6 Tips for Developing a Culture of Compliance

6 Tips for Developing a Culture of Compliance

Compliance culture is a critical part of any organization’s success, regardless of its size, industry, or location. Companies prioritizing compliance programs are better equipped to manage risk, protect their brand and reputation, and maintain trust with clients and relevant stakeholders. Creating a compliance culture takes time and strategy, so we put together a list of tips to help you develop yours.

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Key Takeaways

  • A culture of compliance forms the values, attitudes, and behaviours that guide employees, managers, and other parties to adhere to compliance policies.
  • Non-compliance can harm an organization, leading to financial, legal, and reputational ruin.
  • A lack of a solid foundation for compliance strategies can lead to your program’s downfall.
  • Tips for developing a culture of compliance consider factors that include leadership, communication, training, transparency, tools, and commitment to growth.

What is a Culture of Compliance?

A culture of compliance is a set of values, behaviours, and attitudes that guide people in your company to adhere to policies, procedures, and regulations. In this corporate culture, everyone at all levels, including external stakeholders, must understand the importance of jurisdiction laws, industry regulations, internal policies, and general ethical values.

Culture ultimately provides a foundation that shapes employee actions and decisions, which can make or break the long-term success of your business.

How do You Measure its Effectiveness?

It can be challenging to measure the effectiveness of your compliance culture because it’s not easy to quantify. Many factors contribute to its success, so the best way to gather data is to zero in on the most relevant metrics to your organization. For example, some companies use the following techniques:

  • Tracking of compliance training completion
  • Reviewing the number and magnitude of compliance incidents and violations
  • Conducting interviews with supervisors
  • Running focus groups or surveys to gather feedback on employee perception of the corporate culture
  • Using independent auditors to assess the organization’s compliance policies

These metrics can help companies understand the effectiveness of their code of conduct and other internal policies and make improvements where needed.

What is the Cost of Non-Compliance in Corporate Culture?

Non-compliance in corporate culture can have significant reputational, legal, and financial costs for organizations. For example:

  • Violation of laws can result in fines and legal action, including imprisonment.
  • Compliance failure can also impact an organization’s ability to conduct business. For instance, a company’s breach of specific regulations may lead to loss of licenses, suspensions, and reduced revenue.
  • Code of conduct and ethical scandals can diminish customer, investor, and stakeholder trust.
  • Overall reputation may tarnish, leading to the downfall of an organization.

Why Do Some Compliance Programs Fail?

The main reasons for compliance program failures center around poor planning, strategy, dedication, and execution of policies. There are various ways that your attempt at creating a culture of compliance may fall through the cracks. For example, it may lose effectiveness if:

  • There’s a lack of understanding of the importance of compliance in the first place.
  • Senior management does not show support or lead the initiative by example.
  • There’s poor communication and training on expectations and consequences.
  • There’s inconsistent monitoring, testing, and enforcement of procedures.
  • You fail to adapt to changing regulations or risks.

Creating a Culture of Compliance in Your Organization: 6 Tips

Creating a corporate culture that prioritizes high standards of behaviour and ethics can be challenging. However, as mentioned above, the costs of non-compliance could be detrimental to your organization's future. Building compliance programs and fostering the culture around them requires careful planning and consistent monitoring and review. To help you get started, tips for developing a culture of compliance include the following:

1. Start with Leadership

Management and other organizational leaders set the tone, which trickles down to employees. Their clear, enthusiastic commitment to compliance is essential. These leaders should communicate the importance of regular compliance and hold themselves and those around them accountable. Leading by example is one of the best ways to perpetuate this culture.

2. Develop and Communicate Clear Policies and Procedures

You can’t lead compliance initiatives without clearly outlined action plans. Policies and procedures should be straightforward, concise, and easily accessible in a code of conduct, which you should communicate consistently. For example, frequent email communications or verbal discussions about expectations should be a priority in your organization.

3. Invest in Training

It’s crucial to make training engaging, interactive, and tailored to the organization and interdepartmental needs to help employees understand the importance of compliance. This education should be ongoing, repeated periodically, and updated to align with new laws, regulations, and industry best practices.

4. Prioritize Continuous Improvement

Just as you would expect your employees to strive for continuous improvement, it’s essential that your company also looks internally to assess areas to change and grow. Compliance programs should not be static. They must be regularly reviewed and updated to remain practical and relevant. Maintaining a dynamic compliance program includes:

  • Keeping up to date with changes in regulations and industry standards.
  • Being open to feedback from employees and other relevant stakeholders.

5. Foster a Speak-Up Culture

A key part of compliance is allowing employees to feel comfortable raising issues and reporting violations without fearing retaliation. This means creating a culture that encourages open and transparent communication and providing the means for employees to voice their concerns. One way to do this is to adopt an ethics helpline, which allows people to report anonymously.

6. Use Tools that Prove Your Commitment to Compliance

As mentioned above, failure to have sound plans and processes for your compliance program can lead to its downfall. One way to reduce this possibility is to invest in tools that allow you to monitor concerns and organize workflow for risk management. Compliance case management systems enable sophisticated ways to stay on top of your corporate culture.

With technological advancements and businesses growing their operations across the globe, your tools must also expand to keep up with all the moving parts. Using these resources shows your commitment to policies and procedures and demonstrates to everyone in your organization that you take compliance seriously.

It’s Time to Prioritize Your Compliance Culture

At WhistleBlower Security, we have various tools and services to help you monitor and track multiple metrics related to your organization’s compliance culture. For more information on how to create an effective corporate culture, reach out to us today.

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photo Amanda Nieweler
About the Author
Amanda writes for WhistleBlower Security about ethics, compliance, workplace culture, and whistleblower hotlines. Amanda brings her nearly two decades of risk and compliance experience to the WBS blog where she is dedicated to helping people and companies promote speak-up cultures.

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