Post By: John Grgurich, Senior Writer & Editor at StarCompliance
Compliance’s world is about to change, again, as people return to the office in fits and starts and the hybrid work model potentially becomes dominant. Here’s how to position your firm for whatever’s coming next
Beginning sooner than later, then, compliance teams may be facing a hybrid workplace: with employees working onsite for part of the week and offsite for another. And the tidy lines and processes which got compliance through the last year—ad hoc and rough as they initially were, but by now practiced and running smoothly—will need to be adjusted. Today we offer five general strategies compliance and senior leadership can use to position the firm to keep risk at a minimum no matter what the workplace looks like moving forward.
- Keep Bad Behavior Outside of The Firm
Sounds obvious, right? But there’s a not-so-obvious angle here that’s worth exploring. Here’s how Damon Batten, Practice Lead at the financial services regulatory consultancy Bovill explains it: “Sometimes I think the job of compliance is not so much to completely stop bad behavior as it is to push it outside the organization. If you have a determined bad actor in your midst, he’ll find some way to circumvent your controls. Better that bad actor carries out his illicit activities outside of work—wherever that work is taking place—on his own time and off of official work devices. How do you accomplish this? One underrated way is to cultivate a positive culture of compliance. If a bad actor finds himself in a firm with such a culture—where there’s a palpable feeling that people always follow the rules—he may be dissuaded at least from engaging in bad behavior at work, which goes a long way toward decreasing firm exposure.”
- Keep Bad Actors from Getting into The Firm
This seems like another all-too-obvious piece of advice. Naturally, you want to weed out bad actors in the first place, as you’re vetting recruits in the interview process. But this is another moment when having a positive culture of compliance already in place can make a real difference in mitigating firm risk. Batten: “A positive culture keeps bad behavior away from the firm, in part, by keeping bad actors away in the first place. Here’s how. The interview process is the first point of contact between the firm and a potential new employee. With a positive culture of compliance in place—and by extension with you mentally operating from the same place by default—you’re more likely to identify bad actors in the interview process. You’re simply more likely to know right away that a person isn’t a good fit. Also, in a more general sense, the extent to which you prioritize employees’ ability to make money versus their ability to perform their role in a compliant manner will influence who you hire. It all comes back to culture, and good culture isn’t something you can create overnight.”
- Train on The Basics, and Then Train Some More
“Training is cheap: a lot cheaper than tech. I’ll back anyone on the need for additional investment in technology, but don’t forget about people, and training them.” So offers Michael Renetzky, Partner at the law firm Locke Lord LLP. No matter where your people end up working, employees are going to remain common entry points for bad actors. Employees need to be trained to recognize what attempts to gain access to firm information look like, and they need to be trained how to react. And the spend associated with addressing the human element is not nearly as significant as that associated with addressing the technology element. At the end of the day, a lot of risk mitigation still centers around human behavior. Training can be also be looked at as another way to create a positive culture of compliance at your firm.
- Stay Creative in How You Stay Connected
A year ago, when the realities of the pandemic set in, and the CEOs of the finance world and beyond had to swallow hard and accept the fact that people simply couldn’t come into the office and work, virtual meetings quickly became the norm. And they’ve done a better job of keeping employees connected than initially expected, for all the griping about Zoom fatigue. Still, companies worry about keeping their employee population connected, and by extension their culture intact, for good reason. With people coming back to the office even part time, some of this imbalance will be organically redressed, but if the hybrid model is in your firm’s future it’s still worth getting creative about ways to maximize employee connection.
“When people work remotely, you have to make sure they don’t start to think of themselves as contractors,” one of our virtual spring forum panelists offered on the subject. “If firms do go the hybrid route, it will be important to get creative and stay creative about keeping in touch. It shouldn’t just be about emails and Teams calls. It could be talks from the CEO, more regular town hall meetings, and even multimedia and multichannel presentations. Anything to keep employees feeling they’re part of the firm’s cultural weave. Offsite conferences appear to be on their way back. This is resoundingly good news. Big events will be critical in bringing together those who lived in different states or different countries pre-COVID—as they always did—but also now for those employees who took advantage of remote-work options to move far away from firm headquarters.”
“In the end, those of us in compliance will have to make as many plans as we can, but also be prepared to once again think on our feet, work up ad hoc solutions, and then work even harder at refining them into longer-term processes. It’s unlikely the working world of finance will ever return to what it was, but if we made it through the past year with our firms, work relationships, and mental states relatively intact, I’m confident we can succeed at whatever is thrown at us next.”