Check out last week’s posts on Compliance Culture, in case you missed or want to revisit them.
Many thanks for reading!
In an increasingly inter-connected and digital society, challenges to privacy and reputation are frequent. Even before social media put everyone at constant pressure to “overshare,” when people’s very personal details were not always a quick Google search away, privacy was still under threat. A person’s visibility and public representations are often judged and demanded for credibility and honesty evaluations performed by employers, potential partners, members of the community, and even complete strangers. Giving up privacy in favor of radical openness may be the way some reality stars have attained their celebrity, but for many people this feels invasive and like a violation of security.
In a broader sense, people’s individual privacy settings in terms of what they wish to share or disclose, how, and to whom, have a direct bearing on reputation. Cultural practices around privacy and information sharing can give rise to serious reputational risk that impacts individuals and communities and frays the social fabric in which transparency is desirable or even possible. These norms and ethical expectations are intensified in the digital age, where an individual’s personal information can never truly be deleted or taken back once it is made public.
GDPR – the General Data Protection Regulation – is intended to establish a stronger, unified system of protection of personal data for individuals and businesses within the European Union. GDPR was adopted directly by the European Parliament, the Council of the European Union, and the European Commission on April 27, 2016. Following a two-year transition period, GDPR will become directly binding and enforceable as of May 25, 2018.
GDPR is an improvement upon the 1995 Data Protection Directive, intended to enhance control by individuals over their own personal data and accountability for organizations in how they collect, handle, and maintain it. The Data Protection Directive was implemented by individual law in each of the EU nations and therefore created a patchwork of standards and practices varying between the member states. GDPR therefore is intended to simplify and integrate requirements in a more cohesive and competent supervisory model.
Corporate culture is most effective when it is part of the organization’s origins. Compliance by force can never be fully effective at risk control or influencing corporate values. While organizations can and should always be looking to improve their standards and frameworks for compliance risk management, the most successful compliance programs will be rooted in the native culture of the company. For this reason thinking of compliance fundamentals from the beginning (such as described in this post or this post about start-ups, this post about founder-led business, or this post about small businesses) wherever possible gives the greatest chance of imbedding an authentic and engaging culture of compliance.
The above is especially true from a corporate social responsibility (CSR) perspective. CSR values adopted purely and un-authentically, just for competitive advantage or public relations attention, will not be convincing to all consumers or stakeholders, and therefore will not be sustainable. Companies that have some relation to or interest in political issues or social justice should recognize this early and often and incorporate activism and engagement into their company mission statements and values.
Stephen R. Covey’s famed self-development insights can also be applied to compliance and ethics. The acclaimed author of the worldwide best seller The 7 Habits of Highly Effective People has provided motivation to managers, students, and progressive people for many years. Covey’s work was far more than just a self-help guide or a management how-to. With his emphasis on character ethic as well as values and principles, Covey created an interesting body of work that can be broadly used in crafting the business mission statements he endorses so heartily, from a compliance and ethics and perspective.
This post takes an in-depth look at each one of Covey’s 7 Habits to explore the applicability of each one for the work and goals of compliance professionals. All seven of the habits encourage conduct that is positive and productive for compliance risk awareness. Inner success, sustainable and functional interdependence, and strategic, purpose-driven vision are just some examples of the compliance culture qualities that the 7 Habits consistently endorse. Trustworthiness, credibility, and honesty are the cornerstones of individual relationships and organizational identities in Covey’s system.
Simply put, ethical decision-making is about making choices from a basis of integrity. Decisions are not pure or in a vacuum. People make choices in an often very complicated landscape of conflicting interests, isolation from consequences, stubborn habits and heuristics, and narrow cognitive frameworks.
Therefore effective ethical decision making has two components: first, the intention and second, the action. The intention requires an individual determination to do the right thing for the right reason at the right time. The action, on the other hand, requires commitment at both the individual and the collective/organizational level to maintain and support the intention. This process happens amid a complicated context of incentives for, and obstacles to, both individual ethics and corporate culture of compliance.
