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Unconscious bias and psychological safety: How they affect compliance

Michael Bret Hood (21puzzles@gmail.com), a former senior-level FBI agent, is a professional trainer on financial crime, money laundering, ethics, and executive leadership development, based in Raleigh-Durham, North Carolina, USA.

Believing that you should have foreseen what happened is often referred to as hindsight bias. In the compliance world, this bias often surfaces after a corporate scandal or serious compliance violation. When such an offense occurs, executives and compliance officials look for answers to determine how the system failed and why the particular incident was not foreseen. In reality, noncompliance is not something that is predictable. Human beings are much too diverse in their behaviors to accurately predict when someone in an organization is going to deviate from established norms. Todd Haugh, assistant professor of business law and ethics at the Indiana University Kelley School of Business, writes, “Accurately predicting the probability and scope of compliance failures is more difficult than currently understood.”[1]

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