Tips for conducting compliance investigations

The task of a compliance officer is not to “set it and forget it.” Apart from planning and advising on risk management strategies, and monitoring business implementation of the attendant policies and procedures, compliance professionals must remain vigilant about the potential for violations. Internal compliance violations can run the causal gamut – they could be because of internal controls failures, unwitting omissions due to lack of awareness, or outright misconduct and malfeasance.

Compliance officers should approach an investigation into a compliance exception thoughtfully and with careful preparation. If the planning for or administration of the investigation is flawed from the beginning then the investigation results will not be reliable. In many fields, such as scientific research, planning investigation tactics and strategy is a discipline all of its own, demanding special expertise in statistical methodology standards.

For purposes of the internal investigations of compliance officers, a common-sense approach, focused on fairness and transparency, can take the place of technical expertise in conducting informal internal investigations that will still generate reliable and meaningful results. Compliance professionals should keep the following fundamental themes in mind when designing an investigation effort:

  • Reject foregone conclusions: Compliance investigation inquiries can be sensitive and intimidating. Most people do not want to do the wrong thing and will be worried or even frightened by the possibility that they have broken rules or regulations. They will fear that their jobs are at risk or worry about the reputation of the company due to the misconduct. Therefore, take the investigation seriously, even if its scope is limited or it’s routine. Don’t decide the outcome before the information is gathered. Investigations should be motivated by intellectual curiosity, in the case of annual or planned investigations, or, in the case of ad-hoc or event-driven investigations, an objective desire to protect and promote integrity, which knows no master.
  • Work carefully: Sloppiness and poor preparation will doom an investigation from the beginning. Compliance professionals should work carefully and check their work as they go along. Simple errors such as directing queries to the wrong recipients or asking for information that is out of scope of the investigation can cause a terrible impression with stakeholders and disrupt the efforts of the investigation.   Communication is key, and information communicated to all parties throughout the investigation should be accurate, clear, and appropriate at all times.
  • Give support, not interference: Compliance often collaborates with other functions such as HR, Legal, and Risk; this collaboration should be encouraged, not complicated or avoided. In planning investigation strategy, work together with partners and stakeholders whenever possible (legal privilege and confidentiality, where it applies, must of course always be respected). Sharing information helps to make conclusions stronger and to avoid inefficient duplication of efforts.
  • Follow through with enforcement when misconduct is evidenced: Investigations are toothless when the results are just put on a shelf and forgotten. Enforcement action must come next, and in every outcome, there is appropriate follow-up. In instances where misconduct is discovered, whether it is from negligence or intentional wrongdoing, disciplinary action should be taken with concrete consequences. Substantive structural changes should be made also the risk control framework to seek to prevent or identify earlier the non-compliant behaviour whenever possible. Punishing the wrongdoer is not enough; addressing the root causes of the wrong-doing has to happen too.
  • Feed-forward when no malpractice is discovered: Not every investigation will be an open and shut case where there are good people and bad people and everything wraps up neatly. It may be that the investigation yields no evidence that anything material happened. It’s also possible that the investigation would show some unrelated deficiencies, such as in communication strategies or employee awareness. Finally, the investigation could produce inadvertent lessons for the compliance officer him or herself to take back to a future risk assessment and planning session. Whatever these conclusions are, don’t discard them just because they don’t lead to a punitive action. Feed them forward into risk controls improvements and future compliance program efforts.

Compliance officers who consider the above suggestions in planning their own investigation strategy will be focused on obtaining neutral, credible information. They will communicate clearly and engage stakeholders supportively. Enforcement actions stemming from the investigation efforts will be pro-active and productive. With these approaches, compliance officers can establish credibility and effectiveness in conducting internal investigations.

Last week on Compliance Culture

Check out last week’s posts on Compliance Culture, in case you missed or want to revisit them.

Many thanks for reading!

Selected TED/TEDx talks on artificial intelligence

Artificial intelligence (AI) describes the cognitive function of machines through technology such as algorithms or other machine learning mechanisms. The very definition of AI places technological devices with this “artificial” knowledge in comparison to and opposition with humans possessing “natural” knowledge. This discipline within technology has been around for more than sixty years and in recent years, is gaining consistent enough momentum that many of its once outlandish ambitions – such as self-driving cars, for example – are current or imminent reality. As computing power advances exponentially and uses for and types of data are ever-growing, AI is becoming ubiquitous in the news of the newest and emerging technological innovations.

