1. Gain Support and Commitment
Board of Directors or Governing Committee Support
Effective compliance programs require oversight from the governing board. Support from the top is very important; there can be no program at all, much less an effective one, without the vision and guidance of the board. It is the board that officially recognizes the need for a compliance program and authorizes its launch and implementation, including the recruitment and retention of a compliance officer. An organization with an effective compliance program will have a culture of accountability and a demonstrated commitment from management through its communication to the organization. Depending on the organization, a resolution or memo from the board stating its unequivocal support for the program is a strong beginning. (See Appendix A.10 Sample Board of Directors Resolution.) In some organizations it might come from the chairman of the board, in others from the CEO. Whatever the source, board endorsement must be in a written format; it must communicate unqualified support for and commitment to the compliance process and ethical business behavior; and it must be effectively communicated to everyone.
One option is for the chairman of the board, CEO or most senior leader to distribute the memo or resolution to all business unit leaders. The business unit leader then distributes the document to managers so that everyone gets this message and it is reinforced so that everyone in management endorse the compliance program. This approach also makes the compliance program directly accessible to staff and gives staff an opportunity to discuss the document in relatively small groups. A special department or unit meeting to discuss the program and distribute the letter can lend weight to the message, or it can be an agenda item for a regularly scheduled meeting. Any discussion with staff, will give staff an opportunity to ask questions and understand the program purpose and goals.
Moreover, the board’s role does not end with agreeing to establish a compliance program and distributing a letter of support—nor does its responsibility. Ongoing, visible support from the board of directors is crucial. Board oversight of the compliance program includes their accountability to understand and assure that management implements an effective compliance program that assists the organization to prevent and deter wrong doing. When the board takes compliance seriously, that sense of importance will be known throughout the organization. Your board may need guidance in understanding the importance of compliance. They may not immediately recognize that “doing the right thing” provides a cultural tone of compliant and ethical behavior and that compliance is a good, long-term investment. The board of directors or governing committee, meeting infrequently and not always aware of day-to-day operations, can be insulated from problems. In the case of compliance, however, the board must understand the implications of not taking active measures to prevent potential wrongdoing. They should be educated about the potential for liability. Cases such as the U.S. Caremark International Derivative Litigation (though U.S.-oriented, the governance principles are applicable to most organizations), have reinforced the boards accountability and responsibilities in understanding the company’s efforts to prevent and detect fraud and abuse. It is in the best interest of the organization to have the board take an active rather than a passive role in compliance.
Management plays an influencing role in making compliance work with support expressed in a variety of ways. Attendance at educational programs may not be something that you can make mandatory for everyone except senior management. Making time to demonstrate a personal commitment is helpful to demonstrate to the organization that there is commitment to “doing the right thing” and raising issues/concerns to be addressed. Training will provide support and tools for managers to discuss the content with staff either at a regular department meeting or as circumstances permit, one-on-one.
Supervisors or managers also must lead by example, for actions speak louder than words. A manager cannot encourage employees to report questionable behavior and then give special treatment to a friend. Once a potential concern is reported, the non-retaliation policy must be followed. It is up to management to make sure employees do not hesitate to come forward with their compliance concerns without fear of retaliation.
“Tone in the middle” is very important for an organization’s culture. While the top leaders may be supporting the compliance efforts, if there is no follow through and incentives built in for middle management, the culture will fail in its efforts for an effective compliance program.
Day-to-day responsibilities of managers to be aware of compliance issues is an important obligation of the manager role. Managers and supervisors must closely follow news and information from their professional organizations and pass along compliance-related issues to the compliance office. The compliance officer is encouraged to proactively and routinely ask managers and supervisors what new regulations are developing in their fields.
Professionals Support – Building “Champions”
Certain industries revolve around key professionals who hold influential positions in the organization. Examples of key professionals in select industries include physicians in health care, engineers in building, attorneys in legal, programmers in computer science, investigators in research, et cetera. These individuals play key leadership roles in their industries. Frequent situations will arise where one of these individual’s support can make all the difference in creating a true culture of compliance. It is thus to your advantage to find a key professional champion—someone who understands and supports the mission of the compliance program and who will back you up when needed. Moreover, this professional can be a model of how employees can effectively incorporate compliance into their other job functions without distracting from the performance of their actual duties and without consuming unacceptable amounts of time. This key professional can advocate compliance in several ways:
Emphasize operational and fiscal improvements gained through compliance
Provide data to support compliance activities and improvements
Build trust through involvement
Be a partner, not a dictator
Cultivate the early adopters and enthusiasts
Communicate, communicate, communicate.
The earlier you achieve professional buy-in the better. Invite professionals to compliance implementation committee meetings and actively seek their input throughout the start-up—and beyond. Many organizations have a strong professional presence on their compliance committees. If possible, consider having a professional chair the compliance committee. When funding permits, sending a key professional to a compliance conference can provide valuable education as well as increased awareness and additional support. Achieving professional buy-in will be an important challenge, but it is a critical to launching an effective compliance program.
Mistakes happen. When we detect mistakes, we need to address the mistake so it doesn’t reoccur. In launching a compliance program, staff will need to be convinced that looking for problem areas is not the sole responsibility of the compliance office—it is everyone’s job. Education is the first step to take, but also look for ways to heighten awareness on a day-to-day basis. Organizations will distribute items such as cups or pens with a compliance slogan and the organization name or logo to launch their compliance program. Everybody loves something for free, and if the budget permits, these items can increase awareness and foster cooperation.
Staff buy-in will be directly related to the organization’s ability to foster an environment of trust. As emphasized earlier, accepting the non-retaliation policy will be the best way to ensure active staff participation. Rewarding and thanking those who come forward to report an issue will provide immediate positive feedback to staff and will offer a long-term reward for the compliance program overall.