Getting to Know You, Getting to Know All About You — Business Buy-In to Compliance Functions (Part III of IV)
We all know that a compliance program without business buy-in is, by definition, an ineffective compliance program. The level of business support ranges from “mouthing” support to full-fledged embrace and ownership of compliance program controls. By “mouthing” support, I am referring to business staff who say they understand compliance, use the right words reflecting an understanding of compliance issues, but they fail to attend to, embrace or advance compliance issues.
When it comes to “operationalizing” compliance, a meaningful commitment from business staff is critical. The challenge is to explain why compliance is relevant to business staff who are dedicated to promoting sales, manufacturing, and other revenue- generating activities. From the business perspective, compliance is viewed as a cost center separate from business activities.
To counter this perception, senior management and compliance have to explain how compliance increases revenues, promotes the company’s reputation, and can be used as a sales advantage in a competitive marketplace. Successful and sustainable businesses understand the importance of an ethical culture and a commitment to compliance. Business staff need to understand this value and have to embrace senior management’s expectation that the business commit to promote ethics and compliance.
If the CEO understands the importance of ethics and compliance, a CCO is often successful in building business buy-in. In the absence of CEO support, however, the CCO’s job is difficult, if not impossible. A CCO cannot carry the burden of building a culture of ethics and compliance without the support of senior management, and in particular the CEO. A CCO can talk till he or she is blue in the face but the message and importance of ethics and compliance will not stick without more support and commitment from the CEO and senior managers.
Even with the support of the C-Suite, a CCO has to build bridges and convince middle managers and other business players that compliance is critical and can be leveraged for an advantage in the competitive marketplace.
Customers, suppliers, vendors and other outside parties are increasingly focused on minimizing potential risks by interacting with companies committed to trust and integrity. A company that suffers from a poor reputation for ethics and compliance will have greater difficulties in the marketplace, resulting in lower revenues and sales performance. These are not controversial ideas.
A sales employee looks to promote any advantage the company may have against its competitors. CCOs have to communicate in a similar manner that the company’s commitment to ethical practices includes its business practices. A trustworthy business partner is a valuable relationship in today’s marketplace, especially where competitors may be cutting corners or avoiding compliance issues in the hopes of securing business.
To support this effort, a compliance officer should look to developing compliance materials (on-line and documents) that can be used by sale personnel to include in sales pitches and materials. As part of competitive tenders, bidders are required to produce materials concerning their compliance programs.
If a compliance officer builds the competitive advantage idea with the business, the compliance officer has to educate the sales staff on their obligations to preserve and promote the company’s ethical culture, reporting on employee misconduct and ensuring that company policies and procedures are followed.
A compliance officer and the business have a two-way relationship – they each have expectations from the other that are needed to promote the company’s compliance program while securing commercial advantages in the marketplace. If explained in this fashion as a win-win proposition, compliance and business can become lasting friends in the corporate governance landscape.