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Compliance Tip of the Day

Compliance Tip of the Day: Fostering a Culture of 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.

Today, we explore how the DOJ has placed significant emphasis on encouraging a culture where employees feel comfortable reporting misconduct.

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Blog

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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Blog

Bank of America’s Corporate Culture Crisis: Part 4 – A Tale of Metrics and Misalignment: Lessons for Compliance Professionals

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. In Part 4, we consider a misconnection of metrics. This issue is not merely a question of productivity but a fundamental concern about corporate culture, ethics, and long-term sustainability.

In corporate governance and compliance, aligning business metrics and ethical obligations often defines a company’s culture’s success or failure. The recent Wall Street Journal (WSJ) article about BoA and its investment banking metrics sheds light on a crucial disconnect that compliance professionals must address: the disparity between business performance indicators and employee well-being.

At the heart of the issue is the nature of the metrics used to evaluate success in different industries. In investment banking, the primary focus is often on closing deals. The logic is straightforward: deals drive revenue, and revenue drives the bottom line. This singular focus on deal-making creates an environment where the end justifies the means, potentially overlooking the toll it takes on employees.

Conversely, in law firms, the metric of success is often billable hours. Lawyers are compensated and promoted based on the number of hours they bill, which can lead to a different, yet equally problematic, set of behaviors. Over-inflating hours or working excessive hours becomes the norm because that is the path to career advancement.

Both systems create perverse incentives: investment bankers might underreport hours to avoid raising HR flags, while lawyers might overreport hours to enhance their career prospects. These behaviors highlight a crucial point for compliance professionals: the metrics set at the top of an organization inevitably shape the behavior throughout the company.

One of the first steps in addressing these issues is understanding the available data and how it is used. Compliance professionals must ask themselves, “What data do we have, and how can it be used to monitor and manage risks effectively?” By focusing solely on deal closure, companies are potentially neglecting data related to employee well-being, such as hours worked or stress levels.

In contrast, law firms have systems that track the minutiae of an employee’s workday, from time spent on tasks to keystrokes made during document review. This data is invaluable for billing clients and identifying patterns that may indicate overwork or burnout. Compliance professionals in investment banking could learn from this approach, using technology to track hours worked or monitor workload distribution, ensuring that employees are kept within reasonable limits.

The core issue is more alignment between business metrics and corporate culture risks. Compliance professionals must ensure senior management acknowledges overwork as a significant risk and takes proactive steps to monitor and mitigate it. This involves tracking the traditional success metrics and implementing metrics that reflect the company’s values and culture.

For example, if overwork is recognized as a risk, metrics such as average hours worked, employee turnover rates, and employee satisfaction surveys should be regularly monitored and reported. This dual approach allows a company to pursue business success while ensuring its corporate culture remains healthy and sustainable.

The responsibility of aligning these metrics rests not solely with middle management, compliance officers, or senior management; it extends to the board of directors. The board’s oversight role is crucial in ensuring that the company’s culture is preserved in pursuing financial success. For boards everywhere, the recent scrutiny BoA received in the WSJ article serves as a lesson.

Board members must go beyond the surface level of management reports and delve into the realities of the workplace culture. This requires more than attending board meetings in luxurious settings and listening to pre-prepared presentations. It involves engaging directly with employees at all levels, understanding their challenges, and prioritizing their well-being.

A practical approach could involve the board requiring regular reports on employee well-being metrics, mandating internal audits focused on workplace culture, or even conducting anonymous employee surveys to get an unfiltered view of the corporate environment.

An effective compliance program also hinges on creating a culture where employees feel safe to voice their concerns. A speak-up culture is essential in identifying issues before they escalate into major risks. Management and the board should encourage employees to report inconsistencies between policy and practice and take these reports seriously.

For instance, if employees consistently report working beyond reasonable hours, this should trigger an investigation and subsequent action from the board. Such feedback mechanisms help identify risks and reinforce the company’s commitment to ethical practices.

