Tag: culture

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Tone at the Top Week: Part 4 – CCOs Using Team Meetings to Further Compliance

We continue our blog post series on how CEOs and top senior executives can demonstrate the ubiquitous Tone at the Top. Setting the tone of doing business ethically and in compliance is one of the most critical responsibilities for CEOs and senior executives. While large-scale communications such as town halls and corporate-wide emails certainly play an essential role, there is one venue where the tone can be effectively set in a more actionable and intimate way: team meetings.

Team meetings, often focused on operational topics, provide a unique opportunity for leaders to engage directly with their teams on compliance matters. These smaller, more focused settings allow meaningful discussions about ethical behavior, compliance risks, and policy adherence. By strategically incorporating compliance into team meetings, executives can ensure that ethical considerations are baked into daily operations and decision-making processes. This post will explore how CEOs and senior leaders can leverage team meetings to reinforce compliance and establish the right tone at the top.

  • Make Compliance a Standing Agenda Item in Leadership Team Meetings

Leadership team meetings often involve high-level business strategy, performance metrics, and operational objectives. However, these meetings are also an opportunity to highlight the importance of compliance. Senior executives and department heads are role models within the organization. When they treat compliance as a priority in their discussions, it signals to their teams that ethical behavior and adherence to the law are non-negotiable elements of the company’s operations.

How to Implement

  • Ensure that compliance is a standing agenda item in leadership team meetings. This could include updates on compliance program initiatives, discussions of recent compliance risks, or analysis of how regulatory changes might impact the business.
  • Encourage leaders to cascade these compliance messages to their direct reports, ensuring the organization is aligned at all levels.
  • Use these meetings to identify areas where compliance could be strengthened within each department and provide executives with the necessary resources to address these gaps.

By making compliance a regular part of leadership conversations, you normalize it as part of the company’s strategic considerations.

  • Lead by Example in Your Own Meetings

One of the most powerful ways to set the tone at the top is to demonstrate your commitment to compliance in team meetings. Senior executives must embed compliance into every conversation about business decisions, strategies, and performance metrics.

This is crucial because people tend to imitate their leaders’ behavior. When executives consistently incorporate compliance considerations into discussions about business operations, it becomes clear that ethical behavior is not a separate initiative but part of how the company functions.

How to Implement

  • When reviewing business strategies, ask questions about managing compliance risks. For example, if a new product is being launched, inquire about the regulatory requirements and whether the company is meeting them.
  • During performance reviews, assess how managers and employees adhere to the company’s compliance policies. Reward ethical behavior, not just financial or operational results.
  • Be transparent about the compliance challenges the company may face and how you expect the team to address them.

Leading by example shows that compliance isn’t just the responsibility of the legal or compliance department—it’s everyone’s responsibility.

  • Conduct Regular Compliance Check-ins with Department Heads

CEOs and senior executives should meet regularly with department heads or team leaders to discuss how compliance is integrated into their teams’ day-to-day operations. These check-ins provide an opportunity to evaluate how well the company’s compliance program functions. Compliance risks vary by department, so it’s important to ensure that leaders at every level actively manage them. Regular check-ins provide insight into how compliance initiatives are being implemented and whether additional support is needed.

How to Implement

  • Schedule monthly or quarterly meetings with department heads to discuss compliance. Topics should include how well the department is adhering to company policies, any challenges they face in meeting compliance requirements, and potential risks.
  • Ask for updates on compliance training within each department—are employees attending, and is the training effective? Offer resources and assistance if certain areas need more focus.
  • Use these check-ins to identify potential areas of non-compliance or emerging risks and take steps to address them before they escalate.

Regular compliance check-ins create accountability among department leaders and ensure that compliance is continuously monitored across the organization.

  • Reinforce Compliance Training and Policies in Team Meetings

One of the most practical ways to integrate compliance into team meetings is by reinforcing the importance of compliance training and company policies. While formal training sessions are crucial, ongoing reminders help ensure compliance stays at the top of employees’ minds. Compliance is an ongoing process, not a one-time event. Reminding employees about training sessions, policy updates, and regulatory changes helps keep the compliance program fresh and relevant.

How to Implement

  • Use team meetings to remind employees of upcoming compliance training sessions. Personalize your message by explaining how these training sessions directly relate to their roles and the risks they may encounter.
  • Discuss any recent updates to company policies or new regulations affecting the business. Ensure that everyone understands the implications of these changes and how they should adjust their behavior accordingly.
  • Endorse compliance training by sharing examples of how it has helped the company avoid risks or improve operations. Your endorsement will increase employee engagement with these programs.

