14 min
163. Strengthening Compliance Programs Prison Professors
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- Self-Improvement
Companies primarily adopt compliance programs because they recognize the need to mitigate risk. Leaders want to get the end result of a safer workplace with less legal exposure. Merely adopting a compliance program, however, without comprehensive implementation, may not yield the return on investment that a leader wants.
On any given day, we can turn to the Department of Justice website to read press releases of criminal indictments for white collar crime. Many of the defendants in those cases began without any intention to break laws. Yet a lack of a clearly defined business model, or well-engineered compliance system, put those people into the cross hairs of a government investigation. High legal costs and criminal proceedings followed.
All businesses stand vulnerable to the dangers of a government investigation. For these reasons, leaders should take steps to minimize their exposure. That means they should put plans in place to show a commitment to transparency, compliance, and good corporate citizenship.
Our team at Compliance Mitigation has identified 10 reasons that compliance programs may fail in businesses:
A Failure to Appreciate Risk Leader should begin with an honest assessment of the risks the company may face. To get the right answers, they may ask Socratic questions. Rather than starting from the perspective of the company leader, questions should come from the mindset of an investigator. Those people will be cynical. If company leaders do not anticipate such questions, they may fail to appreciate their exposure to risk.
Company leaders frequently strive to:
Provide products or services to satisfy customer needs, Create jobs and paychecks for employees, Contribute to the building of stronger, more vibrant communities, and Earn an acceptable return on investment for shareholders. A company may not have the luxury of hiring an entire team or department to contemplate risk exposure. Yet if they do not understand the risk, they may not see value in a compliance program. If leaders do not see how a compliance program can strengthen the overall health of the organization, they may undermine its effectiveness. Without a good compliance program, the company and its team leaders may face harsher scrutiny from regulators and investigators. For these reasons, proper training should highlight failures and the accompanying costs of a bad compliance program.
Lack of Leadership Buy-In When it comes to compliance, leaders should recognize that the company’s commitment to ethics starts at the top. If leaders do not embrace the principles of good conduct, team members will not take compliance seriously.
Compliance programs that send mixed or inconsistent messaging leave the company vulnerable to liability. That liability can include exposure to internal fraud, lawsuits from customers, investigations by government regulators or law enforcement.
Good training should profile examples of the fallout that has come from such failures in compliance.
A Paucity of Resources Devoted to Compliance: Failing to devote financial resources to support compliance training exposes a company to more risk. If an investigation begins, and the company cannot show a deliberate, consistent investment in the pursuit of excellence, authorities will be less likely to see the business or its leaders as good actors. On the contrary, investigators may accuse the business and the responsible parties of operating from a state of “willful blindness,” a term we heard a lot about while our team members were in prison.
Compliance training does not have to be a drain on the company’s resources. In fact, when leaders design compliance programs to demonstrate a commitment to transparency, they may be simultaneously investing in corporate messaging. That better messaging can lead to better efficiencies, helping every team member get a full grasp of how the company operates and achieves excellence.
With such a commitment, ever
Companies primarily adopt compliance programs because they recognize the need to mitigate risk. Leaders want to get the end result of a safer workplace with less legal exposure. Merely adopting a compliance program, however, without comprehensive implementation, may not yield the return on investment that a leader wants.
On any given day, we can turn to the Department of Justice website to read press releases of criminal indictments for white collar crime. Many of the defendants in those cases began without any intention to break laws. Yet a lack of a clearly defined business model, or well-engineered compliance system, put those people into the cross hairs of a government investigation. High legal costs and criminal proceedings followed.
All businesses stand vulnerable to the dangers of a government investigation. For these reasons, leaders should take steps to minimize their exposure. That means they should put plans in place to show a commitment to transparency, compliance, and good corporate citizenship.
Our team at Compliance Mitigation has identified 10 reasons that compliance programs may fail in businesses:
A Failure to Appreciate Risk Leader should begin with an honest assessment of the risks the company may face. To get the right answers, they may ask Socratic questions. Rather than starting from the perspective of the company leader, questions should come from the mindset of an investigator. Those people will be cynical. If company leaders do not anticipate such questions, they may fail to appreciate their exposure to risk.
Company leaders frequently strive to:
Provide products or services to satisfy customer needs, Create jobs and paychecks for employees, Contribute to the building of stronger, more vibrant communities, and Earn an acceptable return on investment for shareholders. A company may not have the luxury of hiring an entire team or department to contemplate risk exposure. Yet if they do not understand the risk, they may not see value in a compliance program. If leaders do not see how a compliance program can strengthen the overall health of the organization, they may undermine its effectiveness. Without a good compliance program, the company and its team leaders may face harsher scrutiny from regulators and investigators. For these reasons, proper training should highlight failures and the accompanying costs of a bad compliance program.
Lack of Leadership Buy-In When it comes to compliance, leaders should recognize that the company’s commitment to ethics starts at the top. If leaders do not embrace the principles of good conduct, team members will not take compliance seriously.
Compliance programs that send mixed or inconsistent messaging leave the company vulnerable to liability. That liability can include exposure to internal fraud, lawsuits from customers, investigations by government regulators or law enforcement.
Good training should profile examples of the fallout that has come from such failures in compliance.
A Paucity of Resources Devoted to Compliance: Failing to devote financial resources to support compliance training exposes a company to more risk. If an investigation begins, and the company cannot show a deliberate, consistent investment in the pursuit of excellence, authorities will be less likely to see the business or its leaders as good actors. On the contrary, investigators may accuse the business and the responsible parties of operating from a state of “willful blindness,” a term we heard a lot about while our team members were in prison.
Compliance training does not have to be a drain on the company’s resources. In fact, when leaders design compliance programs to demonstrate a commitment to transparency, they may be simultaneously investing in corporate messaging. That better messaging can lead to better efficiencies, helping every team member get a full grasp of how the company operates and achieves excellence.
With such a commitment, ever
14 min