Tag: compliance

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Innovation in Compliance

Innovation in Compliance: Greg Shultz on Key Traits for Compliance Professionals: Connecting and Listening

Innovation comes in many areas and compliance professionals need to not only be ready for it but embrace it. Join Tom Fox, the Voice of Compliance, as he visits with top innovative minds, thinkers, and creators in the award-winning Innovation in Compliance podcast.

In this episode, Tom welcomes Greg Shultz, the founder of Conformitise, to take a deep dive into his journey in operationalizing compliance in some of the world’s largest companies. Shultz also advises into the essential skills required for a thriving career in compliance.

Emphasizing the importance of active listening, Shultz shares the significance of listening again before advising to foster a collaborative partnership with business teams. Forming personal connections is highlighted, particularly through face-to-face interactions with investment teams, which helps in understanding different personas and building strong relationships over time. Our discussion also touches on the evolving role of data analytics in the compliance field, stressing its criticality in managing global data and mitigating risk in today’s super funds landscape. This episode is a must-listen for anyone aiming to step into or advance within the compliance profession.

Key Highlights:

  • Introduction to Compliance Professional Skills
  • The Importance of Listening and Advising
  • Building Strong Relationships
  • The Role of Data Analytics in Compliance

Resources:

Greg Shultz on LinkedIn

Tom Fox

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Compliance Tip of the Day

Compliance Tip of the Day: How a CEO Can Set The ‘Tone at The Top’- Part 2

Welcome to “Compliance Tip of the Day,” the podcast where we bring you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements.

Whether you’re a seasoned compliance professional or just starting your journey, our aim is to provide you with bite-sized, actionable tips to help you stay on top of your compliance game.

Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law.

Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.

Today, we continue our look at how a CEO can lead with tone at the top for any compliance program.

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Blog

Tone at The Top Week: Part 2 – Ten Things A CEO Can Do

In corporate compliance, a guiding principle is the foundation for success or failure: Tone at the Top. This phrase encapsulates the role of senior executives—particularly the CEO—in setting the ethical standards, cultural expectations, and overall mindset toward compliance within an organization. Without a strong, consistent tone from leadership, even the most well-designed compliance programs will falter. However, the entire organization benefits when senior executives actively lead with integrity and prioritize compliance. In this post, we’ll explore the critical role of leadership in fostering a culture of compliance and list practical ways CEOs and other senior executives can demonstrate the appropriate tone at the top.

But Tone at the Top is more than just words. It is about action. What are 10 things a CEO or Senior Executive can do to demonstrate the right Tone at the Top?

1. Lead by Example

Senior executives must model ethical behavior in every aspect of their role. Employees watch how leaders act, especially in challenging situations. When executives consistently demonstrate integrity in decision-making, it reinforces the importance of organizational compliance. To quote the great Jimmy Johnson, “If you are going to talk the talk, you have to walk the walk.”

2. Communicate Clearly and Consistently

Regular, transparent communication about compliance and ethics is key. CEOs and senior executives should emphasize the importance of compliance in emails, internal memos, town halls, and meetings. Compliance messages should be woven into the fabric of all business communications, not just when issues arise.

3. Embed Compliance in Business Strategy

Compliance should not be an afterthought. Senior executives can demonstrate their commitment by ensuring compliance is part of the strategic business planning process. This means considering regulatory risks, ethical implications, and compliance requirements when setting business goals. Compliance must sit at the table and participate in the long-term planning and implementation of your organization’s business strategy. This includes mergers and acquisitions, assessing and planning for emerging risks, and disaster planning.

4. Empower the Chief Compliance Officer

The CEO should ensure that the CCO has direct access to senior leadership and the board of directors. The FCPA Resource Guide, 2nd edition, states, “DOJ and SEC also consider whether a company has assigned responsibility for the oversight and implementation of a company’s compliance program to one or more specific senior executives within an organization. Those individuals must have appropriate authority within the organization, adequate autonomy from management, and sufficient resources to ensure that the company’s compliance program is implemented effectively.” This shows employees that the compliance function has the full backing of the leadership team. The CCO must also have the authority to manage the compliance program effectively.

