seen as having strategic importance and is typically managed by a group of dedicated professionals with a specific skill set. The profession has certainly gained prominence on the corporate stage.
Despite this positive trajectory, compliance professionals today continue to be faced with a common problem: Managers, and indeed employees generally, too often consider compliance and ethics (C&E) to be the Compliance department’s problem, something they don’t need to think about. Ethical considerations can be seen as dull or a “nice to have.” Employees may complete the annual training and then file away compliance in their minds for another year. Compliance and ethics professionals accept this as their lot, even as they push harder with the next training round, aiming to develop something more eye-catching and engaging for next year’s roll out.
Changing perceptions
So should we accept this apathy as inevitable, or should we aim for a different perception for compliance and a much more inclusive and cooperative future for the profession as a result? How can compliance professionals drive the integration of compliance and ethical considerations into everyday work life, so that managers in particular begin to fully understand and believe that C&E awareness are key parts of their skill set in the same way as other managerial skills, such as communications influencing, and negotiation? It is only with this acceptance by middle managers that valuing compliance and a strong ethical culture is not only in the interest of the company, but is in their own professional interest, that we will see a big leap forward in terms of how the profession is viewed and in the power of compliance in industries across the world.
The problem is that managers underestimate compliance skills as something they need to have in their manager toolkit. Although they can see the value in working on their influencing skills or attending a session on how to improve how they communicate, they fail to recognize that building compliance skills will also help give them a competitive edge. Ensuring managers understand this is the solution to getting their attention and getting them to wake up to the value of C&E.
When we talk about adding C&E skills to manager toolkits, what are we really asking managers to keep top of mind? Clearly this will vary, depending on the industry, but it should include an automatic thought process whereby managers consider privacy, security, regulatory, and legal aspects as a matter of course. It isn’t an expectation that managers will have all the compliance answers; rather, it is a question of having many more minds truly focusing on the compliance-related issues to ensure maximum benefit.
Toolkit training: Structure
To achieve this transformation in how middle managers view and value compliance, targeted training for managers is needed:
· All generic management training should have a specific compliance/ethics module, particularly training focused on new managers who may be most hesitant in dealing with ethical issues or compliance questions.
· This training should not be online; it should be in person and should cover how to deal with ethical issues and ensure compliance. Perhaps more importantly, it should bring home to managers that ethical situations occur every day, and they are already dealing with them.
· Rather than focusing only on regulatory adherence or how to follow a code of conduct, in this targeted training the emphasis should be on critical thinking skills. Ideally, experienced managers should act as ambassadors, participating in the training and highlighting their experiences of championing compliance and valuing strong ethics.
Toolkit training: Content
Content should be built around the value of C&E. We should tell managers about statistics and studies that show how a manager’s behavior in terms of ethics can impact their team’s behavior. Share information about how a strong ethical culture helps build effective compliance risk management. Make it explicit that these skills are essential for them as professionals and for their future careers.
There are some surprisingly simple practical measures that managers can implement in order to add compliance and ethics to their everyday toolkit:
· Understanding that their employees will mirror their behavior, managers should consider how they are communicating to their teams when discussing anything related to ethical misconduct or other ethical issues.
· Managers should consider their body language, tone, facial and physical expressions, and gestures. For example, shrugging, eye rolling, and specific facial and hand gestures will convey a certain message that tells their employees how important they view the latest company policy to be, or whether they take seriously the expressed concerns about health and safety issues. This will require some self-analysis from managers, but once they realize the tangible values, they will be motivated to truly change how they convey non-verbal messages.
· Make time for ethical matters and discuss them openly, so that managers send a clear message that they value a strong ethical culture. Managers should resist pushing such issues to the side in favour of “getting the work done.”
· Choose language carefully. Like the non-verbal considerations above, the verbal is also critical. Discussing compliance and, particularly, ethical matters with seriousness will signal to an employee that they should view these matters as important.
· Managers should share examples of when they’ve questioned unethical decisions. This highlights to their employees that these are issues they should feel free to discuss; it increases the value of such issues.
Highlighting value
Why should managers do this? Busy managers will need concrete reasons for giving some of their in-demand attention to C&E. We must highlight to managers the value of ethical behavior for productivity (a boost of up to 12% if managers demonstrate ethical behavior), recruitment, and retention.[1],[2] Once managers realize that their everyday actions in relation to C&E impact how their employees act, and essentially how much they can get done, they will be much more likely to take a close interest that goes well beyond annual compliance training.
It is key to reach a point where managers, when making a decision or mulling an opportunity, will automatically weigh ethics and compliance considerations alongside other critical factors, because they know it makes sense and brings tangible value. Ultimately this is a key way to reduce risk and ensure compliance by design is possible. In the sister discipline of Information Security, the trend is very much in the direction of “cyber security is everyone’s business”’[3] because of a recognition that we’ll never be finished with security; and in the same way, we’ll never be finished with compliance.
Conclusion
Done correctly, this new focus in middle management training enables a dynamic, self-perpetuating, iterative process where the manager realizes C&E are something they need to be constantly aware of. They will see the benefits for themselves directly and for their team, as well as decreased risk and a stronger overall ethical environment for the firm, and thereby continue their good practice. This is in effect an evolution of tone at the top, and the results will include a trickle-down effect to employees and reduced risk across the enterprise.
In addition, this will enable compliance professionals to move on to some of those items on our To-Do lists we’ve been wanting to get to. With managers, and therefore employees, if we’re doing a better job of minding the store, we can focus on achieving excellent results in other areas. An evolution in C&E is possible, which will potentially reap big benefits for the profession as a whole.
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