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Silos

Prevent The Danger of Silos with Mock Audits

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It’s an easy trap to fall into – becoming immersed in your department’s priorities can be like being engulfed by wheat, corn, etc. in an actual silo.  The result is an inability to see and recognize the other resources harvested at the same “farm.”  When resources collaborate though – they mitigate systemic risks. This is the time of year compliance officers should consider inventorying systemic risks and planning for the year ahead. One approach is to conduct a mock audit to test controls, help breakdown unhelpful silos and adopt best practices, particularly on the higher risk topics.

The Opportunities

Management often does not realize how compliance can contribute to sustainable business growth.  Consider what can happen when compliance isn’t integrated effectively.  If a compliance officer works in an organization where Compliance is not included in strategic initiatives until the last minute when there is not enough time to study the impact of the issues, inefficiencies grow as compliance or independent consultants audit and find control gaps after a new product is designed or new system is launched.  For example, time and money may be wasted marketing new products if a compliance officer is brought in too late to address issues. The product is already baked, so Compliance fixes are more likely to be bolted on instead of baked in. Product developers may not focus on avoiding conflicts of interest, self-dealing, and unfair expense allocations.  Recently, Deutsche Bank offices were searched as part of a money-laundering investigation, in the latest example of an allegedly siloed compliance culture because suspicious activity reports were not allegedly not handled as required.

The dangers of siloed compliance can be avoided with collaborative risk assessments and independent audits of the business including high-risk products and new technology. This approach will arm compliance officers, so they can help grow and sustain the business at the start of 2019. It will also serve as protection against any regulatory investigations into the adequacy of the compliance program.

Changing the Perception and Building Influence

To avoid the inefficiencies and disruptions of silos, the key is for compliance to become an influential participant in the business and develop metrics to illustrate its value-add.  Read my previous post on how to increase influence and play a more integrated role across the company.  Also, learn more about developing your skills and building Sustainable Governance within your organization by visiting www.bethhaddock.com

Networking

Networking: How and Why You Should Engage “Friends” (FOC)

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Trying to do anything of significance unaided is difficult, let alone provide protection, productivity, and impact to an organization. It’s why the most successful compliance officers and departments rely on their relationships in and out of the companies they work for.

Networking is a critical skill – one that will be as crucial to your success as a compliance officer as it potentially was to navigate your career thus far. As compliance professionals, it’s our job to be the “eyes and ears” of the company, prepared to offer preventative guidance and effective solutions when necessary. To do this successfully requires having a comprehensive view and understanding of the industry, business, and relevant stakeholders. That can’t be done alone.

Seek to establish a network of “Friends of Compliance” (FOCs) within your company that will provide diverse perspectives, identify issues – helping you build smart controls, and create effective alliances. Remember, a solo compliance officer will have a tough time making an organizational impact.

Building Your Network

Research shows there is a common behavioral pattern, called a social exchange, that compliance officers can leverage to help build their FOC network. Social exchange theory essentially states that through a series of interactions, employees build a state of reciprocal interdependence, which leads to mutually beneficial trust relationships.

Building this network will not only increase engagement in your compliance program – which will help achieve sustainable governance – these FOC will be able to highlight blind spots, operational challenges, and obstacles that lead to ineffective policies and controls. As you create programs and processes to provide protection, productivity and impact, your FOC will often become a source of information about business perspectives, strategy, and priorities. The result?  This network becomes a secret weapon, boosting diplomacy skills before important presentations or requests for resources. Time spent building an FOC network helps not only the organization, but your reputation as well.

Look at your compliance team as individuals strategically sprinkled throughout your organization, as well as key individuals outside of it. Leverage their different perspectives, skills, priorities, etc., to shape your approach to sustainable governance. Read more in my book: Triple Bottom-Line Compliance

compliance

Compliance Best Practices: Focus on The Means, Not Just the Ends

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Focusing on the end result is often what many compliance officers are concerned with.  If you get the result you want, that’s all that matters in the end – right? Not quite.  After all, so much rides on how you achieve the end result.

As a compliance officer, you likely wear a number of “hats” within your business. From change agents and business managers to quality assurance representatives, project managers, and therapists – each role plays a critical part in successfully doing your job of ensuring successful “end” results for the company.

A strategy for mastering these different roles – or for achieving any goal – is to focus on how it is to be done and done effectively.  As a compliance professional, consider how you advise, support, and contribute currently – are you maximizing your influence to get things done?

Ask yourself the following questions to see if you are leading with a focus on the “means” or the “ends”:

  1. Do you use fear of enforcement or fear of the government when challenged?
  2. Do you think what you say is more important than how you say it?
  3. Do you think Compliance issues are more important or more serious than business issues?
  4. Do you feel as though you are siloed or alone in your work?
  5. Do you identify issues that are “out of scope,” distancing yourself?
  6. When you innovate to support the business, do you exclude business ethics considerations?

