Is Avoiding Bankruptcy Enough of a Compliance ROI for You?

nelson pratt

The Weinstein Co. was once the largest film studio of its kind. It received over 300 Oscar nominations and won more than 80 Academy Awards. And last week, this stalwart company, filed for bankruptcy. The reason - preventable actions by its leader. 

compliance programs give the large majority of good actors permission to be confident in their good actions.

Now, ethics and compliance programs aren’t designed to fix the unabashed bad actors of this world. This is unfortunate, but it’s a reality. Instead, compliance programs give the large majority of good actors permission to be confident in their good actions. Especially when those actions require speaking up against bad actors. 

Today we are seeing a flurry of empowered good actors raising their voices. From a social conscious perspective, it’s about time. From a business perspective, however, it’s really late.

This is what happens when an organization promotes silence as the solution to bad behavior. This may prove an effective temporary solution to one-off instances of bad behavior, but it is not sustainable and it’s not scalable. As people are quieted, the behavior their silence protects grows either more frequent, more intense or both. Frequency and intensity compounds, and what was once a single act that warranted the elimination of an individual from the company, now bankrupts the company.

3 Ways Compliance Programs Give Good Actors the Confidence They Need to Act

If you saw someone breaking into your neighbor’s house, you would feel confident – if not compelled – to pick up the phone and call the cops. That’s because you know that behavior is not allowed and it’s within your civic duty to alert the authorities to the wrongdoing. This is the type of confidence, permission and sense of duty compliance programs instill in their employees.

This compliance ecosystem provides the foundation good actors need to speak up and help companies achieve the full ROI of compliance.

Creating this type of self-protecting ecosystem falls within the basic components of an effective ethics and compliance program. These components include policies and procedures, compliance training and incident management. This compliance ecosystem provides the foundation good actors need to speak up and help companies achieve the full ROI of compliance. The result is an organization that protects its employees, and employees who protect their organization.

Define Expectations

Effective compliance programs clearly state the dos and don’ts of the organization (e.g., we don’t burglar). This is in the form of workplace policies. Company policies and procedures are the backbone of the organization. They are the basis for standards and expectations to which all employees have agreed.

Make Expectations Compelling

After workplace policies are in place, it is critical to bring those standards to life for employees. For instance, although people want to fulfill their civic duty, many do not know the difference between robbery, theft, larceny and burglary. But fortunately (or maybe unfortunately) we’ve heard enough stories to identify the nuances of wrongdoing inherent to all of them. The definitions of these forms of theft are equivalent to your company’s policies and procedures. These educational stories take the form of compliance training. Similar to a story about a robbery in your neighborhood, effective compliance training doesn’t just restate corporate expectations, it also compels those expectations to be met.

Define Steps for Action

Effective workplace policies and compliance training provide the information employees need for successful careers in the workplace. However, this doesn’t stop the unabashed bad actors mentioned above. To weed out bad actors before they harm the company, we need action from our employees. This requires the right reporting channels. Just as 911 strikes familiarity, your employee whistleblower hotline and all its various access points need to be top of mind and easily accessible. This allows for consistent and immediate action.

Along with knowledge of reporting channels, employees need to have confidence in those channels that something will be done. If we called 911 and nothing happened, we’d stop calling. But we see police cars and hear sirens frequently. We see the system in action regularly and are convinced our actions are part of the larger operation for safety.

In many ways, employees are the driving force behind our organizations. Effective compliance programs give employees the tools they need to be part of a self-sustaining culture that protects the organization. 

Sometimes it’s hard to see the dollar signs that compliance programs bring into the organization. But it’s not hard to see the reputational value that comes with a strong culture. That’s what gives you the confidence bad actors will be remediated or removed well before your company suffers the same fate as The Weinstein Co.

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