5. Allocate Adequate Resources to Compliance

An underfunded compliance program signals to employees that compliance is not a priority. CEOs should ensure a sufficient budget, personnel, and technological resources are allocated to the compliance function. This includes funding for training, audits, monitoring, and reporting tools. This  requirement also follows Hallmark 4 of the Ten Hallmarks of an Effective Compliance Program that CCOs must have adequate resources, stating “the amount of resources devoted to compliance will depend on the company’s size, complexity, industry, geographical reach, and risks associated with the business.”  However, ensure it is not simply budgetary resources but also qualified compliance personnel for your corporate compliance function.

6. Incorporate Compliance into Performance Metrics

Holding employees accountable for compliance should be integrated into the company’s performance metrics and reward systems. Senior executives should ensure compliance-related goals are part of annual performance evaluations and that ethical behavior is rewarded, not just financial performance. Doing business ethically and in compliance should also be incorporated into promotion evaluations. You cannot promote employees who ‘hit their numbers’ but those who work ethically, actively promote the values of the organization, and work to improve the organization’s overall compliance.

7. Deliver Compliance Training Personally

When senior executives participate in compliance training, it sends a powerful message. CEOs and other leaders can demonstrate their commitment by personally delivering training sessions or appearing in training videos. This can be the most powerful statement in many ways, as it reinforces the importance of compliance from the top down.

8. Take Swift and Decisive Action on Compliance Issues.

When compliance violations occur, how leadership responds speaks volumes. CEOs should act swiftly and decisively to investigate and address any issues. Employees need to see that no one is above the law and that compliance breaches will not be tolerated—regardless of an individual’s position in the company. This means justice across your organization and fairness in how consequences are meted out. If you fire employees in Brazil for cheating on their expense accounts, you must fire your top producer in the US for cheating on their expenses.

9. Encourage Open Dialogue and Reporting

Senior executives should actively encourage employees to report compliance concerns without fear of retaliation. The CEO can demonstrate this by promoting the company’s whistleblower program and fostering an environment of openness and transparency. Executives should also be approachable, signaling that compliance concerns will be taken seriously.

10. Align Compensation with Compliance

Executive compensation should reflect the company’s commitment to compliance and ethical behavior. CEOs can lead by example by linking their compensation to compliance performance metrics. This aligns with business success and the company’s commitment to doing things correctly. The same is true for consequences in the form of contractually agreeing to clawbacks and holdbacks of compensation, equity, or options for violations of a corporate compliance program.

Tone at the top is not a one-time initiative. It is an ongoing process that requires continuous attention and reinforcement from senior leaders. When a CEO and other executives lead by example, it sends a clear message that compliance is more than just a regulatory necessity—it’s a fundamental part of how the company does business.

For in-house compliance professionals, fostering this tone from the top is critical to building and sustaining an effective compliance program. It empowers employees to take compliance seriously, encourages ethical decision-making at all levels, and creates an environment where risks are managed proactively.

Ultimately, senior executives’ commitment to ethical leadership and compliance isn’t just good governance—it’s innovative business. By embedding compliance into the company culture through strong leadership, organizations can build trust with stakeholders, protect their reputations, and ensure long-term success.

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Compliance Tip of the Day

Compliance Tip of the Day: How a CEO Can Set The ‘Tone at The Top’- Part 1

Welcome to “Compliance Tip of the Day,” the podcast where we bring you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements.

Whether you’re a seasoned compliance professional or just starting your journey, our aim is to provide you with bite-sized, actionable tips to help you stay on top of your compliance game.

Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law.

Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.

Over the next several episodes, we will look at how a CEO can lead with tone at the top for any compliance program.