As AI sustains and draws on its now considerable basis of achievements to make even more advancements in research and development across many business sectors, ethical and existential dilemmas related to it become more prevalent as well. Returning to that initial dichotomy between artificial or machine intelligence and natural or human intelligence, the design ethics and morality of bestowing human-like thinking ability on devices and networks raise many philosophical questions. Certain uses of AI, such as for autonomous weapons, could even pose safety risks to humans if not developed and directed thoughtfully.

These questions can go on and on; practical ethics represents the attempt to navigate the broad social context of the workplace by reconciling professional rules with moral expectations and norms. This, again, is highly pertinent to a corporate compliance program, which seeks to encourage an business culture that respects legality, approaches business competitively yet thoughtfully, and also sets standards for employee and organizational integrity. It is imperative for compliance professionals to understand practical ethics and use dilemma sessions or open discussions with the businesses they advise in order to encourage a common comfort level with this sort of thinking throughout their organization.

The below TED/TEDx talks emphasize the connection between AI and human life, commonly invoking questions about bioethics, practical ethics, and morality.

  • Artificial intelligence: dream or nightmare? (Stefan Wess) – Stefan Wess, a computer scientist and entrepreneur, provides a helpful primer on the history and current state of artificial intelligence in the contemporary movement of machine education. Big Data, the Internet of Things, machine learning, speech recognition – all these technologies and AI-related topics are already part of daily life. But as this continues to develop, how will organizations and individuals interact with the technology? How should it best be controlled and is it even possible to do so? The many risk implications of AI must be considered as more advanced creations become stronger and closer to reality every day.

 

 

  • Can we build AI without losing control over it? (Sam Harris) – Neuroscientist and philosopher Sam Harris is well-known for his commentaries on the interaction of science, morality, and society. Advanced AI is no longer just theoretical stuff of science fiction and the very distant future. Superintelligent AI – completely autonomous, superhuman machines, devices, and networks – is very close to reality. Technologists, the organizations in which they work, and the communities for which they create must all be conscientious about the development of these technologies and the assessment of the risks they could pose. Contending with the potential problems that stem from creating this very advanced AI needs to be done now, in anticipation of the technology, not later – when it may no longer be possible to control what has been designed and brought to “life.”   Planning, careful control frameworks, and regulatory supervision that balances openly encouraging innovation with soberly considering safety and risk consequences are all necessary to conscientiously embark upon these amazing technological endeavors.

 

 

  • What happens when our computers get smarter than we are? (Nick Bostrom) – In the same vein as the previous talk, one of the consequences of extremely “smart” artificial intelligence is that machine learning could be just as smart as a human being’s knowledge – and then, of course, eventually overtake humans in intelligence. This is alarming because it suggests the potential that humans could introduce their own subservience or obsolescence via machines created to make machines smarter. Again, all participants in developing this technology, including the consumers to whom it is ultimately directed, need to consider their intentions in bestowing machines with thought and balance the various risks carefully. With the ability for independent thought may also come the capacity for judgment. Humans must make an effort to ensure the values of these smart machines are consistent with those of humanity, in order to safeguard the relevance and survival of human knowledge itself for the future.

 

 

  • The wonderful and terrifying implications of computers that can learn (Jeremy Howard) – The concept of deep learning enables humans to teach computers how to learn. Through this technique, computers can transform into vast stores of self-generating knowledge. Many people will likely be very surprised to learn how far along this technology is, empowering machines with abilities and knowledge that some might think is still within the realm of fantasy. Productivity gains in application of machine learning have the potential to be enormous as computers can be trained to invent, identify, and diagnose. Computers can learn through algorithms and their own compounding teaching to do so many tasks that will free humans to test the limits of current inventions and to extend human problem-solving far beyond where it already reaches. This is certain to change the face of human employment – already bots and androids are being used for assisting tasks in diverse fields from human resources recruiting to nursing patient care.   Again, the extension of these technologies must be carefully cultivated in order to neutralize the existential threats to human society and life that may be posed by unchecked autonomy of machines and artificial learning. The time to do this is now, as soon as possible – not once the machines already have these advanced capabilities with all the attendant risks.