Be sure to visit Compliance Culture this week for posts on these topics.
Don’t miss it!
Check out last week’s posts on Compliance Culture, in case you missed or want to revisit them.
Many thanks for reading!
Groundhog Day is a classic comedy film from 1993. The movie centers around Bill Murray’s character Phil Connors, who is a weatherman on-location in Punxsutawney, Pennsylvania covering the annual Groundhog Day event there. The town’s festivities around the ritual of the groundhog coming out of his hole to check whether or not he sees his shadow are a huge media event and popular celebration which Connors, who is generally obnoxious and condescending, finds ridiculous. On February 2, Connors has an unpleasant and miserable day in which he is annoyed by everyone around him, acts out, and totally fails to charm his producer Rita Hanson, played by Andie McDowell, with whom he is in unrequited love. The next day he wakes up and is alarmed and confused to find that it is not a new day and February 3, but rather it is February 2 again and the prior day is repeating exactly as it happened before.
Connors winds up trapped in a time loop in which only he is lucid of it. He experiences February 2 over and over, with his memory and knowledge retained but otherwise no evidence in the world or other people that the day has happened before and will happen again. Connors goes through a complicated process of reckoning with this reality and ultimately makes an ambition of getting Hanson, who hates him, to fall in love with him.
This is the seventh in a series of seven posts about regulatory compliance priorities and enforcement trends. The first post was about the Commodity Futures Trading Commission (CFTC). The second post was about the Federal Trade Commission (FTC). The third post was about the Securities & Exchange Commission (SEC). The fourth post was about the Food & Drug Administration (FDA). The fifth post was about the U.S. Department of Agriculture (USDA). Last week’s post was about the Environmental Protection Agency (EPA). Finally, today’s post, the final one, will be about the Federal Communications Commission (FCC).
The U.S. Federal Communications Commission (FCC) is the US regulator charged with supervising interstate communications via the mediums of radio, television, wire, satellite, and cable. The FCC was created by the Communications Act of 1934 to replace the Federal Radio commission, a predecessor regulator with jurisdiction over radio only, and incorporate the telecommunications regulation responsibilities of the Interstate Commerce Commission, in recognition of the advancement of communication and broadcasting technologies.
The modern FCC has six main operating objectives: providing affordable access to broadband internet; maintaining a competitive framework for communications services providers; ensuring the efficiency and efficacy of spectrum (radio); setting media regulations which encourage digitalisation, competition, and diversity; cooperating with public safety and homeland security crisis communications; and contributing to ongoing modernization of the FCC itself as innovation evolves. Within these objectives, the FCC sets media policy pertaining to broadcast, cable, and satellite television and broadcast radio regarding content, indecency, ownership, and transition to digital. Interstate telecommunications services including landed telephone, internet, mobile services, and a variety of other radio and broadcasting networks and databases are also within the FCC’s purview.
Certainly the biggest story in recent years involving the FCC has been the changes to the Obama-era Net Neutrality rule. For a basic but thorough explanation of Net Neutrality, recent changes to its regulatory handling, and the various interests at stake, check out this QuickTake from Bloomberg.
Post-Net Neutrality rule-making, the FCC will likely seek a new alignment on a broad variety of issues impacting its wide mandate. As demonstrated by the diverse range of priority topics below, the FCC will have a full regulatory agenda for 2018, and rehabilitation of its public image and its processes through which it engages with consumers, lawmakers, and stakeholders, will be a top priority for the agency. As discussed in this article, the challenges are inherent in rebounding from 2017 and setting a fresh set of priorities for 2018.
As this series on regulatory enforcement and compliance interests has shown, whatever the current rhetoric on the proper reach of supervision may be, these agencies will always have a huge impact on life and business. Whether this is through regulatory expansion, delay and inaction, or rollback, the choices made on regulatory agendas have sweeping influence on topics as diverse as investor protection, public health and safety, the environment, consumer rights, and all areas of the securities and financial markets.