31 Days to a More Effective Compliance Program

One of the biggest benefits of podcasting is that it allows a compliance function to connect with their audience on a more personal level. Unlike traditional forms of advertising, which often come across as impersonal and sales-driven, podcasts enable businesses to build a loyal following by offering valuable and engaging content. This can include interviews with industry experts, behind-the-scenes glimpses of the business, and informative discussions on relevant topics.

Now take these same concepts of audience engagement and apply them internally to an organization. What do you potentially have? A mechanism to engage your employees, to engender trust, and to improve your overall corporate culture. Do you think this is a crazy way to improve culture? Think again about all the advantages podcasting has in place already.

A major US consumer product company started a podcast and had corporate executives on it. Who were the biggest fans of the podcast? It turned out it was the company employees, many of whom had never met their corporate executives. This allowed the executives to be humanized in a way no number of town hall meetings or other similar corporate events could ever achieve.

Since you are only limited by your imagination in compliance, why not use some of that imagination to be creative in your compliance training and communications?

Three key takeaways:

1. Using podcast storytelling to tell longer, more involved stories about compliance.

2. You can use compliance department-branded podcasts to have ongoing communications about compliance.

3. A Daily Compliance News show will drive engagement.

For more information on Ethico and a free White Paper on top compliance issues in 2024, click here.

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As organizations transition to remote work and embrace cloud technologies, it is crucial to adapt compliance programs to ensure regulatory obligations are met. 

Companies are shifting away from traditional tools like Excel or SharePoint towards centralized systems that facilitate compliance monitoring. Compliance teams can no longer rely on face-to-face collaboration and need systems to manage communication, investigations, and case management. This shift towards virtual platforms for communication has also increased the need to capture and record voice data for compliance purposes.

Adapting compliance programs for remote work and cloud technologies is essential in the current business landscape. Compliance program visibility, capturing and recording communication data, leveraging cloud technologies, and embracing AI-driven compliance monitoring are key factors to consider. By balancing these factors and focusing on risk-based approaches, organizations can ensure they meet their regulatory obligations while enabling their compliance teams to focus on their core responsibilities. The future holds even more advancements in cloud technologies and AI, promising increased defensibility and improved compliance monitoring capabilities.

 Three key takeaways:

1. Companies are shifting away from traditional tools like Excel or SharePoint towards centralized systems that facilitate compliance monitoring.

2. You must focus on the explainability  and defensibility of your AI models.

3. By focusing on risk-based approaches, organizations can ensure they meet their regulatory obligations while enabling their compliance teams to focus on their core responsibilities.

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Welcome to a special podcast series on the Compliance Podcast Network, 31 Days to a More Effective Compliance Program. Over these 31 days of the series in January 2025, Tom will post a key part of a best practices compliance program daily. By the end of January, you will have enough information to create, design, or enhance a compliance program. Each podcast will be 6-8 minutes short, with three key takeaways you can implement at little or no cost to help update your compliance program. I hope you will join us each day in January for this exploration of best practices in compliance.

In today’s episode, we delve into the evolution and importance of employee compliance training, focusing on fostering a culture of compliance within organizations. We discuss key guidelines from the FCPA Resource Guide 2nd Edition and subsequent updates from the DOJ and SEC, emphasizing the necessity of effectively communicating and tailoring training programs to an organization’s specific audience. Critical aspects include the importance of training in local languages, assessing the risk profile of employees, and ensuring senior management’s participation. Furthermore, we explore the concept of ‘espresso shots’ or concise training segments to enhance learning and retention. Metrics such as increased hotline use and survey feedback are essential for evaluating the effectiveness of compliance programs.

Key highlights:

• Evolution of Compliance Training Standards
• Measuring Training Effectiveness
• Tailoring Training to Audience Needs

Resources:

Click here to receive a 20% discount on The Compliance Handbook, 5th edition, for listeners to this podcast.

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One of the key goals of any compliance program is to train employees in awareness and understanding of the FCPA, your specific company compliance program, and to create and foster a culture of compliance. While it seems axiomatic that compliance training is the mainstay of any best practices compliance program, the conversation around training has evolved over the years.

The importance of determining the effectiveness of your compliance program has been enshrined by the DOJ. The 2023 Update confirmed that the DOJ wants to see evidence of the effectiveness of your compliance program. This is something that many CCOs and compliance professionals still struggle to determine. Both the simple guidelines suggested herein and the more robust assessment and results provide you with a start to fulfilling the precepts set out by the DOJ, as you will eventually need to demonstrate the effectiveness of your compliance training going forward.

Three key takeaways:

1. How and why have you tailored your compliance training and how do you determine its effectiveness?

2. Try an “espresso” shot of training

3. Present your training in both local languages and a variety of media.

For more information on Ethico and a free White Paper on top compliance issues in 2024, click here.

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To address this challenge, AI-powered data cleansing capabilities have been developed. These capabilities sift through content and focus on relevant and risky information while minimizing false positives. By removing duplicative content, obvious junk, and non-human generated text, compliance teams can efficiently focus on the content that is potentially risky. This targeted approach significantly reduces false positives in the alerts generated by the system.

