compliance program maturity model

Compliance Program Maturity Model: How Do You Rank?

Jordan Feise
Jordan Feise

In many pursuits in life, it’s best to keep your blinders on and not get distracted by others’ performance. At times, it can be beneficial to focus on improving without comparisons. However, one place this logic does not apply is your compliance program. Your program needs to be constantly evolving in order to protect the business and the bottom line. To illustrate where your program stands, we’ve built a compliance program maturity model.  

The compliance industry is constantly changing thanks to external forces, including new regulations, updates to existing controls, and emerging technologies. On top of that, compliance officers need to consider internal changes, including headcount, fluctuating budgets, and shifts in organizational priorities. These internal and external factors directly impact how advanced your program is and should not be overlooked. 

Although no two compliance programs are the same (nor should they be), common challenges unite the industry. On the road to process optimization, many compliance teams lack strategic insights, have siloed processes, limited resources, high expectations, and rely on outdated solutions or deployment methods. To gain a better understanding of where your compliance program stands today, we developed The Compliance Program Maturity Model below: 

compliance program maturity model

Pillars of an Effective Compliance Program 

When building the maturity model, we landed on five critical elements that are strong indicators of a program’s development. Each of these elements impacts a compliance program’s ability to foster a culture of compliance, distribute compliance communications across the organization, and gain executive buy-in and support. Let’s dive into each of these factors to understand better how they hinder (or enable) compliance teams to be forward-looking and proactive. 

Defined Processes 

Compliance programs require many detailed and defined processes. How are conflicts of interest managed? Where can employees report potential wrongdoings? Who should be notified of changes in the supply chain? How do you onboard new vendors? Each of these compliance processes, and many more, should have well-thought-out and documented procedures. 

However, the real finish line is further down the road. In order to have an optimized program, employees and stakeholders must understand these processes. After all, you can build the best processes in the world, but if no one follows them, they have been created in vain. This point emphasizes how critical compliance communications are in achieving an effective program. You’ll also want to make sure that your processes evolve. Change is inevitable. The world, business climate, regulations, and your organization will all evolve. Your job is to ensure your compliance program grows with it to address the risks of tomorrow. 

Resources and Autonomy 

Having a well-resourced and autonomous program dramatically impacts its ability to be effective. Resources can be broken down into two main categories: human and budget. Does your team have the proper headcount to get the job done? Or are a few compliance professionals thinly stretched? Budget wise, compliance needs to be given the funding to protect the business. Ultimately, you want compliance expenses to be considered a critical line item in the budget. 

A compliance program’s autonomy is another critical indicator of success. The most mature compliance programs can operate as their own function within the organization and have the freedom to act in their own capacity. Your compliance team should be an independent function with the ability and reach to make changes without unnecessary oversight. For new compliance programs, this will not happen overnight but is, instead, a trust-building exercise with executive leadership to prove that compliance can drive impact and results from their work. 

Connected Technology 

Technology plays a large role in a program’s maturity. If a program checks all the other boxes (read: pillars of an effective program) but fails to automate their processes, it will fall short time and time again. The technology you choose to support your operations plays an integral role in the maturity of your program. With tools on the market today ranging from integrated compliance management (ICM) to siloed solutions, it’s essential to select the right technology. 

If your program is still developing, you will likely have some processes automated, but not all. Whistleblower hotlines and case management solutions are often the first implemented because they are mandated by legislation and are difficult to replace with manual options. The need for an anonymous reporting mechanism makes it almost impossible for enterprises not to have an investigations solution in place. 

In an efficient compliance program, all processes are supported by an automated system that removes friction, provides a single-source of record, and gives detailed reports on real-time analytics. Best-in-class programs take an integrated approach to their technology solutions. Rather than working with an endless number of vendors to accomplish their goals, compliance teams should select one platform to manage all of their compliance data. Having a single solution can do wonders for elevating the compliance function and provide you with a holistic view of your organization’s compliance efforts. 

Analytics and Reporting 

Gathering meaningful insights should be one of the primary objectives of every program. Compliance officers should be focused on mitigating risks across the organization and understanding where new ones are emerging. Insights such as “increased reports of misconduct since hiring a new regional manager” or “decrease in reporting since the new training went out” can be invaluable to understand what is going on within the organization and how compliance controls impact behavior. 

However, before compliance teams get to sit back and gather juicy insights from their program, they face the less sexy data collection task. In order to drive meaningful insights, all compliance data needs to be collected and analyzed in one system. Many teams begin this journey with data siloed in various compliance solutions and across departments. By transitioning to a robust analytics platform, like GANalytics, teams can harness data analytics’s real power to better inform decision-making. The most advanced compliance programs corral all their compliance data into one system and feed the information into real-time reports to conduct trend analysis. Compliance analytics and reporting enable teams to make confident, data-driven decisions about their program. 

Business Value

The business value of compliance programs is two-fold: the value compliance actually brings and its perceived value throughout the organization. In their infancy, most compliance teams start as reactionary problem solvers. Often compliance teams are initially expanded in preparation for going public, due to new or increased regulations, or (the worst-case scenario) because an investigation into misconduct at the organization has occurred or is currently underway. Due to the nature of these circumstances, initially, compliance teams might be focused on solving one specific problem rather than assessing the organization’s risks at large. 

More mature programs ensure compliance with regulations and take a proactive approach to mitigating risk throughout the organization. As the program evolves, the relationship that compliance has within the organization and its leaders should change as well. The compliance team needs to be trusted by top executives to lead risk, compliance, and ethics throughout the organization. The end goal is to become a strategic business partner who regularly presents at board meetings. Securing a respected leadership seat for the compliance function sets the emerging programs from the efficient ones.  

Improving Your Compliance Program’s Maturity 

To chart the best path forward for your compliance program, it’s essential to know where you are starting. Understanding your unique starting line will impact your strategy, priorities, and the resources you will need to build an optimized program. To help you assess where your program is today, refer to The Compliance Program Maturity Model. As discussed in detail, the model defines the critical areas your program should focus on to reach the desired optimized stage. Across each stage, rank where your current compliance program falls. Your program might be advanced when it comes to providing business value but still developing well-defined processes. 

By doing a self-assessment and taking inventory of where your program is today, you can identify the low-hanging fruit and come up with a plan to address your program’s most significant areas of growth. With that said, many of these pillars are not going to be transformed overnight or with band-aid solutions. Elevating each of these areas to the next level might be a lengthy process, but will reap the compliance program benefits in the end. 

If technology is one of the critical areas your program is looking to improve, our team of compliance experts would love to discuss your processes with you further. Our integrated compliance management (ICM) approach will unite all of your operations and bring your data together under one roof. Book a demo today to see why powerful yet flexible technology is the cornerstone of every efficient compliance program. 

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