 

 

  • What will future jobs look like? (Andrew McAfee) – Picking up on the theme of the changing nature of human employment as machines get smarter, Andrew McAfee draws on his academic and intellectual background as an economist to unpack what the impact on the labor market might be. The fear, of course, is that extremely human-like androids will take over the human workforce with their advanced machine intelligence, making humans mostly irrelevant and out of work. The more interesting discussion, however, is not whether androids will take away work from humans but how they may change the kinds of jobs that humans do. Considering and preparing for this reality, and educating both humans and machines accordingly, is imperative to do now.

 

 

Check back here in the future for continuing commentary on AI and its impact on human life and society, including technology and the ethics of knowledge acquisition, as well as more insights on specific AI innovations such as self-driving cars and machine learning.

Round-up on compliance of aging and death

Many of the contemporary challenges to the meaning of human life and the responsibility of organizations, individuals, regulators, and even governments to contend with them on a legal or regulatory level come from technology. Indeed, bioethics and design ethics are rich with ethical dilemmas caused by advancements of sophisticated technologies such as artificial intelligence and its many applications. However, there is one philosophical area that is in tension with societal existential constructs and is as old as life itself – aging and death.

The ethical dilemmas stemming from the legal and moral responsibilities humans have to themselves and each other as the end of life approaches are contentious and among the most difficult possible. These dilemmas go to the core of society’s moral ideas about the value of life, the extension of human rights throughout physical or mental incapacity due to age, and the treatment of patients and their bodies through and beyond death.

Legal guardians, funeral homes, hospitals, and other individuals and organizations working in and making profits from business related to aging and dying – encompassing legitimate activities as well as illicit ones – all have various duties to their clients and are subject to societal and legal expectations and norms. However, inspection and enforcement efforts are often uneven and struggle to keep pace with the challenges posed by abusive practices or organizational misconduct. Threats to the rights of individuals and the dignity and proper treatment – or at least clear and honest disclosures – that are expected by patients and their families, must be the focus of future regulatory scrutiny and improvement.

  • Overreaching paternalism in guardianship of senior citizens is a highly disturbing trend which has been enforced by the courts in some jurisdictions. Legal guardians pay themselves from their wards’ estates; in some cases they have hundreds or even thousands of clients and force out family members or friends so that they can exert their control and get paid for it. Of course, this is a necessary system for the care of vulnerable senior citizens who need help administering their affairs. However, it is also ripe for misuse by opportunistic individuals, to the great detriment of the seniors they take on as wards and their loved ones. The financial and social abuses that can occur in these cases are frightening and appalling. Legal guidelines and supervisory scrutiny of these guardians should be standardized across jurisdictions to avoid undue harm to any population and to balance the commercial caretaking aspects of the activity with the rights and dignity of the individuals concerned:  How the elderly lose their rights 
  • Funeral home regulation and inspection is currently a patchwork system at best. Gross abuses and lack of internal controls have been the subject of a number of recent investigatory reports. Employee misconduct or insufficient internal policies and procedures at an operation like a funeral home has obviously devastating potential to cause harm to families of departed individuals at a vulnerable and painful time in their lives. Following the loss of a loved one the thought that the personnel of the funeral home trusted with their body might store the remains improperly or misuse their organs and parts is a concept that is hard to even conceive. However, due to insufficient supervision and inconsistent regulatory and investigative practices, these terrible scenarios play out all too often. A coherent and cohesive regulatory framework with the strength to punish misconduct and enforce expectations of operating standards must be implemented:  Gruesome Discoveries at Funeral Homes Put Spotlight on Spotty Regulations
  • On a related note, the dark reality of the organ trade has been the subject of a number of recent investigatory reports as well. Far from just urban legends about crimes that can take place in far-off lands, body brokers are very real and operating in the United States. While many of them do conduct legitimate business for scientific or medical purposes, others trade illicitly or take advantage of individuals who unknowingly give their body parts upon death or those of their loved ones to be later sold for profit by brokers. Fraud and misrepresentation in this industry violates the dying wishes of individuals or the difficult decisions made by families. The ease with which these illicit transactions are conducted is shocking, with human limbs or organs being bought and sold like spare car parts by some individuals. Like funeral homes, an overarching regulatory system needs to be put in place to monitor and inspect these businesses and implement enforcement actions when necessary:  The Body Trade
  • Turning away from illicit or abusive activities to technological advancements that touch upon aging and death, the reach of artificial intelligence has begun to stretch into this area as well. Robots and robotic devices are no longer the figment of the imagination of a distant future. Many organizations are beginning to utilize them in rudimentary form for a variety of assistant-level activities and are trying to develop the AI technology to use it even more in the future. This extends to patient care as well; hospitals and nursing homes are now exploring using robots to assist nurses in treating patients. Machine learning may eventually be able to automate many aspects of basic care, removing human error and relieving non-robotic nurses to focus on more complex or individually-tailored care. This could be a great efficiency for hospital staffing in the future, but it remains to be seen how non-human interaction in the patient care arena will impact the aging experience. Compassion and humility are often of great mental importance when contending with the forces of aging and illness. A mix of human and robotic care of patients will need to be carefully devised to ensure that these needs are met: Hospitals Utilize Artificial Intelligence to Treat Patients
  • Life extension has been a romantic subject of philosophical and scientific desire for millennia. For as long as people have been alive, they have tried to figure out ways to prolong or prevent dying, sometimes delving deeply into the mysterious and esoteric. Current quests in this area are focused on high-tech solutions. Silicon Valley has turned its most sophisticated efforts toward life extension in seeking to “solve for death.” At the very least, these attempts may derive a technology that greatly impacts aging or pushes human life expectancies far beyond the current normal range. Within a generation this may the force of great societal change that will redefine the needs of aging populations that live for longer and continue the quest to avoid death completely: Seeking eternal life, Silicon Valley is solving for death