The Covid-19 brought changes that are still being felt today in the business world. Some changes were temporary, but some have become permanent and remote work is one of them. It is clearly here to stay. The change has underscored the importance of AI and data in compliance across various industries. The shift to remote work has resulted in an increased amount of data that compliance teams must proactively monitor. AI-powered data cleansing capabilities help sift through content and focus on relevant and risky information, while AI algorithms and machine learning models aid in risk detection. By leveraging AI and data, compliance teams can enhance their prevention, detection, and remediation efforts, ultimately promoting a culture of ethical behavior and ensuring compliance with data protection laws.

 Three key takeaways:

1. The pandemic changed the corporate world in many ways. One of the permanent ones was moving to remote work.
2. Remote work generates much more data because messaging apps and online communication tools require new and innovative compliance solutions.
3. AI and data-driven compliance around data generated from remote work can move a company from detection to prevention.

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What is a speak-up culture, and how does it improve the overall corporate culture? A speak-up culture is a work environment where open communication is encouraged, fostering trust and innovation. This culture is built on leadership that values listening and employee involvement in problem-solving. One of the key factors in fostering a speaking-up culture is protecting employees from retaliation. Anti-retaliation policies and procedures, training for middle managers, and a consistent, transparent process for investigating concerns are crucial to maintaining this culture. The fair process doctrine, which emphasizes transparency, consistency, and protection from retaliation, plays a significant role in building trust, encouraging engagement, and enhancing the overall organizational culture.

Empowered Employees. When employees feel empowered to contribute their ideas, it can lead to significant positive outcomes for the organization. However, fostering a speak-up culture goes beyond just listening. Retaliation should never be tolerated, and organizations must make it clear that it will not be accepted under any circumstances.

Role of Middle Managers. Middle managers play a vital role in fostering a speak-up culture. They need to be trained to listen, accept information, and report it to the appropriate channels.

Consistency and transparency. Consistency and transparency in the investigation process are also key components of a speak-up culture. Organizations must have a clear process in place for investigating concerns, and employees should be aware of this process.

Fostering a speak-up culture in the workplace is crucial for building trust, encouraging engagement, and enhancing the overall organizational culture. It requires leadership that values listening and employee involvement, as well as policies and procedures to protect employees from retaliation. Middle managers play a vital role in supporting employees and facilitating open communication. Consistency and transparency in the investigation process are essential for building trust and ensuring that employees feel comfortable bringing forward their concerns. By fostering a speak-up culture, organizations can create a culture where employees feel empowered to contribute their ideas and make a positive impact on the workplace.

 Three key takeaways:

1. Having a reporting system is important but listening is equally critical.

2. Employees must be protected from retaliation.

3. Fostering a speak-up culture can create a culture where employees feel empowered to contribute their ideas and make a positive impact on the workplace.

Do you want to improve your culture? How can you assess your culture and develop a strategy to improve it going forward? Check out the new tool, The Culture Audit For more information click here.

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Welcome to a special podcast series on the Compliance Podcast Network, 31 Days to a More Effective Compliance Program. Over these 31 days of the series in January 2025, Tom will post a key part of a best practices compliance program daily. By the end of January, you will have enough information to create, design, or enhance a compliance program. Each podcast will be short, at 6-8 minutes, and will include three key takeaways you can implement at little or no cost to help update your compliance program. I hope you will join us each day in January for this exploration of best practices in compliance.

In this episode, we look at the ongoing process of monitoring and improving company internal controls. Christina Ravelo starts by posing fundamental questions about the frequency of manual approvals and control overrides, emphasizing the importance of continuous evaluation and recalibration. This episode highlights the misperception among many compliance professionals and lawyers that controls are static and unchanging once implemented. Instead, internal controls should be dynamic, requiring regular reviews and updates based on collected data, such as the frequency of overrides. Proper documentation is crucial, and companies should engage in periodic self-reviews as part of their continuous monitoring efforts. Ravello also stresses the necessity of identifying issues and remedying them to prevent further complications. Today’s key takeaways include the idea that control overrides are not inherently problematic if appropriately managed, the dynamic nature of internal controls, and the importance of a comprehensive monitoring process incorporating feedback from every line of defense.

Key highlights:

• Understanding Control Overrides
• Continuous Monitoring and Improvement
• Assessing and Updating Controls

Resources:

Click here to receive a 20% discount on The Compliance Handbook, 5th edition, for listeners to this podcast.

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What happens when controls are continually overridden? Does that necessarily mean that companies are engaging in activities that violate the FCPA or some other law, such as Sarbanes-Oxley (SOX)? Cristina Revelo said she would start out with some basic questions, such as “How often would something be manually approved? How often are controls skipped? What are the levels of approvals that you have and what is your documentation? What are the reasons? And are you documenting how often a certain department is requiring those overrides?” While it could indicate that a company lacks a culture of compliance or that everything is an emergency, it might mean something else. It might mean that your internal controls need to be evaluated and then recalibrated. The Department of Justice calls this continuous monitoring leading to continuous improvement. Joe Oringel, co-founder of Visual Risk IQ, calls it continuous control monitoring.

