A culture of compliance is usually referred to as an environment that enables and encourages compliant behavior. More than just a buzzword, “compliance culture” represents the future of corporate compliance and ethics programs. Regulators, legal scholars, and businesses around the world are urging financial institutions to develop a culture of compliance that is aligned with external laws, internal policies, and increasingly, ethical values. An article by the International Compliance Association claims that ‘Compliance culture, especially in financial services, is a really important element that can impact on the wider cultural challenges that a firm could face’.
Building a compliance culture
Building a compliance culture across an organisation can be quite complex since the market, industry, risk profile and corporate governance of the organisation may differ from others. As a result, organisations need to leverage and incorporate different elements to achieve a culture of compliance. To create a culture of compliance, an organization’s leadership needs to emphasize the importance of compliance. Also known as a “tone at the top,” this simple message to stakeholders is critical and is often found in internal policies and code of conduct. Additionally, the Management of an organization plays a critical role in implementing a culture of compliance. Senior management can create policies, but the way day-to-day operations are run are vital to a compliance culture and set good examples for good practices.
Another vital element in creating a culture of compliance is to ensure that compliance is the responsibility of everyone. Too often, compliance failings have been shown to occur in businesses where profits and shareholders’ interests have been prioritized over those of other stakeholders. There have also been cases of stakeholders being at loggerheads with each other since they are often viewed as opposite ends of the business. As a result of which, it is vital for an organisation to ensure that every stakeholder work towards the same goal: effective, results-focused financial performances that do not risk regulatory breaches.
Furthermore, another crucial element of a compliance culture is periodic training for all directors, officers, relevant employees, agents, and business partners. The trainings should cover policies, procedures, and relevant laws that relates with ethical decision-making and include prohibited behaviors. The organisation should also ensure that everyone, especially the Compliance Officer is fully up to speed with the latest requirements. The organization may also carry out employee assessment on a regular basis and ensure that compliance is tied to compensation. Such steps would motivate employees to learn, adhere and incorporate policies and practices into their everyday duties and to avoid any form of breaches.
Lastly, another effective step of building a culture of compliance is having clear processes for reporting any compliance breaches. Non-compliance mistakes are likely to occur often within an organisation. As a result, the organisation should make sure there are adequate measures to identify breaches and address shortfalls. Organisations should also be willing to discipline employees who violate policies, procedures, and regulations.
How can Temple Consulting assist you?
Temple Consulting Ltd can assist you in the implementation of your compliance culture. With a team of professionals with niche expertise in legal and compliance matters, we are experienced in drafting organization’s policies and procedures manuals as well as ensuring that same are in line with the latest regulatory requirements.
Additionally, our sister company, Temple Professionals Ltd, provide tailor-made in-house training as well as public courses on various compliance related matters.
To know more, kindly get in touch with us on (+230) 210 3588 or templeconsulting@templegroup.mu
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