Today, we look at the Compliance Function. The pandemic accelerated changes in compliance that have been percolating for the last few years. Indeed, I believe that in as short a time as 5 years, 2020 will be seen as an inflection point in compliance, IE., the Year When Everything Changed. There are four major changes I would like to highlight and what these changes portend for compliance down the road.
Compliance Convergence. In 2019, there were three significant releases of information by the federal government, which directly impacted compliance professionals.
Public/private partnership in the anti-corruption fight. Over the past few years, the DOJ has gone far toward laying out real incentives for corporations to help in the fight against the international scourge of bribery and corruption.
Data, Data, Data. The DOJ has made it clear that it expects companies to be more robust in their use of data analytics in compliance programs.
Compliance as the Ethical Edge. We have known for many years that companies with more robust compliance programs were most generally better-run companies.
This academic research and other case studies demonstrate that effective compliance programs equate to more efficient business processes and lead to greater profitability. As senior business leaders come to understand this message, they will (properly) see compliance as a business process that can be analyzed and improved through continuous improvement to make companies run more efficiently and, at the end of the day, more profitably. These companies do not make money because they have a better heart. They are more profitable because they are better run. Finally, all of this ties back to a requirement from the DOJ for continuous improvement of your compliance program.
Three key takeaways:
- It’s all about compliance now.
- Compliance connectedness.
- It’s all about the data.
For more information, check out The Compliance Handbook, 4th edition, here.
