10 ways to instil a culture of compliance

Written by Andrew Glover on Monday January 7, 2019

This blog is brought to you by Duff & Phelps - a global advisor that protects, restores and maximizes value for clients in the areas of valuation, corporate finance , investigations , disputes , cyber security , compliance and regulatory matters, as well as other governance-related issues.

Despite significant investment in compliance, we still see incidents where things go wrong. In many cases the root cause is the wrong culture and values. How do you drive the right culture across your organisation? How do you ensure everyone is accountable for compliance matters? Below we provide some tips to help support a successful compliance ‘change programme’.

1. Tone from the top
The best way to change and create an environment where compliance is a core value is having authority figures that lead by example. Help your leaders be genuinely engaged and motivated by doing the right thing. Provide your senior managers with key messages so they are always talking about compliance successes/changes with their teams and giving those key messages as part of their wider updates.

Timely internal actions from the top, whether it be reward or discipline, play a large part in influencing employee behaviour. Additionally, ensuring senior managers lead the way with completing their compliance training assists in setting the right tone and expectations.

2. Align your business strategy and objectives with your desired compliance culture
A compliance culture change programme will be undermined if your firm’s business strategy and objectives do not orient towards compliance. Ensure you as the compliance representative have a seat at the table when strategic objectives are set or new products designed so that you can work collaboratively with the business to develop compliant solutions.

If a senior manager is perceived to prioritise other performance measures over compliance measures, then this behaviour will be replicated across their team members. For example, if a highly profitable area receives an adverse audit report due to lack of compliance with regulations and yet this area receives further investment for expansion, this sets the tone that compliance is not a priority.

3. Integrate robust compliance outcomes into employee performance management
This helps ensure everybody understands the importance of compliance and that they are individually accountable for ‘doing the right thing’. This will also drive discussion around what contributions each individual can make. Lead by example and share your SMART compliance objectives and metrics with the wider organisation.

4. Ensure you have the investment to be successful
Often people will be asked to deliver change programmes as part of their daily activities with no additional investment for system solutions or resourcing. Take the time to build a robust business case demonstrating what investment you need to ensure that change happens smoothly and set yourself up for success.

5. Focus on a few critical messages and delivering engaging communications
Employees are constantly bombarded with new campaigns, changes and development. To help ensure your compliance messages stick, keep them simple and focus on a few critical messages which people can understand and relate to their work. Make sure you keep the communications tied to the vision, purpose and expectations. Additionally, do not be afraid of repeating key messages in different formats as this will help ensure everybody has heard and digested these key takeaways.

6. Celebrate positives already in place in your organisation
Before you start your change programme, take time to engage with the business and review what’s working, gaps and areas for improvement and examples of good practice aligned to the culture that you’re trying to create.

Build on what is already in place in the organisation and reward and celebrate these positives. Most employees come to work to do a good job; there will already be great examples of where people have gone the extra mile to ensure a customer is supported, and protected the company through doing what is right. Not undermining what is already being delivered will ensure your employees are motivated and engaged with this change.

Some firms will say ‘we have to do something because of the FCA/PRA’. This dilutes the sincerity of the message and can also encourage a tick box approach. Make sure the message is clear that the firm is accountable for delivering compliant outcomes and is committed to making the change as it’s the right thing to do.

7. Ensure there are formal as well as informal interventions
Too many times, change programmes are a series of formal interventions, where employees are told what is expected of them. Make sure there is a blend of informal and formal interventions.

Informal conversations establish a stronger connection and sense of trust between the compliance function and the employees. It can be tempting to hide yourself away in your office, but this will only reinforce the wrong culture. So be visible, engage with the business on a regular basis and get people talking about compliance.

The more people are encouraged to talk about compliance, the more this will support the change and build trust to report when things go wrong. Build quarterly themes of compliance topics and share these through both formal and informal channels. Some organisations have found that compliance champions, when embedded into the first line, can act as positive enablers for the change. Compliance champions can also provide you with constructive feedback as to how your change initiatives are working across the wider teams and whether they are being understood and embraced.

8. Make it personal
Training sessions are best when short, frequent and interactive. They should be engaging to an individual by showing how compliance affects their specific role. Where possible, utilise interactive ways of making compliance training more engaging; consider workshops, the use of actors, real scenarios, etc. to bring the topics to life. Use it as an opportunity to mix people from across teams so they can discuss the training topics and learn different approaches from outside of their normal ‘silo’ and spend time with different teams.

Be open, and encourage your senior leadership team to share personal stories where a compliance matter has gone well or not so well. Having an emotional connection with your employees will help build trust and a stronger belief in the change. Run workshops to hear interesting and authentic stories from other people or to improve the current compliance control environment together as a team. Celebrate compliance successes through senior management updates, newsletters and intranet/wall boards – even consider having a compliance week each year.

9. Monitor and measure the change
Hold yourself accountable for being honest as to how things are progressing and objectively measure success against your defined objectives and metrics. For example, are you seeing a decrease in customer complaints?

Consider using your employee survey to determine how successfully culture is being embedded. Foster collaboration between the compliance and the HR functions, since compliance is ultimately about employee behaviours.

10. Changing culture is tough but worth the effort
As you progress on your change journey, there will inevitably be bumps along the road – but don’t get disheartened: changing culture is a challenge and can take at least 12–18 months. It will take time to see results and making change stick is even harder.

Engage with senior management and the business, and keep listening to what people are saying. Learn and adapt when things don’t work and ensure your leadership team are always leading by example.

By sticking with your vision and making adjustments to the approach where needed, your business will benefit from being able to be agile and remain compliant. Good luck.

This article forms part of the #BigCompConvo - Join us as we explore and debate the latest challenges and issues facing you and regulatory and financial crime compliance professionals all over the world. If you’d like to contribute an article as part of the Big Compliance Conversation get in touch with us at [email protected]

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