Reinforcing training and policies regularly helps ensure that employees remain aware of their compliance obligations.

  • Open the Floor for Compliance-Related Concerns and Questions

The final and arguably most important way to set the right tone at the top is by encouraging open dialogue about compliance. Team meetings offer an opportunity to create a safe space where employees feel comfortable raising compliance concerns or asking questions. Always remember that part of a Speak Up culture is listening.

This point is of the utmost significance. When employees are afraid to speak up about compliance issues, small problems can quickly escalate into major risks. By fostering a culture of openness, you encourage employees to address potential problems proactively before they become serious.

How to Implement

  • At the end of each meeting, allocate time for employees to ask questions or raise concerns related to compliance. Make it clear that you take these issues seriously and that there will be no retaliation for speaking up.
  • Encourage managers to follow up on any concerns raised and ensure that they are addressed promptly. If necessary, escalate issues to the compliance team for further investigation.
  • Lead by example by actively engaging with any compliance concerns during the meeting. Show that you are approachable and willing to help resolve compliance issues.

Creating an environment where employees feel empowered to speak up reduces the likelihood of compliance breaches and strengthens the company’s overall integrity.

The Power of Team Meetings in Compliance Leadership

Establishing the right tone at the top for a best practices compliance program is not a one-time event; it requires ongoing engagement and consistent messaging. Often viewed as operational, team meetings offer a critical venue for CEOs and senior executives to reinforce their commitment to compliance in an actionable, intimate setting.

By making compliance a standing agenda item, leading by example in your meetings, conducting regular check-ins, reinforcing training, and opening the floor for concerns, senior leaders can build a culture where compliance is not just an expectation but a fundamental part of how the company operates.

Ultimately, this consistent, hands-on approach builds trust, fosters accountability, maintains compliance, and becomes an organizational competitive advantage.

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Bank of America’s Corporate Culture Crisis: Part 5 – A Case Study for Compliance

Compliance professionals constantly seek to understand how systemic issues within corporate hierarchies can lead to severe consequences. The recent revelations about Bank of America’s (BoA) persistent workplace culture problems are a powerful reminder of compliance’s critical role in safeguarding employees and the organization.

This week, I have explored the BoA failure around workplace culture from various perspectives articulated by the Everything Compliance gang, including Karen Woody, Jonathan Armstrong, Matt Kelly, Karen Moore, and Jonathan Marks. This exploration included the failure of internal controls, failures by the Board and senior management, culture failures around highly driven, self-selecting employees, and the cultural miasma that is BoA from a perspective from across the pond. You can check out the full Everything Compliance episode here. We conclude our series with a summary of lessons learned for compliance and how compliance can use those lessons going forward.

The scandal at BoA involving the excessive hours worked by junior employees highlights a profound crisis in corporate culture that has significant implications for compliance professionals. Despite previous promises of reform following similar incidents, BoA’s failure to address these issues effectively reveals systemic problems that transcend mere policy implementation. The tragedy of junior banker Leo Lukenas, who died after working over 100 hours a week for multiple weeks in a row, underscores the urgent need for stronger internal controls, better communication between management levels, and a culture that genuinely prioritizes employee well-being.

This situation at BoA serves as a critical case study for compliance professionals, illustrating the dangers of a disconnect between senior management’s intentions and the actions of middle management. While senior executives may set policies to limit overwork, middle managers often circumvent these rules, perpetuating a toxic work environment. BoA’s manual control system’s failure, ineffective internal audits, and HR oversight further exacerbate the problem. Compliance professionals must ensure that internal controls are implemented, actively monitored, and enforced to prevent similar issues in their organizations.

A key lesson from the BoA crisis is the importance of addressing the role of incentive structures. In high-stakes environments like investment banking, where bonuses and career advancement are tied to deal closures, there is a significant risk of overwork becoming normalized. Compliance officers must advocate for realigning incentives to balance business goals with ethical standards and employee well-being. This involves addressing the symptoms of such crises and tackling the root causes, such as toxic corporate culture and misaligned incentives.

The BoA scandal highlights the critical role of internal controls in maintaining a healthy and sustainable corporate culture. Relying on self-reporting as a key control mechanism in this high-risk environment proved ineffective, as employees were pressured to underreport their hours. Compliance professionals must recognize that self-reporting should be supplemented with independent verification methods, such as automated time tracking and regular audits, to ensure accurate data collected and controls are effective.

