Compliance & Ethics in the Year 2020

Compliance and ethics is not the same today as it was a few years ago, and it’s safe to say that it will continue to evolve in 2020.

In the past, compliance and ethics was distributed and disconnected. The result was a maze of processes, reporting, and information. Compliance functions spent more time managing the volume of documents than it did actually managing and improving compliance.

Compliance and ethics today is in the midst of transformation.  The pressure upon organizations is requiring them to rethink the approach and role of compliance across the organization.  The organization is looking for greater compliance effectiveness while being more efficient with human and financial resources.

What do these many factors, trends and forces suggest for the future of ethics and compliance?

In 2020, Compliance will no longer be the ‘corporate cop’ as it shifts to focus on the integrity of the organization. Compliance and ethics are becoming how we do business as opposed to obstacles of business.  As with any transformation – the road of change will have speed bumps. Change is inevitable.  The business environment – along with the risk and regulatory environment – is constantly changing.  This will force ethics and compliance to evolve to meet organizational requirements for corporate integrity throughout the business and its relationships.

Compliance operations will become federated to overcome the inefficiencies of the decentralized approaches of the past.  While compliance and ethics oversight is centralized under the role of a CECO with stronger executive and board relationships, the islands of compliance scattered throughout the business will begin to coordinate and work together under the leadership of the CECO.  It will not be a completely centralized organization as there are many domains of compliance that work best with business operations and close to the “coal face” of the organization, but compliance information, activities and processes will be coordinated across these departments.

The Shift to a New Ethics and Compliance Information-Based Architecture

All of the above trends point in one clear direction, toward a new ethics and compliance architecture that is dynamic, proactive and information-based. That is, a new model for ethics and compliance that:

  • Is aligned with stakeholder demands for transparency and accountability;
  • Functions as a strategic partner with leadership;
  • Takes full advantage of emerging technologies to improve efficiencies; and
  • Will allow ethics and compliance practitioners to better target their resources.

This shift enables the ethics and compliance organization of tomorrow to have greater efficiency in processing and managing information, effectiveness in ensuring corporate integrity, and agility in addressing rapidly changing business, regulatory, legal and reputational risks. In particular, this new architecture will transform every one of the current elements constituting an ethics and compliance program. Codes, policies and training will all be changed. For example:

  • Risk management. Ethics and compliance will have an active seat at the table of risk management.
  • Code(s) of conduct. A standalone code will be a thing of the past; employees will have an interactive code environment.
  • Policy and procedure management. Similar to the code, policies will be accessed in a user-friendly environment through a portal aligned with the organization brand.
  • Training. As a result of the interactive policy management portal, learning management and delivery of training will be an integrated part of the portal itself and not require disconnected platforms to be integrated.
  • Monitoring & assessment. The ethics and compliance department will have access to data-mining and benchmarking resources that will allow for predictive modeling and serve as a tool for targeting training, security and mitigation efforts.
  • Investigations.  The organization will have a single system to record and capture issues, incidents, and events that integrate with helplines.
  • Change management. Ethics and compliance will be able to integrate processes and technology with information from content providers to rapidly assess changing laws, regulations, and developments around the world and understand how they impact policy and the integrity of the organization.
  • Mobility. There’s an app for ethics & compliance! Ethics and compliance will embrace mobile technology on tablets and other devices to do: issue reporting; deliver policies, training, and other interactive content; and, conduct investigations, audits and assessments.
  • 3rd-party management. Across the range of the items above, ethics and compliance will more effectively manage and communicate integrity across its business relationships with vendors, suppliers, distributors, outsourcers, contractors, consultants, service providers and temporary workers.
  • Metrics and benchmarking.  With a strong information architecture integrated with external content, the ethics and compliance organization will have an optimized infrastructure to report on metrics, trends and benchmarking to track performance and how it is aligned with business strategy and execution.

As with any transformation, the road of change will have speed bumps. Some individuals are naturally resistant to change.  They like the consistency of knowing they have mastered their field and find comfort in performing the job the same way they have in decades past. But change is inevitable. The business environment—along with the risk and regulatory environment—is constantly changing.  This will force ethics and compliance to evolve to meet organizational requirements for corporate integrity throughout the business and its relationships.

I would love to hear your thoughts on compliance management yesterday, today, and tomorrow . . . please comment below.

No comments yet.

Leave a Reply