 

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Blog

Tone at the Top Week: Part 1 – The Mandate

The 2022 Monaco Memo emphasized that the key to every company is culture. The bottom line is that corporate culture matters, and a corporate culture that fails to hold individuals accountable and invest in compliance—or worse, thumbs its nose at compliance—leads to bad results.

From the enforcement perspective, the DOJ will assess companies’ ethical cultures. From the compliance perspective, the ethical tone of a company and accountability all start at the top and, most specifically, senior management. The 2020 FCPA Resource Guide, 2nd edition, stated, “Beyond compliance structures, policies, and procedures, it is important for a company to create and foster a culture of ethics and compliance with the law at all levels. 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.” The 2023 Evaluation of Corporate Compliance Programs (ECCP) sets out the following inquiries to assist companies in understanding this requirement.

Conduct at the Top—How have senior leaders encouraged or discouraged compliance through their words and actions, including the type of misconduct involved in the investigation? What concrete actions have they taken to demonstrate leadership in the company’s compliance and remediation efforts? How have they modelled proper behavior for subordinates? Have managers tolerated greater compliance risks in pursuit of new business or greater revenues? Have managers encouraged employees to act unethically to achieve a business objective or impeded compliance personnel from effectively implementing their duties?

These requirements are more than simply the ubiquitous “tone-at-the-top,” as they focus on the conduct of senior management. The DOJ wants to see a company’s senior leadership doing compliance. The DOJ asks if company leadership has brought the right message of doing business ethically and in compliance to the organization through their words and concrete actions. How does senior management model its behavior based on a company’s values, and how is such conduct monitored in an organization?

This means you must document corporate decisions where a compliance solution was proposed but rejected. In other words, is there a business justification for moving forward with the action? How will the compliance risk be managed going forward if this action occurs? Similarly, compliance techniques should be documented to demonstrate that your compliance function has met the requirements of the final question.

In-house compliance professionals know an effective compliance program requires more than policies, procedures, and controls. It needs commitment from every level of the organization, starting at the top. Senior executives, especially the CEO, set the tone that trickles down through the ranks, influencing how employees perceive the importance of compliance. Why is tone at the top so essential? Consider the following:

  • Leadership Drives Culture: Employees take their cues from the behavior of senior leaders. If executives demonstrate a strong commitment to ethical practices and compliance, employees are more likely to follow suit. Conversely, that mindset will permeate the organization if leaders appear indifferent to compliance or cut corners.
  • Trust and Transparency: When senior executives consistently emphasize ethical behavior, transparency, and accountability, they build trust with employees, shareholders, and external stakeholders. This trust is critical in creating an environment where employees feel empowered to speak up about potential compliance concerns.
  • Mitigating Risk: A strong tone at the top can help an organization avoid costly regulatory fines, reputational damage, and legal penalties. It also creates an environment where potential issues are identified early and addressed promptly.
  • Sustainability of the Compliance Program: A compliance program can only thrive if integrated into the company’s everyday operations. The CEO and senior executives are key to embedding compliance into the organization’s fabric and ensuring its long-term sustainability.

The tone at the top is more than simply words. It is easy for senior executives to talk about compliance, ethics, and integrity. What matters, though, is action. Employees are quick to notice when words don’t match actions, and a disconnect between what leaders say and do can be toxic to the compliance culture. Senior executives must integrate compliance into the company’s DNA to demonstrate a commitment to compliance. It cannot be seen as a “box-ticking” exercise or a legal necessity; it must be embraced as a core value that drives business decisions. Below are 10 practical ways senior executives can lead by example and set the right tone at the top for a best practices compliance program.

Senior management must share these same values through operationalizing compliance going forward. Lynn Paine, in her seminal article, Managing for Organizational Integrity, laid out five factors that can be used as guideposts to not only set the right tone for senior management on doing business ethically and in compliance but it can also lay the groundwork for senior management to model appropriate behavior and then have it monitored by the company going forward.

