Ultimately, the key to any successful compliance program is in making that program an embedded and indistinguishable element of your company culture. Recent studies have shown that, now more than ever, employees are willing to step forward and report incidents of fraud and general misconduct. This is the first essential step in putting a stop to fraudulent activity within your organization, allowing you to identify and take on these problems at an early stage.
Also, as though handling fraudulent activity were not difficult enough already, new SEC regulations have implemented and incentive program. This new program, a result of the Dodd-Frank Act, grants large monetary rewards to individuals willing to report incidents of fraudulent activity directly to them, thus undermining an organization’s compliance and internal investigation programs, essentially taking away a company’s ability to monitor and regulate itself separately from government review. The only effective way for you to counteract this harmful new incentive is by making your own compliance program all the more effective and appealing.
However, before you can successfully implement a strong compliance program capable of embedding itself in your company culture, there are several steps that must be taken. Keep in mind that this is not a simple accomplishment which can be achieved through a single training program or company-wide email. To achieve success here will require a great deal of time and effort, but be assured that the struggle is well worth the gains.
To better help you put together a strong compliance program, one capable of achieving your desired goals, here are a few tips to help you get started.
- To begin, you will first need to openly acknowledge where the responsibility lies for any fraudulent activity that occurs within your organization. The truth of the matter is that the fault is with the executive officers. While some junior or mid-level employee halfway around the world may be the one actively committing fraud, it is the executive officers who are required to review and approve all financial and operational statements, verifying their authentication, and therein, it is the executive’s fault should fraudulent information go unnoticed and made public as fact.
- Unfortunately, there tends to be a very distinct tension between a company’s performance mandate and their compliance program, and effectively navigating between these two issues can be extremely difficult. In order to circumnavigate this political obstacle, it is important that those in charge of heading the compliance program maintain a good relationship with the executive officers and the board of directors so that when complicated issues arise, a lack of communication will not stand in the way of handling it.
- Having your message of compliance heralded from the upper echelons of your organization, not just through broad, impersonal methods, but with a face and a voice, can go a long way to showing your employees how important this matter is to the whole of your company. Encouraging your executive officers and board of directors to take on an active role in implementing your compliance program is an invaluable tool when it comes to illustrating this program’s importance to the rest of the organization.
- When it comes time to educate your employees about compliance, it is essential that you ensure that the front-line managers of your organization are extremely well versed on how to recognize and handle these situations. These are the employees that will be the most valuable to your compliance program, acting as your eyes and ears throughout the company as they oversee the day to day aspects of the business.
- Finally, do not wait for an actual incident to occur to find out just how difficult these situations can be to handle. Instead, take the time to simulate a compliance breach, giving your employees the opportunity to put their training to the test in identifying and reacting to an issue of misconduct. This grants you the opportunity to identify any weaknesses in your program and address them before something really does happen.