A holistic approach to risk management and compliance must be considered. Internal controls must be integrated into a broader framework, including solid ethical leadership, ongoing employee education, and clear channels for reporting concerns. The failure of BoA’s control environment, monitoring, and remediation efforts allowed a culture of overwork to persist, ultimately leading to repeated tragedies. For compliance professionals, this underscores the need for continuous improvement and active management of internal controls.

The role of the board of directors in overseeing corporate culture is crucial. The BoA crisis demonstrates that board members must go beyond surface-level management reports and engage directly with employees to understand workplace challenges. A proactive approach, including regular reports on employee well-being metrics and internal audits focused on workplace culture, can help prevent such crises. Moreover, creating a culture where employees feel safe to voice concerns is essential for identifying and addressing risks before they escalate.

The Bank of America scandal is a stark reminder of the human cost of a toxic work culture and the vital role that compliance professionals play in safeguarding both employees and organizations. The lessons from this tragedy should guide efforts to create healthier, more sustainable work environments. Compliance is not just about preventing legal and regulatory risks but also about fostering a corporate culture that values integrity, transparency, and the well-being of all employees. By aligning business metrics with these values, companies can achieve sustainable success that benefits their bottom line and people.

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Compliance Tip of the Day

Compliance Tip of the Day: Asking Questions for Compliance

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 consider the technique of asking questions to improve both culture and compliance at your organization.

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

To check out The Compliance Handbook, 5th edition, click here.

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Bank of America’s Corporate Culture Crisis: Part 1 – A Case Study in Failure

Compliance professionals constantly seek to understand how systemic issues within corporate hierarchies can lead to severe consequences. The recent revelations about Bank of America’s (BoA) persistent workplace culture problems are a powerful reminder of compliance’s critical role in safeguarding employees and the organization.

This week, I will explore the BoA failure around workplace culture from various perspectives articulated by the Everything Compliance gang, including Karen Woody, Jonathan Armstrong, Matt Kelly, Karen Moore, and Jonathan Marks. This exploration will include the failure of internal controls, failures by the Board and senior management, culture failures around highly driven, self-selecting employees, and the cultural miasma that is BoA from a perspective from across the pond. The full Everything Compliance episode will be posted on Thursday, August 29.

In Part 1, we set the stage and then delve into the factors contributing to BoA’s toxic culture, the implications for compliance officers, and the lessons we can draw to prevent similar issues in your organizations.

Bank of America has faced intense scrutiny following a series of harrowing articles, in a story broken by the Wall Street Journal (WSJ), outlining a toxic workplace culture within its investment banking division. This culture of overwork has had tragic consequences, including the death of junior banker Leo Lukenas, who had been working over 100 hours a week leading up to his untimely death. Disturbingly, this is not an isolated incident. A similar event occurred in 2013 when an intern, Moritz Erhardt, who worked in BoA’s London office, also died after working excessive hours. Despite promises for reform, these practices have persisted, indicating deep-seated issues within the company’s corporate culture.

One of the key issues is the disconnect between senior management’s intentions and the actions of middle management. While senior executives at BoA have voiced their concern for the well-being of their junior bankers and have set policies to limit overwork, middle managers have often circumvented these rules. Instead of enforcing the 80-hour workweek cap, they instructed employees to underreport their hours, ignoring internal controls and perpetuating a sweatshop-like environment.

This phenomenon is not simply a BoA problem; it’s a stark example of how middle managers can sabotage well-intentioned corporate policies. It underscores the importance of effective communication and alignment between all levels of management.

A glaring issue in this case is the failure of internal controls. In today’s technologically advanced age, middle management should have responded more to BoA’s manual control system for logging hours. Automated systems for tracking work hours could have prevented such blatant disregard for policies. Moreover, there was a lack of adequate internal audits and HR oversight. This highlights the necessity of robust, automated internal controls and regular audits for compliance professionals to ensure adherence to corporate policies.

Another critical aspect discussed is the culture of retaliation against employees who try to report overwork or seek help. In some instances, employees have been punished for following the rules, such as by having to work on holidays or receiving criticism from their managers. This toxic environment discourages whistleblowers and perpetuates the cycle of abuse.

For compliance officers, tackling this issue involves fostering a culture where employees feel safe to speak up without fear of retaliation. Senior management must impose real consequences for middle managers who violate policies and ensure consistent disciplinary actions to reinforce the importance of compliance.

The long-term implications of such a dysfunctional culture are profound. Junior employees trained in an environment where rules are routinely ignored may carry these attitudes into future roles, potentially spreading unethical practices across the industry. For compliance professionals, it’s essential to address immediate issues and cultivate an ethical corporate culture that will yield trustworthy leaders in the future.