  • Senior management must understand and effectively convey a company’s guiding principles to the workforce in various contexts.
  • The company’s leader must be committed and willing to act on the values. This means that management must not simply ‘overlook’ the transgressions of top producers.
  • A company’s systems and structures must support its guiding principles, and senior management cannot override these internal systems and structures without justification and Board approval.
  • A company’s values must be integrated into normal management decision-making and reflected in its critical decisions. Sometimes, a company must turn down a business if there are too many red flags, or its values and ethics will be violated by engaging in such behavior.
  • Managers must be empowered to make ethically sound decisions daily. This means senior management must fully support and back up such decisions.

In corporate compliance, a guiding principle is the foundation for success or failure: Tone at the Top. This phrase encapsulates the role of senior executives—notably the CEO—in setting the ethical standards, cultural expectations, and overall mindset toward compliance within an organization. Without a strong, consistent tone from leadership, even the most well-designed compliance programs will falter. However, the entire organization benefits when senior executives actively lead with integrity and prioritize compliance. Over the next week, we will lay out how an organization’s CEO and senior leadership can foster a culture of compliance by laying out practical ways CEOs and other senior executives can demonstrate the appropriate tone at the top.

Ed. Note: Some years ago, I asked a good friend what I could do with the blog posts to help them with their work as a CCO. They laughingly replied that they should put my blogs in outline and bullet point formats rather than in my lawyerly paragraph format so they could cut and paste my blog posts into memos that could be sent to senior management. So, for the rest of this blog post series, I will respond to this request and write blog posts using more outlines and bullet points. The heart of each blog post will find its way into a usable Memo for you and your compliance program.

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10 For 10

10 For 10: Top Compliance Stories For The Week Ending September 14, 2024

Welcome to 10 For 10, the podcast that brings you the week’s Top 10 compliance stories in one podcast each week. Tom Fox, the Voice of Compliance, brings to you, the compliance professional, the compliance stories you need to be aware of to end your busy week. Sit back, and in 10 minutes, hear about the stories every compliance professional should be aware of from the prior week.

Every Saturday, 10 For 10 highlights the most important news, insights, and analysis for the compliance professional, all curated by the Voice of Compliance, Tom Fox. Get your weekly filling of compliance stories with 10 for 10, a podcast produced by the Compliance Podcast Network.

  • Albanian ex-PM indicted for corruption. (Reuters)
  • The Bibi Files. (The Guardian)
  • NYPD Police chief resigns. (NYT)
  • Will South Africa leave the FATF dirty money list in 2025? (Bloomberg)
  • Google and Apple face billions in back taxes in the EU. (NYT)
  • Slovakia loses corruption battle. (Politico)
  • John Deere settles FCPA allegations.   (WSJ)
  • Ex-Glencore employees plead not guilty. (FT)
  • PCAOB requires audit firms to bring in outside experts to oversee audit quality. (FT)
  • Hong Kong now high-risk? (WSJ)

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Compliance Tip of the Day

Compliance Tip of the Day: Protecting Against Pre – taliation

Welcome to “Compliance Tip of the Day,” the podcast where we bring you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements.

Whether you’re a seasoned compliance professional or just starting your journey, our aim is to provide you with bite-sized, actionable tips to help you stay on top of your compliance game.

Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law.

Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.

In today’s episode, we provide 6 steps to help you remediate your contracts to remove illegal retaliation language and prevent such language from being inserted going forward.

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the full 3-book series, The Compliance Kids on Amazon.com.

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Blog

Addressing Pre-taliation

One of the most talked about subjects in corporate compliance is the issue of pre-taliation—an increasingly common enforcement target by the U.S. Securities and Exchange Commission (SEC). Matt Kelly and I did a recent podcast on the topic, and you can check out the recent episode of Compliance Into the Weeds for an audio discussion of the topic. Matt has blogged on the topic of Radical Compliance. This post will deeply dive into this issue and show why pre-taliation clauses in contracts, which inhibit whistleblowers from claiming financial rewards, are illegal and how compliance officers can effectively address this recurring problem.