As demonstrated by the foregoing stories, improper practices and abuses of power, as well as technological advancements, pose risks to the nature of aging and death as it is currently defined within society. Supervisory frameworks must be developed and strengthened to protect the most vulnerable of individuals and ensure that they and their families are not treated unjustly. Risk assessments and coherent, holistic regulatory guidance should be in place to ensure that these protections are upheld.

Profiles of ethical leadership in sports coaching: Gregg Popovich

This is the fifth and final post in a month-long series profiling acclaimed sports coaches for their ethical leadership abilities. John Wooden, famed UCLA basketball coach, and his Pyramid of Success were the subject of the first post. The second post was about Johan Cruyff, world-famous Dutch footballer and international club manager, and the ethical leadership lessons of his 14 Rules. The third profile discussed Jim Valvano and his views about leadership and success as expressed in lines from his famous 1993 ESPY Awards speech. Last week’s post focused on Vince Lombardi, the NFL Hall of Fame coach, and values for ethical leaders from his famous motivational speeches.

Finally, today’s post will be about Gregg Popovich, an NBA coach who heads up the San Antonio Spurs and is well-known for his progressive and pro-active values, which often manifest in very public and political statements.

Before becoming an NBA coach, Gregg Popovich attended the United States Air Force Academy where he played basketball and majored in Soviet Studies. He served in the Air Force for five years before returning to the Academy to coach basketball there, followed by a stint as head coach at Division III Pomona-Pitzer and then assistant coach jobs in the NBA for the San Antonio Spurs and Golden State Warriors, before returning to take a general manager job with the Spurs in 1994.

Popovich is widely considered one of the most accomplished coaches in NBA history. He has been the coach of the San Antonio Spurs since 1996, making him the longest tenured active coach in not only the NBA but in all US major sports leagues. The competitive successes of the San Antonio Spurs under his stewardship are many – 20 consecutive winning seasons, five NBA championships, and more than 1,000 games won.

However, Popovich’s legacy as a winning basketball coach may be matched by his legacy as an outspoken and consistent leader on social justice issues – both in society as a whole and on the direct scale among his players. Popovich consistently uses his very visible platform to speak about inclusion, engagement, and accountability.