The situation at Bank of America serves as a sobering case study of the importance of comprehensive compliance programs and the need for alignment across all management levels. By understanding and addressing the root causes of such corporate culture failures, we can better safeguard our organizations and foster environments prioritizing ethical behavior and employee well-being. As compliance professionals, we must ensure that the lessons learned from BoA’s crisis are not ignored and that we remain vigilant in building and maintaining robust compliance frameworks.

Let’s hope that in another decade, we are not revisiting this same issue at BoA or elsewhere. Instead, all compliance professionals should strive for systemic improvements that prevent such tragedies and promote a healthier, more ethical corporate culture.

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Compliance Tip of the Day

Compliance Tip of the Day: Using Communications to Drive Speak Up

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 consider the role of communications in your entire hotline reporting system.

 

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

To check out The Compliance Handbook, 5th edition, click here.

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Compliance Into the Weeds

Compliance into the Weeds: Toxic Workplace Culture at Bank of America

The award winning, Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds!

In this episode, Tom Fox and Matt Kelly take a deep dive into the toxic workplace culture at Bank of America (BoA) around hours worked by junior employees, in spite of senior management saying the right things.

BoA’s investment banking division has long been plagued by a toxic work culture, characterized by overworked junior employees and severe health crises, despite repeated assurances of reform. Tom Matt discuss these pervasive issues within BoA’s work environment. Fox highlights the tragic consequences of this toxic culture, such as the deaths of junior employees, and criticizes the company’s failure to implement effective reforms, attributing this to a lack of accountability and ethical leadership. Kelly echoes this sentiment, emphasizing the necessity for senior management to set clear expectations and consequences for middle managers who perpetuate unethical behavior. Both stress the need for senior management to address the deep-seated cultural dysfunction, impose consequences, and foster a healthier, rule-abiding workplace to prevent further tragedies and promote employee well-being.

Key Highlights:

  • Toxic Workplace Culture at Bank of America
  • Proactive Controls for Preventing Employee Overwork
  • Consequences of Middle Managers in Corporate Culture
  • Cultural Impact: Negative Attitudes in Organizations

Resources:

Matt in Radical Compliance

How Bank of America Ignores Its Own Rules Meant to Prevent Dangerous Workloads, by Alexander Saeedy in the WSJ

 Tom

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Compliance Tip of the Day

Compliance Tip of the Day: Bank of America, Culture and Internal Controls

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 look at the recent report from the WSJ on Bank of America managers instructing junior employees to lie about the hours they work to avoid the 80-hour limit.

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

To check out The Compliance Handbook, 5th edition, click here.

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Compliance Tip of the Day

Compliance Tip of the Day: The Clash of Cultures

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 consider the role of compliance in the clash of cultures in a company, particularly through a merger.

 

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

To check out The Compliance Handbook, 5th edition, click here.

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Daily Compliance News

Daily Compliance News: August 15, 2024 – The $475MM in Fines Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee and listen to the Daily Compliance News. All from the Compliance Podcast Network.

Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

In today’s edition of Daily Compliance News:

  • More fines for failure to monitor employee text messaging.  (WSJ)
  • Boeing and the cost of culture failure. (NYT)
  • The former Trafigura COO is set for trial for failure to prevent corruption. (WSJ)
  • Big payday for shareholder lawyers in the Dell case. (FT)

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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Innovation in Compliance

Innovation in Compliance: Alan Saquella on Navigating The Complexities of Corporate Whistleblowing and Compliance

Innovation comes in many forms, and compliance professionals not only need to be ready for it but also 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 back Alan Saquella to discuss critical issues surrounding retaliation, whistleblowers, and fostering a speak-up culture within corporations.

Saquella, drawing from his extensive background in law enforcement, corporate compliance investigations, and academia, delves into the challenges middle managers face due to the fear of retaliation from senior leadership. The conversation also explores the ethical dilemmas in C-suite decisions regarding vendor and supplier selection, the mechanics and significance of whistleblower hotlines, and the crucial role of senior leadership in promoting ethical practices. Alan further emphasizes the importance of protecting whistleblowers and ensuring the effectiveness of compliance mechanisms through education, promotion, and a trust-centric approach.

Key Highlights:

  • Retaliation and Whistleblowers
  • Middle Managers and Ethical Dilemmas
  • Vendor and Supplier Selection Ethics
  • Whistleblower Programs and Confidential Hotlines
  • Role of Senior Leadership in Ethical Practices
  • Whistleblower Protection and Corporate Culture

Resources:

Alan Saquella on LinkedIn

Tom Fox

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