What Is Pre-Taliation?

Pre-taliation refers to contract provisions that prevent or discourage employees from reporting potential misconduct to regulators. Typically, these clauses claim an employee forfeits the right to financial rewards associated with whistleblowing. While companies cannot directly prohibit employees from reporting wrongdoing, they attempt to introduce barriers that dissuade individuals from taking the financial risk of blowing the whistle. These clauses have a “chilling effect” on potential whistleblowers and are, quite simply, illegal under SEC rules.

The SEC’s recent enforcement actions against several corporations show that despite being a known violation, many businesses continue to use these clauses in their employment contracts. The fines may be relatively small, but the impact of these enforcement actions is clear: companies must remove pre-taliation language from all contracts, or they will face the consequences.

Recent SEC Enforcement Actions on Pre-Taliation

Last week, the SEC sanctioned seven companies for including pre-taliation language in their employment contracts. One major violator, Acadia Healthcare Corporation, was fined $1.4 million, while others, including TransUnion and IDEX Corporation, paid penalties ranging from $19,000 to $690,000. While these fines may seem minor compared to other enforcement actions, the real issue lies in the recurring use of these illegal clauses.

For the compliance professional, the key is that these contracts stated that employees were free to report potential violations to regulators. Still, they included an additional clause that employees had to forfeit any right to claim whistleblower rewards. This approach violates SEC whistleblower provisions designed to incentivize whistleblowers with financial rewards for bringing misconduct to light.

Why Do Companies Use Pre-Taliation Clauses?

Companies continue to use such clauses to prevent them from going to the SEC or other regulators. Including pre-taliation language is an intentional tactic designed to scare employees into silence. These clauses are legally dubious, but they can effectively discourage employees from whistleblowing if they are unaware of their legal rights. The logic is simple: why risk your career and financial livelihood to report misconduct without potential financial reward?

In some cases, these companies may also be testing the boundaries of the law if regulators do not prioritize enforcement. However, as the SEC’s actions have shown, this is a serious miscalculation, as it is clear that using such clauses is intentionally trying to prevent employees from exercising their federal rights.

Addressing Pre-Taliation: A Compliance Officer’s Roadmap

How can compliance officers avoid falling into the same trap as Acadia Healthcare and others? Here’s a practical roadmap for compliance professionals tasked with eliminating pre-taliation clauses from their companies’ contracts:

  • Conduct a Contract Review

The first step is to conduct a comprehensive review of all employment contracts, both current and historical. This is easier said than done, particularly for large organizations with decentralized operations. As Matt Kelly pointed out, the challenge lies in the sheer volume of contracts and the number of people involved in drafting and approving them. Contracts may come from various teams—HR, legal, commercial, and even procurement—so identifying all instances of pre-taliation language requires a coordinated effort across multiple departments.

  • Establish Clear Contract Policies

The next step is establishing clear and enforceable policies about what can and cannot be included in contracts. This policy should be enterprise-wide and include specific language that prohibits the inclusion of pre-taliation clauses. Not only does this create a standard for new contracts, but it also sets a clear precedent for remediating older contracts that may still contain illegal language.

This policy should also include specific guidelines for all contracts, not just employment agreements, as pre-taliation clauses can sometimes slip into customer contracts, vendor agreements, and third-party relationships. For instance, earlier this year,  J.P. Morgan was penalized for including pre-taliation language in its customer contracts, which stipulated that customers had to notify the company before reporting misconduct to regulators.

  • Collaborate with Legal and HR Teams

A cross-functional approach is critical to solving this issue. Compliance officers must work closely with the legal and HR teams to implement contract policies correctly. HR plays a key role in drafting employment contracts, while the legal department ensures the language complies with regulatory standards. Without close collaboration, tracking down all the contracts that need to be updated or ensuring that future contracts are compliant will be nearly impossible. The idea that there is a magical person in the company who can fix this problem is a myth. Addressing pre-taliation requires a team effort involving multiple functions and a strong commitment to enterprise-wide remediation.