However, many compliance professionals, and particularly lawyers, think once a control is in place, it’s set in stone, and it’s there forever. This derives from the unfortunate fact that, once again, many compliance professionals and most lawyers do not understand internal controls. Yet, internal controls, much like the rest of a compliance program, can and should be continually monitored and improved based on information about such things as the number of overrides. Such a review can be evidence of a management problem or a culture of non-compliance at the organization. However, it could be that perhaps the controls need to be adjusted.

Revelo emphasized that it is not simply identifying the issues but remedying them as well, “because that actually might look worse if you identify a lot of issues, but do not fix them. You are better off by remediating everything you are identifying.” From there, you can conduct a root cause analysis as to why there was failure in a control or violation of a compliance procedure. Revelo concluded, “You need to really do that in an in-depth manner and then remediate.”

 Three key takeaways:

1. An internal control override is not necessarily a bad thing if proper procedure is followed.

2. Internal controls are not set in stone.

3. The key is to have a process for monitoring the controls and taking input, literally from each line of defense.

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Data analytics is revolutionizing the field of law and compliance, providing valuable insights and enhancing effectiveness. Data analytics is often referred to as the fuel that moves the compliance engine. It provides the necessary insights to make informed decisions and drive compliance programs effectively. By analyzing data, compliance professionals can gain a deeper understanding of their organization, such as the number of employees per region, which can inform communication strategies and training initiatives. Simply put, to become a better compliance professional, you must become a better businessperson.  This underscores the importance of understanding the business context and using data analytics as a tool to drive compliance efforts.

Data analytics is of utmost importance in the field of law and compliance. It provides valuable insights, enhances effectiveness, and drives compliance programs. Compliance professionals must strive to become better businesspeople and understand the role of data analytics as the fuel that moves the compliance engine. By leveraging data analytics, law firms like Thinkeen can offer innovative solutions for complex transactions. However, education and awareness about the importance of data analytics are still needed to fully harness its potential. Balancing tradeoffs and addressing challenges associated with data analytics are crucial for successful implementation. Ultimately, data analytics is a powerful tool that can transform the way laws and compliance are approached, leading to more effective and efficient outcomes.

 Three key takeaways:

1. Data analytics is often referred to as the fuel that moves the compliance engine.

2. We need more education and awareness about the importance of understanding data so that you can extract the right information

3. Data analytics is a powerful tool that can transform the way law and compliance are approached, leading to more effective and efficient outcomes.

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We are now at a place where there is sufficient data, academic research, and actual use cases from corporations and businesses that demonstrate good ethics and compliance programs are not simply good for business but when properly used, they lead to greater profitability.

For 15 years, Ethisphere has been collecting data around its World’s Most Ethical Company awards. Companies which receive this designation have been found to outperform their peers on various stock indices. Ethisphere calls this the “Ethics Premium.” Ethisphere Executive Vice President (EVP) Erica Salmon Byrne has noted, “In tracking how the stock prices of publicly traded honorees compare to the U.S. Large Cap Index, we found that listed World’s Most Ethical Companies outperformed the large cap sector.” In 2010 that number was a delta of 4.5%. Yet by 2020 that number had skyrocketed to 13.5%. Clearly Ethisphere has been on to something.

Academic research has also shown the efficacy of ethics and compliance programs. George Serafeim and Paul M. Healy demonstrated in their paper, An Analysis of Firm’s Self-Reported Anti-Corruption Efforts, that companies with robust compliance programs do better financially in countries prone to corruption than companies with less effective compliance programs. Without a robust compliance program, even with high sales in a high-risk country, the sales will drop off and lead to a negative Return on Equity (ROE) of between 24% to 30%.

Dr. Kyle Welch, Assistant Professor at George Washington University (GWU), in his paper, co-authored with Stephen Stubben, Associate Professor from The University of Utah, entitled “Evidence on the Use and Efficacy of Internal Whistleblowing Systems” (Report). In this paper, Welch and Stubben reviewed some 15 years of anonymized data from NAVEX Global, Inc. This data was from the company’s hotline reporting systems. Some of the key findings included that companies with a robust whistleblower and reporting system had greater profitability and workforce productivity as measured by Return on Assets (ROA) and there were fewer material lawsuits brought against the company overall and there were lower settlement costs if a lawsuit did occur. Finally, there were fewer external whistleblower reports to regulatory agencies and other authorities.

 Three key takeaways:

1. It’s not simply speaking up, it’s a culture of speak up.

2. Companies with speak up culture, have a material reduction in legal fines and penalties.

3. Use Companies with speak up culture, have a higher ROI.

Do you want to improve your culture? How can you assess your culture and develop a strategy to improve it going forward? Check out this great new tool, The Culture Audit. For more information, click here.

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