In the past, a compliance professional’s role was somewhat limited to ensuring the organization complied with the laws and regulations that govern it.
Today, that role has expanded exponentially. Compliance executives are now expected to create and nurture strong organizational cultures, as well as protect their organizations from financial, reputational and legal risk.
There are no bright lines for where the job begins and ends—and risks are evolving at increasing velocity. This is particularly the case when it comes to controversial developments in the public sphere, from taking (or not taking) a stance on social issues to the incursion of politics in the workplace.
This all adds up to a brave new world for compliance officers; one that presents plenty of organizational and professional challenges—but also a wealth of opportunities.
Looking Outside In: Rethinking What it Means to be an “Ethical Organization”
Keeping up with today’s GRC landscape requires rethinking what it means to be an ethical organization—one that is just as committed to staying in compliance with a myriad of complex regulations as it is to building and maintaining an ethical culture. This includes considering approaches that may be new to many compliance professionals, such as:
- Completing broader, organization-wide ethics, compliance and reputational assessments to identify risks that may have been missed in the past, when a narrower view of E&C was the norm. Consider whether new or emerging social or geopolitical changes are introducing new types of unaddressed risk to your industry or business.
- Engaging with other senior executives about evolving compliance-related risks that are strategic to business operations. One good example is the intersection of compliance and cyber security. Many IT executives still think cyber security is solely their responsibility. It’s up to the compliance officer as a strategic business partner to show them the critical role E&C can play in mitigating risks related to human error.
- Getting a deeper understanding of how organizational culture, mission and values relate to the broader cultural and political landscape. Will your employees increasingly expect your company to take a stance on controversial social or political issues? If so, how will you respond?
- Suggesting and participating in the creation of crisis response plans (often in conjunction with legal and PR teams). Maintaining a compliance team that can respond nimbly to issues that arise with training, awareness-building and policy changes not only helps better protect an organization, but makes the compliance function a valued business partner within the organization. For example, if shareholder activists mount a Twitter campaign critical of your overseas labor practices, the compliance team will be ready to respond.
- Going beyond the letter of the law to understand how regulators and law-enforcement officials expect an organization to respond and behave when controversial issues arise.
An Opportunity to Step up in New and Exciting Ways
An expanded E&C function is a significant shift for some organizations—and a significant shift in mindset for some compliance officers.
In our experience working with and advising clients, we find that those who are maturing their compliance programs start by securing top-down commitment to a robust E&C approach. This includes ensuring the necessary resources—mainly related to budgets and systems—to meet stated goals, which in turn allow them to move “at the speed of risk” as programs are implemented (or expanded) across the organization.
Further, the most effective ethics and compliance officers are those with a deep understanding of their organization’s business imperatives—and who are strategic thinkers and trusted advisors to their organization’s leaders.
Demonstrating Bottom Line Value
Taking steps toward building a robust ethical culture pays many dividends, including:
- According to the Ethisphere Institute, publicly traded entities included in the group’s 2016 list of the World’s Most Ethical Companies outperformed the S&P 500 by an average of 3.3% last year.
- Allows organizations to focus on running the business rather than fighting legal battles—and avoiding bad publicity that is both draining and damaging.
- Creates a cascade of long-term benefits: greater employee engagement and enthusiasm, higher productivity, and greater customer affinity and loyalty among them.
Organizations willing to envision a broader scope for the compliance function will be helping develop more ethical, transparent, resilient and successful businesses that will thrive for years to come. That’s a brave new—and more ethical—world we can all be proud to help create.