Keynote speaker Hui Chen—an ethics and compliance consultant, writer, and advocate—provided the Compliance Week 2019 audience with valuable insight into tomorrow’s compliance landscape and the critical challenges being faced today. They main thrust of her speech was that programs need to be goaled around demonstrating their effectiveness—not that the right boxes have been checked. “Paper programs” are no longer sufficient.
“To be effective a compliance program must be fully operationalized with documented evidence of effectiveness.”
- New risks: there’s been a proliferation of new risk areas, not just new regulations. Who’s in your supply chain, human trafficking laws, and #MeToo all pose potentially serious threats and compliance concerns that the whole company needs to be aware of.
- Big data: the troves of data held by most companies are nearly always siloed, with a firewall between it and the compliance function, forcing the compliance function to generate its own data. This is causing gross inefficiencies and ballooning costs.
- Effectiveness: the 2019 guidance from the Evaluation of Corporate Compliance Program emphasized the need to demonstrate effectiveness in training, risk assessment, leadership conduct, and more. “To be effective a compliance program must be fully operationalized with documented evidence of effectiveness.”
- Polarization: the increasing polarization in society is causing more than communication issues, but has lead to strains in corporate cohesion and and increasing number of public employee initiatives. Firms like Google, Microsoft, and Amazon have all found themselves in the spotlight recently due to employees raising a variety of concerns.
Chen identified three areas to focus on for future compliance challenges.
- Multiple risk integration: compliance teams need to expand their functions to address ever more interconnected risk and legal areas, such as corruption, anti-money laundering (AML), discrimination, data protection, and trade sanctions.
- Holistic view: connecting the dots through data extraction, harmonization, and visualization is critical for getting the whole compliance picture and developing holistic programs.
- Metrics: measuring the outcomes of a compliance program, its effectiveness, requires shifting from an accountability orientation of whether a box is checked to a goal orientation. Success isn’t an employee participating in compliance training, it’s an employee integrating that knowledge into their business operations.