It is essential in all industries and job functions that employees act with integrity and in compliance with applicable rules and regulations, and this must be supported with adequate training. However, a common challenge for compliance professionals concerns how to successfully and sustainably convince senior business management to invest in and support compliance training as a priority. Regulatory changes and enforcement actions, and the necessity for ethical decision-making in the regular course of business, show us that compliance awareness should be valued. Amidst the pressures of commercial activities, changing marketplaces and political environments, and time-sensitive daily necessities, though, training on compliance topics may not always seem urgent. However, there are important incentives which can be emphasized to business partners to encourage their buy-in on this critical training.
- Compliance training fosters prized employee engagement and encourages transparency, which is necessary to mitigate reputational risk and enable whistle-blowers. Knowledge is power, and training empowers employees to use their understanding of the regulations and policies to show good conduct and to understand the importance of acting in compliance with regulations and policies, as well as the impact of unethical behaviour and the necessity of identifying and escalating misconduct where it occurs.
- Once emboldened with knowledge by training, employees can take compliance topics forward into discussions and practical applications. Clarity and ease of discussion are important drivers of employee integrity. Simply put, individuals must first understand what they could do in order to follow a policy or regulation, before they can be asked to make a good choice in support of this. Libertarian paternalism suggests governance structures could affect behavior positively by influencing options available to deciders without disrespecting freedom of choice. Adequate training informs this approach, so that individuals have clarity and the ability to talk, ask questions, and work through scenarios in order to develop their own mental muscles on compliance topics on an everyday basis.
- Employee awareness of compliance risk stimulates business management to act and react, creating a robust tone at the top. Senior management can be encouraged to contribute to a culture of compliance by a version of the “warm-glow” effect. Their buy-in is supported by an egoistic motivation derived from acting as role models to the employees they lead – a positive feeling that comes from being admired and adulated as an example. Employees who are actively informed about the values of compliance, ethical decision-making, and integrity will look for accountability and responsiveness from their leaders. When employees expect and emphasize this, management teams are enabled to reward good conduct and sanction misconduct, taking visible and precedent-setting action to recognize both.
- The subject matter of compliance training is mostly accessible to employees at all levels. While some topics are more technical or demand a more academic approach to regulations and practices, the vast majority of compliance topics – to name a few, conflicts of interest, insider trading, information handling, money laundering and sanctions, anti-bribery, code of ethics – are, at least on an introductory level, practical and interesting to discuss without any prerequisite knowledge from the employees. In the post-2008 financial crisis world, many people have a good layperson’s understanding of these general concepts from the news. They even often have a desire to increase awareness and discuss these topics, but they need familiarity first. Basic sessions can give employees a first look, so that they are prepared to discuss with their colleagues and managers, while subsequent advanced sessions can develop comfort and expertise.
- Targeted training on compliance topics helps to normalize expectations of risk ownership in an increasingly complicated regulatory and legal environment. Many employees may be open to challenging their ideas about their business practices that originated in the less comprehensive regulatory and legal landscape of the past, but they must be convinced to make compliance a daily consideration in their work. If they are not fluently aware of compliance concepts, then they may feel overwhelmed. This gives them the impression that either they are expected to be compliance officers themselves in addition to their regular tasks or that interaction with Compliance can only be a “tick the box” exercise. Neither outcome is desirable, yet both can be overcome by raising awareness and therefore promoting relevance.
The overall impression from the foregoing is that visibility with business partners is crucial for the compliance advisory function to succeed. All compliance professionals should seek to build relationships and interact on these compelling yet challenging topics in order to make them personally meaningful to business partners.