Lastly, when issues do arise—such as the tragic death of a young employee in the Bank of America case—the board should conduct a root cause analysis. This analysis should not be limited to the immediate cause but should explore deeper systemic issues that may have contributed to the incident.

A comprehensive root cause analysis might reveal that the focus on deal closure at the expense of employee well-being is not an isolated issue but indicative of a broader cultural problem. The board could use this analysis to implement changes across the organization, ensuring that similar incidents do not occur in the future.

The lessons are clear: the metrics that companies use to measure success are powerful drivers of behavior. The challenge for compliance professionals is ensuring that these metrics align with business goals, ethical standards, and employee well-being. This requires a proactive approach, leveraging data to monitor business performance and corporate culture. It also requires a board that is engaged, informed, and committed to understanding the realities of the workplace.

In the end, compliance is not just about preventing legal and compliance risks but about fostering a corporate culture that values integrity, transparency, and the well-being of all employees. By aligning 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: 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 Tip of the Day

Compliance Tip of the Day: Sharing Information

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, explore what makes employees want to share information, or in compliance parlance, ‘Speak Up’.

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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FCPA Compliance Report

FCPA Compliance Report: Erica Salmon Byrne on Closing The Speak Up Gap

Welcome to the award-winning FCPA Compliance Report, the longest running podcast in compliance. In this edition of the FCPA Compliance Report, Tom Fox welcomes back Erica Salmon Byrne to discuss the recently released Ethisphere 2024 Ethical Culture Report: Closing the Speak Up Gap.

They explore the genesis and findings of the report, focusing on the eight pillars of ethical culture and significant insights derived from data collected since 2020. Key topics include the importance of equipping managers to handle employee concerns, generational and tenure-based discrepancies in reporting misconduct, and the persistent issues of retaliation and employee dissatisfaction with the current reporting mechanisms. Additionally, Erica shares practical strategies for compliance teams to address these challenges and enhance their ethical culture.

Highlights in this Episode

  • Genesis of the 2024 Ethical Culture Report
  • The Eight Pillars of Ethical Culture
  • Key Insights: Closing the Speak Up Gap
  • The Role of Managers in Compliance
  • The Tenure Smile: Willingness to Speak Up
  • Strategies for Improving Reporting
  • Ethisphere’s Future Plans and Masterclass

 Resources:

Erica Salmon Bryne on LinkedIn

2024 Ethical Culture Report: Closing the Speak Up Gap

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

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

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Daily Compliance News

Daily Compliance News: April 3, 2024 – The What is Insider Trading 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 in 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:

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

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program Through Culture: Day 14 – How Investigative Triage Can Drive Culture

One area that organizations rarely consider impacting culture is the assessment and triage process in a hotline or speak-up process. A proactive approach allows for increased response time and the ability to set realistic expectations for stakeholders, but this is a key component for improving corporate culture. One mechanism not thought of by compliance professionals is the setting of service level agreements (SLAs) to set response times based on the nature of the allegation. This concept, borrowed from customer service practices, ensures that employees who come forward with complaints or allegations are provided with a clear understanding of the expected timeline for response and communication. By setting these expectations, organizations can foster a culture of open communication and trust.

Obviously, a triage process is particularly important for multinational companies that operate across different regions. With varying compliance programs and regulations in different countries, having a well-documented process becomes essential. It allows compliance departments to navigate the complexities of compliance programs and investigations, ensuring consistency and adherence to local laws.

The triage process and technology play a vital role in promoting a corporate culture. By proactively assessing and triaging complaints and allegations, organizations can increase response time and set realistic expectations for stakeholders. It is important to consider the impact on employee rights and the need for thorough investigations when making decisions about the importance of the triage process and technology in organizational compliance.