  • Provide Employee Education

Another important step is to educate employees about their rights under whistleblower laws. Pre-taliation language works best when employees do not understand that these clauses are illegal. By informing employees of their rights, compliance officers can undermine the chilling effect these clauses are designed to create. Employees should know they are legally entitled to report misconduct to regulators and cannot be penalized.

  • Establish a Remediation Plan for Older Contracts

Once all pre-taliation clauses have been identified, the next step is to establish a remediation plan. This may involve contacting former employees who signed contracts with illegal language and current employees who must be informed that their contracts have been updated. While this can be a complex process, it is essential for maintaining the integrity of the company’s compliance program.

  • Monitor for Future Violations

Finally, compliance officers should establish ongoing monitoring to ensure that pre-taliation language doesn’t slip into future contracts. This can be done by including contract reviews as part of regular compliance audits or by implementing automated tools to flag problematic language. By proactively monitoring contract language, compliance officers can prevent future violations and ensure that their company complies with SEC regulations.

A Simple Fix but a Complex Process

Addressing pre-taliation clauses may seem straightforward, but as Matt Kelly pointed out, it can be highly complex. With multiple stakeholders involved and various contracts to review, it truly takes a coordinated, enterprise-wide effort to eliminate these illegal provisions.

For compliance officers, the message is clear: do not wait for the SEC to come knocking. Review contracts, establish clear policies, and educate employees about their rights. By taking these steps, compliance officers can ensure that their companies are compliant and foster a culture where whistleblowers feel empowered to come forward. With the new DOJ Whistleblower Financial Incentive Program, it is only a matter of time before the DOJ comes knocking.

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Compliance Tip of the Day

Compliance Tip of the Day: Podcasting for Compliance Training

Welcome to “Compliance Tip of the Day,” the podcast where we bring you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements.

Whether you’re a seasoned compliance professional or just starting your journey, our aim is to provide you with bite-sized, actionable tips to help you stay on top of your compliance game.

Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law.

Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.

In this episode, we explore how you can use the audio podcast format to facilitate your compliance training regime.

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the full 3-book series, The Compliance Kids on Amazon.com.

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Blog

The Case for Automation: Why Compliance Professionals Must Embrace the Future

In 2024, compliance is no longer just a check-the-box function but a vital component of risk management, corporate governance, and business strategy. As companies scale and regulations become more complex, the traditional methods of managing compliance—using spreadsheets, SharePoint, and manual processes—are proving inadequate. In a recent episode of the Innovation in Compliance podcast, Travis Howerton, Co-Founder and CEO of RegScale, emphasized the importance of automation in compliance, mainly through the lens of cybersecurity, digital transformation, and the growing regulatory burden. Their conversation sheds light on why compliance professionals need to embrace automation now more than ever.

Compliance and Digital Transformation: A Necessary Partnership

Compliance is often seen as the enemy of innovation, a cost center, and a roadblock to business development. Howerton recalls a time when cyber and compliance were usually viewed as the “no” force in an organization, blocking new initiatives due to concerns over risk. But times have changed. Compliance is no longer a hindrance to business growth but an enabler, especially when integrated into a company’s digital transformation efforts.

Howerton strongly advocates for compliance professionals to rethink their approach and adopt a more proactive stance. Rather than being the department that says no, compliance can empower businesses to move faster and innovate more effectively—provided they have the right systems in place.

Automation is key to this transformation. RegScale aims to digitize regulatory requirements into code, moving away from cumbersome and static processes like filling out spreadsheets and chasing paper trails. Automation makes compliance a “free outcome” of operational excellence, enabling businesses to focus on innovation without sacrificing their risk posture.

Why Continuous Monitoring Matters

The importance of continuous compliance monitoring is evident as regulatory frameworks become increasingly complex. Regulations evolve, not just in scope but also in speed, and a one-time audit or annual review is no longer sufficient. Continuous monitoring ensures compliance is not reactive but an ongoing activity that adapts as risks emerge and regulatory requirements change.

