Australia’s Royal Commission into the Financial Sector revealed the stark consequences posed to consumers and business confidence when businesses take a laissez-faire attitude toward risk management and regulation. Investigation found fractured communication, a lack of accountability, and operation outside of approved compliance risk to be rife within large financial institutions.
This is a high-profile case of what happens when companies lack a healthy compliance culture – where ethics are inconvenient barriers to business objectives, rather than a foundation internalized by all employees and embedded in every-day workflow.
Building a culture of compliance is paramount to avoid misconduct, white collar crime and safety violations which will cost your organisation further down the track. Costs associated with poor compliance have historically included:
+ $321 billion paid by banks in fines and settlements since the financial crisis
+ $25 billion in fines paid by a German car manufacturer for cheating emissions test
Building a healthy compliance culture can also be a source of competitive advantage – organisations will be more willing to work with trusted companies, and consumers more likely to buy from ethical organisations. It also has positive internal effects, such as improved employee loyalty.
It doesn’t have to be costly or even difficult to improve your compliance culture –a range of software is available that can be easily implemented throughout your HR processes.
- Selection: implement Psychometrics into your selection processes. Using Psychometric assessments such as the ProfileXT for your upper level talent enables you to construct high performance benchmarks based on the role models in your organisation – those leaders that consistently demonstrate not only high performance, but ethical and compliance driven behaviour. This will identify critical traits that predict ethical performance and behaviour, and therefore increase your propensity to recruit individuals oriented toward compliance and ethics.
- Onboarding: Providing compliance training to new recruits is essential to ensure they are up to scratch with all ethical and legal requirements in your organisation. This doesn’t need to be costly or time consuming – innovative training software such as Sentrient can be used to streamline and standardise your compliance training in a cost-effective, efficient manner.
- Consistent and Clear Communication. Maintaining a compliance culture requires healthy communication and participation in the office culture. However, employees may feel disinclined to speak up about potential compliance violations if their only outlet is face-to-face. Using survey software such as MultiRater Surveys and implementing a regular feedback schedule is the best way to provide a check on your compliance culture. It ensures all feedback is confidential, encourages regular and consistent communication and provides a check on managers and employees to behave in an ethical manner. This software can instantly generate reports and provides real-time updates, ensuring you can monitor and address any issues quickly before they manifest as a larger problem.
By using leading People Analytics and HR Compliance software, you can ensure your organisation operates in an ethical and responsible manner and facilitate a healthy compliance culture that all employees adhere to.
 Sehested, Thomas. “Creating A Culture of Compliance: Why All Successful Businesses Must Do This And Where To Begin. Forbes, 17 September 2018, https://tinyurl.com/y22thmgd. Accessed 8 October 2019.