 Three key takeaways:

1. Think about how your triage process can be used to foster culture.

2. Set Service Level Agreements, make them public, and adhere to them to engender trust in your organization.

3. However, it is important to recognize the tradeoffs involved in balancing different factors when implementing a triage process.

Do you want to improve your culture? How can you assess your culture and develop a strategy to improve it going forward? In this free webinar on the new tool, The Culture Audit with Tom Fox and Sam Silverstein on Tuesday, November 28, 12 CT. For more information and registration, click here.

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program Through Culture: Day 13 – Preventing Retaliation to Improve Culture

Retaliation against a person who speaks up is a pervasive issue that not only creates a toxic work environment but also discourages victims from reporting incidents. This means you must address retaliation and encourage reporting in workplaces. When employees report harassment face severe retaliation, which leads to a loss of trust in the reporting process. This fear of being labeled a “rat” or “gossip” often prevents victims from coming forward and seeking justice. To combat this issue, non-retaliation protocols are crucial to protect individuals and ensure legal compliance.

Non-retaliation protocols must be in place to encourage reporting.  The fear of retaliation is deeply rooted in the perception of being a whistleblower or complainant. Every compliance must have strong policies, consequences for violators, and open workplace conversations to empower bystanders. Bystanders play a crucial role in identifying and reporting harassment, but they often fear retaliation or loyalty conflicts.

Addressing retaliation and encouraging reporting in workplaces requires a multifaceted approach. Strong non-retaliation protocols, open workplace conversations, and the empowerment of bystanders are key factors in creating a safe and inclusive work environment. By prioritizing the well-being of employees and fostering a culture of trust, organizations can effectively combat sexual harassment and ensure compliance with legal and regulatory requirements.

 Three key takeaways:

1. You must have robust policies and procedures against retaliation.

2. A lack of confidential reports will have an impact on culture.

3. Bystanders are the key to a robust culture.

Do you want to improve your culture? How can you assess your culture and develop a strategy to improve it going forward? In this free webinar on the new tool, The Culture Audit with Tom Fox and Sam Silverstein on Tuesday, November 28, 12 CT. For more information and registration, click here.

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program Through Culture: Day 10 – Improving Culture Through Investigations

Meric Bloch strongly emphasizes the importance of workplace investigations and fostering a culture of employee compliance. He believes that merely setting up a hotline and establishing policies is insufficient; companies must actively engage with employees to understand their motivations for speaking up or remaining silent. Bloch also underscores the need for accountability and a critical evaluation of the effectiveness of compliance programs. His experiences with multinational companies have shaped his understanding of the challenges they face, particularly the fear of being perceived as incompetent and the difficulties in reporting.

One of the key points raised by Bloch is the importance of making speaking meaningful and credible. He pointed out that companies often fail to communicate what should be reported, leading to confusion among employees. Bloch also highlights the lack of follow-up interviews and training for reporters as a problem. He stressed the need for organizations to engage with reporters and gather additional information to better understand the context and potential gaps in the initial report. Bloch also discussed the importance of addressing friction points within organizations. He mentioned that employees often hesitate to speak up due to concerns about the involvement of headquarters or fear of retaliation. Organizations must actively address these concerns and create an environment where employees feel safe and supported when reporting issues.

To create a culture of speaking up, organizations must move beyond passive measures such as hotlines and policies. They need to actively engage with employees, educate them about their role in the process, and provide clear guidance on what should be reported. By doing so, organizations can foster a culture of compliance where employees feel empowered to speak up and contribute to maintaining ethical standards.

Three key takeaways:

1. Your investigation process must go beyond simple policies and procedures.

2. Seeking additional information from a reporter will enhance the investigative process and your culture.

3. Remove friction points in the speak-up and investigative processes.

Do you want to improve your culture? How can you assess your culture and develop a strategy to improve it going forward? In this free webinar on the new tool, The Culture Audit with Tom Fox and Sam Silverstein, on Tuesday, November 28, 12 CT, For more information and registration, click here.