Manual processes have problems, and Howerton was quite candid about their limitations. Relying on spreadsheets, while familiar and easy to set up, often results in outdated or incomplete data. Compliance professionals who still rely on these methods work in a reactive mode, responding to issues only after they become serious. Worse, the inefficiencies of manual tracking can lead to missed deadlines, incomplete audits, and a false sense of security.

With automation, companies can continuously monitor compliance, ensuring they meet today’s standards and are prepared for tomorrow’s changes. Automated tools also reduce the risk of human error and can flag issues in real time, allowing compliance teams to address risks before they escalate.

How Automation Enhances Cybersecurity Compliance

Automation is not simply a nice-to-have for highly regulated industries like finance, healthcare, and national security; it is essential to doing business. Compliance in these sectors is about meeting external regulatory requirements and protecting the business’s core assets—its data, infrastructure, and, ultimately, reputation.

Howerton noted that cybersecurity has become a board-level concern for organizations across industries. No matter which party is in power or how political landscapes shift, cybersecurity will continue to be a top priority for businesses. A breach can lead to massive financial losses, reputational damage, and legal liabilities. Yet, cybersecurity compliance is notoriously difficult to manage, especially when relying on manual processes.

Automated compliance solutions can integrate cybersecurity frameworks into operational processes. Instead of requiring constant manual updates and reviews, these systems can continuously monitor for threats and ensure the necessary protections are in place.

Moreover, compliance officers can shift from reactive to proactive by digitizing regulations and automating reporting. They can focus on managing actual risks rather than spending time maintaining paperwork. This approach transforms compliance from a burdensome process into a critical driver of business value.

Overcoming Resistance to Automation

Despite the clear benefits, there is still resistance to automation in many compliance departments. Howerton acknowledges that much of this resistance is cultural. The introduction of automation may threaten some professionals, especially those with legal or non-technical backgrounds who worry that it will eliminate their roles. Others may believe that their current manual systems are “good enough.”

However, as Howerton explains, the pace of regulatory change and the speed at which new risks emerge mean manual processes are no longer sustainable. “Software is eating the world,” he says, and compliance is no exception. The complexity of managing compliance in a digital world will overwhelm businesses that need to adapt.

How can compliance professionals overcome this reluctance? By reframing the conversation. Automation doesn’t eliminate jobs; it enhances them. By taking over the repetitive, time-consuming tasks that no one enjoys—like chasing down documentation or managing endless spreadsheets—automation allows compliance professionals to focus on the higher-level strategic work that truly matters: managing risk, advising the business, and ensuring long-term compliance.

The Cost of Inaction

The most compelling reason to embrace automation is the cost of inaction. Compliance breaches can be devastating, both financially and reputationally. A breach or failed audit does not simply result in fines; it can lead to a loss of trust among customers, investors, and stakeholders.

In the long term, the organizations that thrive will have seamless, scalable, and sustainable integrated compliance into their business processes. Manual processes may have worked in the past, but as we approach 2030 and beyond, they will not be enough to keep up with the pace of change.

Howerton closes the discussion with a powerful analogy: “You don’t have brakes on a car to slow down; you have brakes so you can drive fast.” Compliance allows businesses to move faster, innovate more, and confidently explore new opportunities when done right. By embedding automation into their compliance programs, companies can protect themselves from risk while driving forward into new markets and opportunities.

The Future of Compliance is Automated

As we look to the future, one thing is clear: automation is no longer optional for compliance professionals. The growing complexity of regulations, the need for real-time monitoring, and the increasing importance of cybersecurity make it only possible for companies to rely on manual processes. Continuous monitoring, powered by automation, will be the key to managing these challenges effectively.

For compliance professionals, the time to embrace automation is now. The future is coming faster than ever, and those who fail to adapt risk being left behind.