  • This 2007 profile of Popovich from Canada’s National Post hints at the values Popovich brings to his overall coaching vision. The profile notes that Popovich’s media profile was, at that time, lower than some other great coaches because he was not interested in self-promotion, nor did he have a singular “vision” for the team that was well-suited for branding and publicity purposes. Instead, he focused on building “strong, complicated” relationships with his players and emphasizing worldly knowledge and overall excellence alongside basketball fundamentals. This profile is especially interesting for the quote at its end, which at that time was posted in the hallway by the Spurs locker room, translated into the various languages the players on the team spoke: “When nothing seems to help, I go look at a stonecutter hammering away at his rock perhaps a hundred times without as much as a crack showing in it. Yet at the hundred-andfirst blow it will split in two and I know it was not that blow that did it but all that had gone before.” This view of success can only be espoused by a leader who sees the values and efforts of the organization as inseparable from those of the individual. This is a powerful and indeed empowering perspective on management as an activity and skill which serves the collective of the organization as well as each individual within it:  Popovich is a man of mystery
  • This 2013 round-up on Popovich centers on his interesting and complex personality and background, intended to fascinate basketball and sports fans. In most cases, these traits and experiences translate directly to his ethical leadership qualities as well, and the root is in Popovich’s personalized and compassionate approach to coaching individuals rather than just constructing offenses, defences, and plays in a vacuum. When he was general manager of the Spurs and the head coach wasn’t getting the job done, Popovich stepped up and put himself on the line, eventually hiring himself as head coach. He took tough decisions and made himself responsible for them, a behavior that embodies ethical leadership: An Ode to Gregg Popovich, the Most Interesting Man in the NBA
  • In 2014, Fortune included Popovich in its “The World’s 50 Greatest Leaders” feature. In this view, Popovich, portrayed as curmudgeonly and stoic, distinguishes his leadership by enabling his whole team, from the bench players to the superstars, to excel and achieve. His no-nonsense style focuses on character ethic, not personality ethic, which is the central value for promoting and sustaining individual integrity to then scale across the organization. Popovich’s leadership is special in this view because it is so relationship-focused, giving his players incentive to seek individual inner success, not just to please a coach or beat an opponent in a one-off, unsustainable fashion: Another victory for ‘Pop.’ Another show of leadership
  • Business Insider ran a 2016 piece on Popovich which again centered on his relationship-focused, individual-valuing coaching philosophy. His perspectives on rebounding from failure, organizational governance, and player development all fit within the broad strokes of ethical leadership. In particular, Popovich emphasizes that motivating players and resolving conflict is best accomplished through honesty and personal accountability. These is fundamental perspective for encouraging organizational and individual (employee, player, or otherwise) integrity. Again, character ethic is the most important, and this enables open communication and feed-forward development and problem-solving:  Gregg Popovich has a brilliant philosophy on handling players, and it exemplifies the Spurs’ unprecedented run of success
  • From 2017, this ESPN piece focuses on Popovich’s political engagement and public opposition to what he sees as immoral political behavior. However, the rationale for why Popovich feels so strongly about this and indeed why he feels that he has an ethical imperative to speak out loudly about it is very illustrative of his leadership views. The article shares an anecdote about a time that Popovich began a high-stakes film session by sharing his knowledge on a historical topic of personal importance to one of his players. Popovich creates an environment of inclusion on his team by making what is different between them, important and meaningful to all of them, by translating these lessons into leadership messages for all. This empathetic approach to leadership is an ultimate expression of integrity and engagement, two imperative ethical qualities in management. For the Spurs, recruiting based on diversity and then using that diversity as motivation leads to both market competition as well as organizational cohesion:  Why President Trump ignites Gregg Popovich

Hopefully this series of posts about sports coaches as ethical leaders has been entertaining and informative, lending a new perspective to management values in a different venue than the traditional corporate compliance environment. The concepts of inner success, character ethic, personal accountability, and purpose-driven life and work are all commonly endorsed by these ethical leaders as they guide their teams, which are major organizations in and of themselves, to competitive achievements with meaningful, sustainable motivations behind them.

Design ethics of addictive technology

As social media platforms, the internet of things, and other online networks advance in sophistication and prevalence, the line between engagement and addiction becomes ever thinner. Features which are designed to make browsing the internet or using connected devices more comfortable, intuitive, and pleasurable are also vulnerable to misuse and abuse which can have highly negative impact on people’s daily routines and lives.

Indeed, the stereotypes of people too engrossed in their phones or tablets to even notice the people around them are widespread and real. So much of social interaction has been carried over into online communities and takes place on social media or in internet comment sections and forums. The positive possibilities of this kind of access to information and collaboration are boundless. Connecting across continents and sharing all kinds of information and ideas is powerful for learning, cooperation, and creativity. Making these systems better and more efficient for users to engage with only further empowers these uses. Designers, engineers, and technologists have taken the positive responses from users and implemented that feedback in coming up with new features and improvements with the aim of making the user interface and experience better.