If you’ve answered “yes” to any of these questions, consider whether you are losing an opportunity to be influential and make a more meaningful impact.

Becoming an Influencer

Building influence takes time. A fantastic place for compliance officers to start is with building trust by excelling as a project manager, tailoring surveillance to material business risks, and connecting with clients and those associated with your regulatory duties as a gatekeeper.

Trust won’t come automatically with your job title as a compliance officer; instead, an influential compliance officer makes an impact by earning the trust of the business while maintaining his/her gatekeeper role. Trust will be earned has you show knowledge of the regulatory landscape, listen to colleagues and develops approaches that meet current and future commercial or organizational needs.

The goal is to become more than just an advisor on legal issues. As MaryJean Bonadonna, CCO at AXA Advisors, believes: “Compliance has to be embedded—not just inserted.” When you become a true influencer, you’ll find yourself engaging on non-compliance issues such as business products, internal controls, or any number of other topics.

When we become influencers in our organizations, we can more effectively insert compliance within each element of the business – applying our knowledge, expertise, and anticipation of business or legal challenges, ultimately allowing the company to be effectively proactive.

In the end, ironically, it’s “the means” – how we achieve results through influence – not “the ends” that will create successful compliance within your organization.  The how is done with earned influence.  Learn more about becoming an influencer who focuses on “the means” by visiting, www.Bethhaddock.com

African American Businesswoman Giving Presentation To Executive

8 Elements for Effective, Sustainable Compliance Programs

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The end of summer and the arrival of fall marks a return to school and a regular schedule for our country’s youth. It also marks a return to a more traditional work schedule for many adults and perhaps most compliance officers.

And not unlike the turn of a new year, the return to school and work can be viewed as an opportunity to review, reconsider, and retool one’s approach to life, and to managing compliance.

With that in mind, compliance officers returning from summer vacation might consider taking a pause and consider ways to increase effectiveness and efficiency.

The following eight strategies, the core of my book Triple Bottom-Line Compliance: How to Deliver Protection, Productivity, and Impact, can be a catalyst for more effective and sustainable compliance programs. The present time is a great opportunity to learn about and apply the following eight key elements.

  1. Align – To achieve sustainable governance, take a longer-term approach. Look to align interests and incentives to win wider engagement and avoid repeated compliance deficiencies.
  2. Verify – Build trust-but-verify cultures using a Triple Bottom-Line Compliance System including
    • Protection: Surveillance to search for and find red flags
    • Productivity: Being analytical, looking at things holistically, connecting the dots, and knowing business patterns as well as individuals’ traits
    • Impact: collaborating with others in the organization to double-check any findings to make sure they reflect a real or potential compliance breach and if so, going directly to the source of the risk as an advisor and an educator
  1. Serve your Client – Build strong relationships and possess superior communication skills. Compliance Officers that are also business leaders, strategists, project managers, and influencers are able to get more done for their clients.
  2. Network – The day-by-day workflow of questions, issues, projects, and resolutions may lead to conflicts of interest and a crisis. Manage your professional brand and reputation.
  3. Build legal alliances – The Legal department can provide important and strategic relationships but it’s up to the compliance officer to keep them on board with Triple Bottom-Line Compliance. A compliance officer must think ahead, educate lawyers, and advocate for taking a longer-term view when needed.
  4. Master diplomacy – Master be diplomacy and understanding many different stakeholders. Be the resource not only finds problems but fixes issues.
  5. Be your true north – “True North Ethics” means there is an authentic fit for a compliance officer within an organization. Align with and believe in the culture, the organization, and the business efforts you serve. Without such an alignment the compliance officer may be too focused on protection and may struggle to lead the rest of the organization regarding positive business ethics when faced with conflicts of interests.
  6. Brand yourself and contributing – Act like a leader and be perceived as one who builds relationships with FOCs, lawyers, and regulators while delivering Triple Bottom-Line Compliance. A strong compliance officer should be clear, definitive, and decisive but may only be so after listening to, collaborating with, and explaining why the regulatory requirement is as it is.

These eight strategies are part and parcel of the “Circle of Compliance.” The circle demonstrates the way a compliance program can protect and add value.

You can learn more about the Circle of Compliance and how to implement it in your own compliance practice in my book Triple Bottom-Line Compliance: How to Deliver Protection, Productivity, and Impact. Click here to download chapter 5 about the power of Networking, for free.

After you read the chapter, don’t forget to apply what you learn and take advantage of your existing and growing circle of influence at back-to-school events, fall parties, and other environments where your positive influence can be felt.

To learn more about how you can innovate with compliance, contact my office today. If you would like to read about my philosophy and how to support business growth so there is measured and informed risk-taking, here’s a look inside my book.