5 Best Practices For Successful Compliance Management

Five Best Practices for Prioritizing and Building an Effective Ethics and Compliance Program

1. Be Proactive in Managing Compliance and Ethics

An organization’s readiness to handle compliance issues is critical as it may impact organizational strategies, employee morale and retention, reputation, brand value and profitability. To that end, successful businesses need to be proactive in terms of establishing compliance controls and processes, defining accountability, and centrally managing compliance programs so they are easily accessible to all stakeholders. Being proactive also requires compliance professionals to collaborate with other departments – risk management, legal, HR, and audit – to best manage compliance processes, controls, templates, and timelines. This approach gives the compliance team comprehensive visibility into organizational compliance performance and requirements, so they can perform regular or ad-hoc assessments to minimize violations and enforcement actions.
 

2. Adopt and Communicate an Ethical Profile

An ethical workplace culture with defined standards and expectations helps an organization operate effectively and efficiently. The foundation of an effective ethics and compliance program is a strong and well-communicated code of conduct, which may most closely represent organizational standards, values, and culture through core policies, procedures, and behavioral expectations. When the organization has multiple subsidiaries or third parties spread across divisions and geographies, code and policy development should consider local cultures, customs, and sensitivities to ensure applicability and commitment. This helps minimize gaps or loopholes in compliance practices. Automated tools can add further value by simplifying the process of policy development, approval, distribution, attestation, and management.
 

3. Train Employees on Compliance Policies

Organizations cannot fully comply with regulations if its employees do not follow organizational policies and procedures. Investing in employee training as regulatory changes and policy updates necessitate is a best practice. Employees need to understand and commit to the organization’s culture and its ethical boundaries, and depending on specific roles and locations, to additional compliance requirements. Technology plays an important role in the creation, legal alignment, learning management systems, tracking, and validation of ethics and compliance training. Many organizations must deliver multiple compliance training courses to align with applicable regulations.
 

4. Integrate Hotlines with the Compliance Program

Many organizations have made whistleblower hotlines available to employees to enable them to report ethical and compliance concerns, including unethical behaviors, harassment, corruption, fraud, discrimination, and other episodes of misconduct. In the United States, any publicly traded company is required to have a hotline in place, as well as the compliance management tools necessary to manage investigations, review and close cases, and to transparently demonstrate ethical and equitable enforcement.

Most hotlines enable anonymous reporting and follow up, along with the means to triangulate reporting and data. Integrating hotlines with the company’s compliance program is a best practice – even where it’s not legally required – to help identify and manage conduct issues, as well as to assure employees of a responsive and non-retaliatory approach to hotline reporting.

5. Adopt a Risk-Based Approach to Compliance Management

A risk-based approach to compliance and ethics management involves identifying, scoring, and surfacing high priority risks within the organization. As a best practice, risk-based compliance programs enable organizations to capture, consolidate, and centralize risk management based on standards, controls, and measures. By applying a risk based approach across the business, GRC professionals can both showcase best practices in spotlighting the most severe compliance risks from across the business and demonstrate actions taken to actively reduce issues, violations, investigations and fines. Based on the risk rating, organizations can effectively plan control testing, protect the organization from compliance risks, and ensure program defensibility.