Organizations can combine the basic elements of compliance to prevent, manage, and control risks. This supports transparent, responsible conduct among employees, customers, and suppliers while addressing leaders' responsibilities and applicable guidance.
Compliance aims not only at meeting regulatory requirements but also at preventing legal consequences and building a culture of integrity and responsible management.
An effective compliance program has three central goals: prevention, detection, and correction.
Components of compliance
Written policies and a Code of Ethics
Written policies explain expectations and are often brought together in a Code of Ethics that covers people who work for or interact with the organization.
Compliance officer and oversight
The compliance officer should have sufficient seniority and independence. A useful practice is to report directly to the chief executive or board.
Compliance training
Education is essential to a strong culture of compliance and deserves sustained attention.
Training should address general compliance, fraud, discrimination, and abuse.
Reporting channel
A channel should allow people to report compliance concerns confidentially and, where appropriate, anonymously.
Organizations should explain that the channel exists, how it works, and why people should use it.
Monitoring, audits, and internal reports
Regular, thorough assessments should go beyond the most obvious risk areas. Interviews with key employees can reveal specific risks and new challenges.
Results should inform corrective actions and be shared with senior management and the board.
No retaliation or intimidation
People may stay silent if they fear losing their jobs after reporting a problem. Protection from retaliation and intimidation is therefore crucial.
The compliance officer should work with human resources to apply these protections consistently and encourage participation.
Investigations and solutions
Qualified people should investigate who was involved, what happened, when it occurred, and how it happened.
Investigations should also identify root causes and correct weaknesses in the system.
Disciplinary policies
Clear policies should cover illegal or unethical conduct and be applied consistently to employees, directors, and suppliers alike.
At EthicsGlobal we believe organizations need compliance programs and ethics hotlines to prevent, detect, and address problems effectively.