COMPLIANCE: THE NEED FOR SPEED
As well as adequate decision-making capabilities, there is one other thing that business leaders need from their compliance department: speed. Similar to a race car, a business is in a fast-paced competition, and to be successful in this race, quick, precise decisions are required.
Moreover, to support a business, a compliance department has various tasks to perform, including: (i) developing an efficient ethics and compliance system; (ii) setting up a system in relation to business needs; and (iii) providing instructions for ‘drivers’.
These steps should be based on continuous risk assessment. To continue the motorsport analogy, a company must know if it wants to participate in a slick, structured Formula 1 race (i.e., undertaking business in a low-risk country) or in a rough, gritty World Rally Championship race (i.e., undertaking business in a high-risk country).
Another lesson from motorsport may also be considered: a race car can be optimised primarily for either speed or reliability. Due to limited resources (such as budget and time), a business leader must focus on one. Based on the results of a risk assessment, the compliance officer has to make a decision accordingly. If a compliance system is implemented because the company has been investigated or fined for regulatory failings, then reliability must be emphasised. Speed, in contrast, may be achieved through reduced bureaucracy.
Responsibility for compliance with values and regulations rests with senior management. As an expert, the compliance officer has to train management, but also needs to go further. All employees are important, so tailor-made training should be provided throughout the company. Similar to motorsports, ethics and compliance is not only a topic of preparation, but also of control. Imagine the ethics and compliance department sitting in the pit, monitoring the race car’s performance using a dashboard of technology tools.
Oct-Dec 2022 Issue
Patrick Henz