As companies navigate an ever-increasing complex business environment, compliance is no longer a good-to-do factor; it is a must-do. Not only is compliance just representative of good governance and ethics, it ultimately has an impact in the long run. No company wishes to drain billions in expensive lawsuits.
Compliance is not just about the monetary aspects, it is about creating a desirable workplace by adopting the best practices and baselines. If compliance has to become a way of organizational life, it is important to integrate it with the business objectives. Here’s why organizations should invest so much time, effort and money in compliance.
The business case for compliance
Compliance efforts demand significant resources. Hence, organizational leaders must be absolutely clear about the objectives of embarking on the journey.
- New business opportunities: Projects like government contracts or public-private partnerships require companies to have followed compliance rules, without which it is not possible to get into a contract.
- Better company brand: Compliance is an indication of quality standards and ethical working practices. This can help attract customers.
- Talent magnet: Employees (especially millennials) nowadays care about the company culture and brand that they work for. Being compliant and ethical is a great way to attract the best of the talent.
- Resource and cost savings: Simply put, non-compliance can give rise to a host of issues like penalties, missed claims, lawsuits and even lost time and reputation due to injuries or deaths. These are a major cost to the company and can also bring the company down.
It is amply clear that compliance is desirable. But often companies are not even aware of the compliance requirements, leave alone work towards achieving them. This is the gap that needs to be bridged to truly incorporate compliance and achieve the above outcomes.
How to embark on a compliance journey
Leaders must start with building compliance awareness amongst their employees, but this alone is not enough. “Compliance is more than following a paper-checklist, it is about ingraining a behavioral and attitudinal change towards ethics and governance. Only then can compliance become a sustainable process in the organization.” Following is a recommended approach to kickstart the compliance initiative in the organization.
- Start with leadership buy-in: Compliance processes involve major change, and no change is possible without adequate leadership commitment. This includes outlining the risk management objectives, processes and desired outcomes because they form the base of compliance excellence.
- Identify the risks: Senior leaders must identify and prioritize the risks to the organization, with a disproportionate attention to the high-risk issues. Behavioral change must be targeted at the points of highest positive impact.
- Align the risks to business goals: The compliance strategy must go hand-in-hand with the business strategy. This means that leaders need to incorporate compliance objectives into the strategic business plan. Some of the objectives can revolve around revenue growth, expense reduction, risk reduction and employee safety, with varied weightages. Make sure the objectives are realistic and achievable because it is important to keep people motivated on the compliance journey.
- Train and engage: Compliance demands change in behavior at every level – right from senior leadership to the ground level. Hence, training is important to make this change happen for real. Business and HR should come together to design and deploy relevant training programs on the appropriate subjects, in the right way. Moreover, learnings from the training should be embedded in the daily routine of employees and practiced on the job. An important aspect while designing training is to build an “emotional appeal and connect” through training content.
For example, a well-designed safety training program will make employees feel that they are cared for, which will, in turn, create a sense of belongingness and pride in the company. Employees must feel that they are investing their time in a fruitful endeavor with useful takeaways and one that they are proud being a part of.
- Develop metrics: - Meaningful metrics for the compliance program should be established at the onset. Metrics should be aligned with the key company goals that the compliance program has been designed to support. The compliance program should be implemented in such a way that data for the metrics can be easily collected and reported. This calls for an efficient and intuitive compliance reporting system, one that is easy to use and base future actions upon.
People need to be continuously motivated to stick to the compliance path. Leaders must take efforts to share success stories and appreciate compliance achievements. HR and PR can play a role here, communicating the compliance milestones to outside world, thereby building a positive brand. For example, HR can design a Rewards and Recognition Program, or a contest which drives compliance. Get creative in celebrating successes and, at the same time have mechanisms to outline pockets of improvement. These elements will ensure that all concerned stakeholders and in fact all people are motivated to achieve high compliance excellence. The compliance journey is not a sprint; it is a long-standing relay marathon in which every person does his or her bit in adding to great compliance.
This article is curated from a whitepaper on this topic.