Whether it’s making screens balanced with vivid images that are easy on the eyes or implementing machine-learning based algorithms that fill users’ feeds with the most interesting and entertaining information tailored for them, the original aim of these innovations is to make the platform or device more interesting to use and therefore to encourage the user to spend more time on it. This has obvious commercial appeal to the companies that create these networks and devices, their advertisers, and their other partners who are all competing to attract people’s attention and gain valuable impressions or content views. Time is money, and a faithful user is a lucrative one.

However, those eyeballs content providers and marketers wish to attract are, of course, inside the heads of people and therefore the ever-ramping effort to engage those people runs into risky territory where interest or active participation edges into dependency and addiction. There are countless studies which have shown health problems stemming from overuse of phones, tablets, computers, and other devices, including eye fatigue, migraines, sleep deprivation, and other problems related to vision, concentration, or stress caused by overindulgence in looking at screens. This is not to mention the destructive social impact that over-immersion in devices can have, isolating people from their families and communities as well interrupting work, diminishing traditional communication skills, and exposing people to online abuse and other unsafe or inappropriate content that could cause harm.

In fact, some of the individuals who have had the loudest voices against the dark side of the advancements of personal technology are in fact the designers and engineers who had a hand in actually creating the most addictive features. For example, the engineer who was involved in creating the Facebook “Like” button and the designer who worked on the “pull to refresh” mechanism first used by Twitter are among a growing group of technologists who have started to question and reject the role that immersive technologies play in their lives. These individuals understand the good intentions that were behind the original creation of these technologies, with the hope to make them more useful or fun for users, but they also see the downsides. Coined “refuseniks,” these early adopters have purposefully made efforts to diminish or balance the presence of technology in their lives. As many of these addictive behaviors center around the use of smartphones and applications on them, many of these people who designed these features and now speak out against them turn off notifications, uninstall particularly time-wasting applications, and even distance themselves physically from their phones by following strict personal rules about usage or cutting off access after certain times or in specific places.

The question remains – pioneers of these features may have matured within their own careers and lives enough to realize that their earlier intentions have destructive potential they don’t want to indulge personally. But how will companies creating products and services in this space balance this as public attention begins to more commonly acknowledge the problematic nature of these features? Being a refusenik cannot be the answer for everyone, as these devices and platforms do bring great value to their users and the world as a whole, despite the negative effect they can frequently also have. Organizations working in this space can take advantage of corporate social responsibility values to balance their innovation of new features with the expectations of how consumers can use them, for good or bad.

On an individual level, it is very helpful to take personal responsibility to acknowledge and understand how these platforms and technologies are designed to make people engaged and how that can turn to addiction. Being conscious of these features or tendencies in their use is key. People should push themselves to understand why and how they use these technologies before adopting and engaging in them. If they feel prone to misuse of it, then understanding the cause of it and exposure to it will help to mitigate its effects.

For an interesting perspective on high-tech designers and technologists who have rejected the technologies they sometimes played pivotal roles in creating, check out this article from The Guardian.

How to make voluntary engagement with compliance values meaningful

A pure rules-based approach to compliance is direct and clear-cut, but by design lacks emotional or personal engagement. Following rules of all kinds – legal, community-based, household; practical, austere, illogical – is a social norm most humans are taught from their earliest memories. Despite this, many of them do not do it very well even with the best intentions, and still more never intend to attempt adherence.

To have any expectation that rules will be credible and inspire understanding and respect, there must be an authentic and compelling “why,” a purpose that people feels relates to them and calls for their commitment. Many laws are so deeply linked to societal expectations and taboos that the majority of people do not need to be persuaded to appreciate them – restrictions against pre-meditated murder, property theft, and abuse of animals for example. Those who remain unconvinced these acts should be prohibited and punished are not likely to view violating laws as something offensive or damaging either.

Sincere attempts to reach individuals who are antipathetic toward all rules, however few or rare they may actually be in society, with a rationale rooted in values are not likely to prevail. In general a values-based approach can be very powerful and evocative, but in order for it to hold personal appeal it must strike a difficult balance between universal relatability and individual accountability. All organizations should define their values and position their strategy and public branding within that set of principles, but this is delicate. If the values are too specific then they will be exclusionary rather than engaging, appealing only to a core group of true believers rather than attracting a wider audience. If the values are too broad, however, then they will be superficial and ring empty – again preventing individuals from attaching to them and being their standard bearers.

