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Good Compliance Habits to Adopt in 2019

By Matt Kelly (Updated )

In my last post, we looked at four bad habits in ethics and compliance that we should all leave behind with 2018. Now that a new year is upon us, let’s look forward — at several good compliance habits ethics professionals should adopt in 2019.

Keep your Code of Conduct simple

The business environment is only getting more complex, which means organizations are exposed to more and more risks. That, in turn, means your Code of Conduct can follow one of two paths. Either it becomes more complex too, crammed with more and more policies for each new issue that crops up — or you can make it simpler, dwelling on a few fundamental ethical principles that apply to your employees and third parties at all times.

My favorite example is Boeing, whose Code of Conduct is 341 words filling exactly one page. Yes, Boeing also has reams of policies for its myriad other issues, but they support the principles in the Code of Conduct. The Code itself is short and clear.

More organizations should emulate that very shrewd use of your most precious asset: employee time and attention. Otherwise, the risks and complexity out there will overwhelm them, and ultimately the business.

Innovate your compliance program

Banking regulators published a joint statement in December encouraging exactly this for anti-money laundering compliance — “implement innovative approaches,” such as new financial intelligence units or artificial intelligence to monitor transactions.

That’s welcome news, and compliance officers outside the banking sector should try innovation too.

For example, you could consider training programs that screen employees more quickly at the beginning of an online lesson, to route employees to the training modules most applicable to them. Maybe advanced analytics to identify weaknesses in the supply chain. Or, as the regulators suggested, perhaps AI can help filter out false positives in your transaction monitoring. (Lots of firms outside the banking world have AML compliance headaches too, after all.)

The point is this: try more innovation, if only to sharpen your organization’s skill at it. Launch pilot programs. See what works, what doesn’t, and what kinda works, that you can meld into your existing compliance program. Your ability to innovate better ways to do it is going to be a crucial career skill.

Strengthen your investigation protocols

This is a practical upshot of the #MeToo movement. Allegations of retaliation have soared, which means corporate investigations aren’t working the way they should: to determine the truth of a matter and hold a culprit accountable, rather than to shut down the people raising concerns.

Strong, clear, pre-existing protocols for conducting investigations can help because they let others see when an investigation starts drifting from “find the truth” to “silence the whistleblower.”

While we’re on the subject, compliance officers should also consider whether they need to improve training related to investigations. Managers need to understand what an allegation actually is, and to recognize when an employee is making one. (I wince when I hear tales of a manager overhearing one employee complaining about a serious issue to another, and the manager decides not to follow up.) People also need to understand what retaliation is, so they don’t engage in it or even give the impression that they are retaliating.

Keeping these ways to improve your compliance program in mind, let’s see what surprises 2019 has in store for ethics and compliance programs. Inevitably, the year ahead will keep compliance officers on their toes.

Matt Kelly

Matt Kelly is an independent compliance consultant and the founder of Radical Compliance, which offers consulting and commentary on corporate compliance, audit, governance, and risk management. Radical Compliance also hosts Matt’s personal blog, where he discusses compliance and governance issues, and the Compliance Jobs Report, covering industry moves and news. Kelly was formerly the editor of Compliance Week. from 2006 to 2015. He was recognized as a "Rising Star of Corporate Governance" by the Millstein Center in 2008 and was listed among Ethisphere’s "Most Influential in Business Ethics" in 2011 (no. 91) and 2013 (no. 77). He resides in Boston, Mass.

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