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Behavioral Studies and Compliance

I am not a cynic when it comes to looking at the latest “fads” in compliance.  Please do not get me wrong.  Compliance is a fast-evolving field that is quickly moving beyond the limited perspective of legal into a new territory, coined by Donna Boehme (here), the subject-matter expert (“SME”).

Donna has a great point – lawyers and other professionals cannot just willy-nilly decree themselves as compliance experts.  There is a real profession that depends on a blending of skillsets to bring about effective ethics and compliance program management.  It is a profession and an expertise all to itself – as it grows and as more people move into the profession, new compliance officers bring perspective, expertise and one key ingredient – experience.  In other words, the best teacher here is experience.

One of the new purported magic bullets for compliance professionals is “behavioral studies,” a term that encompasses a variety of social research.  Some of this research is good and helpful, and some of this research is just plain obvious, reinforcing profound grasps of the obvious.

My observations or hesitance here is meant to make sure that compliance professionals as SMEs do not get subsumed or sucked into the latest “rage” when it comes to compliance.  No matter how you  wrap it up, or how you try to define the compliance profession, it will always be a blend of skillsets, comprising a blend of subject area: legal, management, statistics, accounting, communications, behaviors, economics and perhaps philosophy.

From my vantage point, there is plenty of room for professionals with all types of skillsets to contribute to the compliance profession.  One is not better nor exclusive of the other.  Each perspective is valuable, and each offers benefits to the ultimate goal – design and implementation of an effective ethics and compliance program.

Behavioral studies, however, that reinforce common sense are valuable to hear but do not necessarily advance the ball.  For example, I have heard or read about studies that confirm the following principles:

  • The Slippery Slope – organizations that tolerate or ignore so-called “minor infractions” are more likely to experience significant compliance misconduct.

My response is pretty clear – of course we know that.  Even as a prosecutor, we were well aware of the “broken windows” theory of enforcement suggesting that petty offenses that are ignored breeds a culture or environment in which more significant offenses are likely to occur.

Let’s try another:

  • Senior Manager Conformity – When senior managers engage in misconduct or are known to do so, mid-level managers and employees are more apt to “conform” or “model” their behavior to the senior manager.

My response — well of course, if there is a culture of senior manager misconduct, others in the organization may follow suit, notwithstanding their personal ethical values in the interest of “conforming” to the example and/or secure organizational benefits (tangible and intangible) from conforming with the examples set.

Hopefully, you are getting my point.

On the other side of the equation, there are valuable “studies” that demonstrate the connection between ethical cultures and conduct, rates of misconduct, sustainability and profits and other organizational objectives.

In the pure behavioral context, I found fascinating those studies where persons when given a specific set of rules can “cheat” the system to earn immediate and valuable benefits.  To me, the interesting results of these studies are that participants often “cheat” at the margins and usually rationalize such cheating as “not such a big deal” or “I am entitled to it.”  These studies, in my view, perhaps because I was a federal prosecutor for so long, provide insights into people who engage in misconduct and their thinking patterns.

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  1. November 23, 2018

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