An especially effective tactic for bridging this gap is to make corporate values a living artifact which reflect the organization as it grows and changes along with business and society. In an ambitious and forward-looking organization, the profile and strategy will evolve and so should the outlook of what matters most in defining its purpose. Using a rules-based approach to provide both the floor and the roof for the terms of the corporate mission statement, values can fill the space between and invite everyone – employees, partners, stakeholders alike – inside.

There are many mechanisms through which corporate compliance programs can appeal to employees to make the connection between rules and values. Inspiring voluntary compliance, where employees feel aware of and responsible for the values of the compliance program and connect to them individually, adds weight to the mandatory compliance expected by the rules. Increasing the relatability of the requirements with principles behind them gives people incentive to sign on and go along with the compliance program. Compliance programs can aim to encourage ongoing employee adhesion to the organization’s values-based approach in the following ways, ranging from the lightest touch to the heaviest:

  • Nudges: Simply put, make it possible for employees to make ethical choices by expressing values that promote this and building decision-points into the processes they encounter in their working experiences which reflect those values. Business strategy should coincide with business values, and if it does not, then actions such as setting new standards client acceptance or exiting and reassessing product offerings or market participation are natural consequences of trying to bring the two together. In order for employees to make choices that reflect both individual and organizational integrity, the procedures and standards within which they work should facilitate and support this type of decision-making. Doing the right thing should always be accessible and indeed prompted.
  • Codes: While nudges make values implicit and leave the decision ultimately in the employee’s hands, in codes values are explicit and expectations for adherence to them are formalized. Codes can take a variety of formats, and in some industries regulatory requirements may dictate their scope and even content, but generally speaking, the more concise and accessible the better. Employees at all levels should be able to read, understand, and engage with the code, whether it dictates ethics, conduct, or both, and they should be able to retrieve, review, and ask questions about it whenever they want. A code document should be updated on an ad-hoc basis and reviewed regularly, and it should be seen as a living record of the specific values of the organization which underlie all other policies and procedures in place.
  • Attestations: Once a code is available, employees can be asked to attest to their compliance with it. This can take a very simple form, even just a one-liner of “I attest that I have been in compliance with the requirements set forth in the Code as of the below date.” This can be done once per year (or other regular period of choice) or on an ad-hoc basis. Asking an employee to attest to adherence prompts self-reflection and may also create a space for questions or dilemma discussions, which are important tools for ensuring awareness.
  • Warnings: Warnings may sound punitive, but in reality they can just be reminders. Unlike attestations, which look backwards and ask employees to self-assess based on their past behavior, warnings would accompany present choices or activities. For example, an expense claim form might include a statement on it reminding the submitter that the data on the form should be accurately and honestly reported, and that there are certain expenses which may not be reimbursable or permitted. Providing these warnings at the time the employee is going to take action that checks compliance values brings together all the previous methods – it provides a nudge, makes expectations explicit, and directly asks the employee to consider ethical obligations when making choices in the course of the task.
  • Oaths: Oaths take the most advanced step of ensuring that employees comply with the ethical and compliance expectations of their profession by asking that they voluntarily submit to discipline should they violate these. This submission is by taking an oath and signing it, typically with witnesses and even a level of formalization or ceremony in order to underscore the significance of the commitment and the seriousness of trespassing against it with future misconduct. A very interesting example of a professional oath is the Banker’s Oath in the Netherlands, which is intended to restore trust in the financial sector and banks specifically by requiring that every Dutch employee take an oath to comply with uniform ethical guidelines. To read more about the Banker’s Oath, visit the website of the Dutch independent organization Foundation for Banking Ethics Enforcement (FBEE).

The above methods for encouraging voluntary compliance can be employed by compliance professionals simply and powerfully in routine compliance communications and awareness initiatives. Reminding employees of values – the purpose – helps to heighten the credibility and appeal of rules – the requirement – and provide a mission perspective to their engagement in the compliance program.

Last week on Compliance Culture

Check out last week’s posts on Compliance Culture, in case you missed or want to revisit them.

Many thanks for reading!