When it comes to analyzing a company’s health, leaders don’t need to look further than its compliance culture. When companies incorporate an ethical corporate culture, they glean innumerable benefits from it. A few of these include a happier work environment, satisfied employees who turn into long-term company ambassadors, several million saved in lawsuits, and a bottom line that doesn’t stop growing.
The golden rule for maintaining an ethical culture involves walking on the path of your industry compliance. This simply means sticking to the regulatory and safety standards that your industry sets. In this article, you’ll navigate the best methods to build an efficient corporate culture of ethics that lasts.
Compliance Starts with Leadership
In becoming staunch advocates of ethics, senior leaders motivate the middle management for treading in the same footsteps. Senior leaders are often the emissaries of a thriving culture of compliance. Every action they take directly mirrors the way their workforce, as a whole, would work.
In its Evaluation of Corporate Compliance Programs, the U.S. Department of Justice states, “The effectiveness of a compliance program requires a high-level commitment by company leadership to implement a culture of compliance from the middle and the top.”
Your managers are the people who are directly in conversation with the employees each time an ethics red flag unfolds in the workforce. Train them in the art of handling ethical issues and make sure they’re well-versed with the company’s code of conduct.
Align Compliance with Risk Management and Other Business Goals
Typically, companies consider compliance and risk management departments are separate branches. But if you want your compliance culture to thrive, it’s critical to align your HR risk management department with it. Whereas the risk department puts the spotlight on uncertainty, the compliance department narrows its focus to adherence.
Misconducts like cases of corporate espionage, not running due diligence on new customers, or concealing suspicious transactions are a few of the many repercussions that spring out from the risk of non-compliance.
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Instances that trigger these risks should run directly through your risk management department. Consecutively, the compliance department must factor in the amount of risk an organization is willing to take to fulfill its strategic goals.
Implement Training Related to Compliance
If a company aims to build a solid compliant culture, it must invest in high-quality compliance training. Good compliance training is the one that stays with the employees in the long run – and monotonous lectures are not the best way to get this knowledge across.
A better approach, instead, would be to make the training as engaging and fun as possible. Replace passive listening with activities like games, engaging videos, or skits. The only way employees would retain most of what they’ve learned during the training would be if they remain fully interested and engaged in the process.
Test the Effectiveness of that Training
Offering great compliance training is just half the work done when it comes to building an ethical workforce. Testing the effectiveness of your training from time to time is critical to spot and fill any gaps left behind in the company’s compliance program. For instance, if your company sees a large number of employees who resign, chances are, most of the misconducts in your workplace go unreported. Making your employees understand how exactly they can report misconduct anonymously, in this case, might be the solution to this issue.
Review your company’s code of conduct and policies regularly and run frequent employee assessments to test the efficiency of training. Keep your employee handbooks updated with the most recent practices in the area of compliance. The outcomes churned out from these tests will help you polish or repair any area of training that needs more work.
Compensate Good Behaviors
From the “Employee of the Month” program to a quarterly contest designed for boosting your sales – companies deploy several incentives and programs to bring out the best in their employees.
Infuse the same strategy into your company’s compliance goals. Compensate ethical behaviors by offering the right incentives. When working on an incentive program, make sure the incentives are fully in line with your company’s compliance standards.
A few examples could be: public recognition, a reward of low dollar value, culturally relevant incentives, and compensations that replace the regular monetary rewards with social proof – this is especially effective when you want to encourage ethical behavior for the sake of compliance and not just monetary perks.
Harness Technology
Like everything else in this globalized economy, technology becomes your company’s best friend when incorporating a solid compliance culture.
Ensuring your compliance program remains in adherence requires a special set of tools. When it comes to tracking compliance, using time-consuming and conventional methods like spreadsheets consume a massive chunk of your HR department’s time.
In addition, critical areas like compliance with employment and tax laws are highly challenging to track. For one, laws change constantly and vary with different states and countries. Staying compliant with these laws demands a lot of work and there remains a high chance of errors. Software can help HR professionals remain compliant with labor and tax laws in the most accurate manner.
Nominate a Person or Committee to Be Responsible for Compliance
You may have a solid compliance program in place. But unless you know how to operate and maintain it, chances are, you might not notice much of an outcome.
This is where the need for a committee or an individual comes in. Considering HR professionals know and understand the employees better than the rest of the company, they are typically the first choice for this role.
When your compliance program is in good hands, your employees and your company both stand to benefit from it. It gets easier for employees to report issues and organizations know exactly where to pinpoint each time misconduct unfolds.
A Final Word
Slowly but surely, an efficient compliance system can help companies avert a majority of misconducts from taking place. HR professionals must help create compliance systems that make it incredibly simple for employees to “do the right thing.” Promoting ethical behavior, implementing a well-researched code of conduct and company policies, and taking immediate action against any issue related to compliance are a few of the many building blocks of a lasting culture of compliance.
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