Empowering ethical champions in compliance is a key to success
The significance of ethical conduct and adherence to regulations cannot be overstated. From the C-suite to the warehouse, companies are tasked with the challenge of managing a variety of ethical perspectives across departments and keeping up with a complex, ever-changing regulatory landscape.
As Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it.” This highlights the crucial role compliance plays in protecting brand value and trust, as unethical or non-compliant behavior can result in hefty financial penalties, legal repercussions and lasting harm to a company’s reputation.
In this recap of an executive brief from last year's Modern Governance Summit (now Elevate), we discuss compliance and senior leaders' responsibility in establishing and maintaining a culture of ethics and compliance, reporting compliance to the board effectively and how collaboration between audit and compliance can foster a strong risk management function and more.
You can download our full brief to experience last year's insights in more detail.
Building a culture of compliance: A foundation for ethical decision-making
In today’s business environment, where competition is fierce and trust is critical, organizations must prioritize ethical conduct and compliance to protect their reputation and ensure sustainable growth. Compliance professionals play a critical role in fostering a culture of compliance within organizations, ensuring adherence to laws and regulations and promoting ethical decision-making at all levels.
Establishing a robust compliance culture requires a concerted effort, with the organization's highest echelons — its board of directors and C-suite executives — taking a lead role. This necessitates active support for compliance initiatives, the demonstration of a visible commitment and the consistent enforcement of ethical standards. Clear communication of compliance policies, coupled with comprehensive training and a strict zero-tolerance stance on violations, is indispensable in fostering an environment of integrity.
Engaging leadership for ethical excellence
Compliance leaders cannot be expected to single-handedly foster a culture of compliance. The senior leadership is crucial in setting the tone and establishing an environment that upholds ethical conduct. This requires clear and compelling communication about the significance of compliance, as well as the demonstration of commitment to laws and regulations.
Encouraging a culture where employees feel secure in reporting concerns is also vital. Leaders must further support the compliance team by providing the necessary resources, cultivating a collaborative work setting, and ensuring that compliance is seamlessly integrated across all organizational operations.
Effective compliance reporting to the board
Board members play a critical role in overseeing compliance efforts and ensuring the organization's adherence to ethical standards. Compliance leaders must prioritize providing board members with accurate, relevant and consistent information on compliance performance. Board reports should focus on key performance indicators, emerging regulatory issues, policy updates and risk mitigation strategies.
Cindy Moehring, Former COO of Walmart and Current Founder & Executive Chair of Pyxus Inc., emphasizes the importance of explaining the difference between a compliance program and legal advice to the board. By presenting compliance information effectively and engaging board members in regular discussions, organizations can enhance decision-making and strengthen their overall compliance posture.
“It’s all about what the numbers say – the story behind the numbers needs to be explained. The story isn’t a one-time event – it’s a book with multiple chapters, and it’s your job to update the board on the chapters and the story. The art of reporting compliance to the board is linking the pieces together.” - Cindy Moehring, Former COO of Walmart and Current Founder & Executive Chair of Pyxus Inc.
The synergy of audit and compliance: Fostering collaboration for stronger risk management
Compliance and internal audit teams must work closely together to protect the organization from regulatory risks and brand damage. Traditionally, compliance teams focused on preventing legal violations, while internal audit teams specialized in identifying financial misconduct.
However, this siloed approach has become less effective in addressing the evolving compliance landscape. By adopting an integrated risk management (IRM) strategy, organizations can break down silos, streamline processes and enhance collaboration between compliance and audit teams. This integrated approach improves data accuracy, enables comprehensive risk assessments and facilitates better decision-making.
Leveraging technology to empower ethical champions in compliance
At last year's conference we discussed that technology plays a vital role in supporting compliance efforts. Governance technology platforms, such as Diligent, centralize risk and compliance data, automate workflows and provide real-time insights into compliance performance.
To read more on this and learn more practical tips, download our guide to Cultivating compliance champions: Empowering ethical decision-makers in the workplace.
Eager for the latest insights?
Join us for Elevate 2024 (formerly Modern Governance Summit) in Houston this September 8-11, 2024. As the premier gathering for industry leaders, innovators and governance experts, this year’s summit aims to equip administrators, governance professionals and board members with insights and expertise on how to use our solutions effectively to thrive in an ever-evolving landscape.
Whether you represent a multi-national or a public sector agency or a nonprofit organization, Elevate 2024 promises to be a transformative event that will leave a lasting impact on your institution. This is your once-a-year opportunity to elevate your governance and learn about the Diligent One Platform designed to help you easily centralize your entire GRC practice with a suite of governance, audit, risk and compliance solutions.
Register today to secure your spot at Elevate 2024.
