Compliance is a Team Sport

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Sadie SayyahBy Sadie Sayyah, Esq.

It is a well-known and perhaps well-worn adage that there’s no “i” in team. But the adage still applies when it comes to building and supporting an effective compliance program.

Whether an organization is vertically or horizontally organized, we tend to organize employees into departments, teams, pods, etc. with clearly defined roles and responsibilities. As such, we may mistakenly believe that “compliance” is the responsibility of a specific group or individual. However, in promoting an ethical business, we should encourage every employee to view himself or herself as part of the compliance team.

This begins with compliance policies which are well understood by every employee. This does not mean that a member of shipping/receiving needs to be intimately familiar with Sarbanes-Oxley reporting requirements. It does mean, however, that every employee should understand the business is committed to the highest ethical standards and there are clearly defined expectations and reporting requirements when ethical concerns arise.

It is equally important for employees to recognize compliance policies and procedures are not designed to replace good business judgment and common sense. No policy or procedure can anticipate all situations. Thus, “compliance” is not a static event; it is a process that evolves together with the laws that govern a business as well as the circumstances of each particular interaction.

Open door policies encourage every employee to feel part of the compliance team. This allows open communication between employees and management. Further, employees who would otherwise be reluctant to pursue matters with a direct supervisor or management are encouraged to discuss his or her thoughts, concerns, complaints, or problems with management.

A well-crafted and publicized “whistleblower” policy also provides employees with an avenue for raising or reporting ethical concerns. Such a policy encourages and enables employees and others to raise serious concerns internally so the business can address and correct inappropriate conduct and actions. Among other things, a whistleblower policy should (1) provide for a reporting system which includes anonymous report, (2) a mechanism for investigating all whistleblower reports by an independent investigator (businesses may choose to delegate such investigations to outside party such as legal counsel), (3) a strict no retaliation policy for whistleblowers, and (4) resolution of reports including the power to take corrective action.

Finally, ethical behavior must be consistently modelled by board members, officers and managers. This includes holding every employee to the same standards, providing directing reporting from the chief compliance officer to the board of directors, and requiring the same educational and reporting requirements for all employees.

In the end, encouraging all employees to be members of the compliance team builds a strong ethical cultural and demonstrates the business’s commitment to responsible corporate governance both to its employees and the community.

Sadie Sayyah is a lawyer and the Director of Compliance for Goldline, LLC, a leading national retailer of precious metals.

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