Complaints can often be symptomatic that information provided by the organisation is either:
Inadequate;
Doesn’t meet its users’ needs;
Is not visible;
Is difficult to access;
Is not written in plain language ;
Is not in a readable format; or
The format in which information is presented ( e.g. does it look like junk mail )
There are a number of essential elements or guiding principles an organisation should consider to ensure that there is effective communication/information on an ongoing basis regardless of the type of organisation. These include:
VISIBILITY:
how easy is it for consumers to find the sources of information? Accessibility: how easy is it for consumers to access the information? For example, are there multiple means of access such as phone, email, websites etc?
USABILITY:
This means having information provided in such a way that it is more useable and useful to consumers. Consider:
Making documents as short as possible;
Leaving out extraneous material;
Highlighting critical information;
Organising information in a logical way e.g. cascading the story from the simple to the more detailed;
Providing clear navigation around the document;
Using plain and direct language; and using a range of communication tools, including simple graphical illustrations.
FEEDBACK:
This means setting on place systems to receive information on customer information needs and on visibility, accessibility and usability on an ongoing basis.
Of course complaints are one way to tap into consumer needs but it is not the sole means. A complaints handling system that conforms to Quality Management: Customer Satisfaction--Guidelines for Complaints Handling (AS ISO 10002) should be established. Data collection and analysis can pinpoint where consumers have been misled, misunderstood or confused about information. When these inadequacies have been identified, rectification action can be undertaken.
One way to obtain feedback on these essential elements on an ongoing basis is to establish feedback mechanisms within the organisation made up of people with the necessary communication skills.
Feedback relating to current information needs may be obtained from sources including:
Customer feedback arrangements
Discussions with consumer groups & external dispute resolution providers
Staff
Regular management checks/monitoring Audits,
Complaints
Research
Customer feedback arrangements: these could include customer focus groups, or customer satisfaction surveys.
Discussions with consumer groups & external dispute resolution providers: consumer groups and industry Ombudsman have valuable data on information needs, format and accessibility issues.
Staff: feedback from staff, particularly customer contact staff, can come through the regular use of focus groups with expert facilitation. Another method of getting staff feedback is through the use of internal survey questionnaires.
Regular management checks/monitoring: regular checking and monitoring, such as mystery shopping, can ensure that information is meeting the essential elements.
Audits: audits undertaken by independent auditors can evaluate the performance of the information process. The audit could be undertaken as the Quality Management System audit where these exist.
Research: Processes for continuous improvement of information requirements and processes need to be set in place.
Continuous improvement activities could come about by:
Keeping abreast of best practices in both related and other industries, locally and overseas.
Membership and involvement in the activities of organisations that promote communication excellence.
Having a research and development mechanism for discovering current consumer information needs, material preparation and delivery
Having the appropriate technology to assist in discovering current consumer information needs, material preparation and delivery
Employing people who have experience and commitment to the continuous improvement of customer information and its delivery.
Employing lateral and creative thinkers.
Having a system in place for identifying process inadequacies on an ongoing basis with a view to ongoing process improvement. Encouraging innovation in information development, procedures and processes.
Given the extent of an organisations customer base and the need to keep them informed an organisation may want to consider employing an information designer. Information designers create and manage the relationship between people and information so that the information is accessible and usable by people. Such a person could:
Not only design information but also be responsible for implementation and monitoring management of information over the long term.
Ensure accessibility of information. The term accessible in this context covers ‘findability’. Accessible has another implication, one of inviting people in, being welcoming, open and approachable.
Ensuring that the information is usable.
Providing evidence that the information is accessible and usable to an agreed high standard.
Sunday, 6 September 2009
Sunday, 23 August 2009
Complaints handling: The importance of staff selection in call centres
The tragedy of the death of 17-year-old schoolboy David Iredale, who died of thirst after becoming lost in the Blue Mountains on a bushwalk, hit home to me the importance of culture and staff selection in call centres. It seems that the failure of triple-0 to respond in any useful or compassionate way to his calls of distress was a major factor in his death.
The Ambulance call centre manager told an inquest into David’s death that apathetic, uncaring, dismissive attitudes were prevalent in the Redfern emergency call centre at the time, and this had been like a "disease" in the organisation.
For me the incident raises two important questions about call centres: what sort of selection process do call centres have to hire people with a helpful and caring attitude and what do call centre do to foster a caring and helpful culture?
These two questions are critical in the area of any call centre because, firstly, if complaints made by phone are not handled properly they can escalate and, secondly, a mere inquiry could morph into a complaint. An organisation’s reputation can rest on how well calls are handled and, in a competitive environment; it could mean the difference between winning over and maintaining customers.
Selection Process
As the above tragic incident starkly shows there is a need to have a selection process to hire staff who are empathetic. Some of the things worth thinking about when hiring staff include employing those with:
Besides selecting the right people they need to have the right skills. Consider the following, for example:
Culture
Talk to anyone about the thing they dislike most about call centres and the major response will be long connection times or failure to connect quickly to a “talking head”.
Many of the problems consumers have with call centres come about from what I call an “inside-out “approach by the organisation and not an “outside-in” approach. By that I mean that some organisations organise their call centre around their needs and not those of their customers. With a bit of lateral thinking they could meet both their needs and those of their customers.
One wonders how much analysis is done of calls to call centres to determine the information needs of customers and see how much this in turn could result in information being placed on the website and such information being visible, accessible and easy to follow. The term accessible in this context covers ‘find-ability’. 'Accessible' has another implication, one of inviting people in, being welcoming, open, and approachable. It’s all about engagement. So if customers have an attractive and responsive alternative there will be less need to ring call centres and perhaps shorter connection times.
Long connection times seem to suggest to me:
While these matters could be dealt with by better management and resources one should never underestimate employing experienced people who have an excellent knowledge of the organisation, and its product and services as a quick and efficient way of dealing with customers.
Another aspect about culture is what I call “tone at the top”. Operators take their cue from the leadership of the company. If the organisation is not caring or putting a value on empathetic dealing with calls this will be reflected in the way operators deal with customers.
The Ambulance call centre manager told an inquest into David’s death that apathetic, uncaring, dismissive attitudes were prevalent in the Redfern emergency call centre at the time, and this had been like a "disease" in the organisation.
For me the incident raises two important questions about call centres: what sort of selection process do call centres have to hire people with a helpful and caring attitude and what do call centre do to foster a caring and helpful culture?
These two questions are critical in the area of any call centre because, firstly, if complaints made by phone are not handled properly they can escalate and, secondly, a mere inquiry could morph into a complaint. An organisation’s reputation can rest on how well calls are handled and, in a competitive environment; it could mean the difference between winning over and maintaining customers.
Selection Process
As the above tragic incident starkly shows there is a need to have a selection process to hire staff who are empathetic. Some of the things worth thinking about when hiring staff include employing those with:
- Good interpersonal skills including the ability to empathize with complainants.
- Enthusiasm for, and commitment to, an efficient, effective and fair complaints–handling system.
- Good communication skills, including being a good listener.
- A thorough knowledge or the capacity to quickly acquire knowledge of the organization’s products and structure, and a sense of pride and commitment to the company’s mission and values.
- An ability to assess objectively all relevant factors about the inquiries/complaints from the view of the customer/complainant and the company.
- The ability to handle stress in a calm and polite manner, and to be able to diffuse a customer’s anger.
- A positive outlook on life.
Besides selecting the right people they need to have the right skills. Consider the following, for example:
- Greeting Skills: Offers to help during the call ( A simple “How can I help you?”)
- Does the operator sound interested in what the caller has to say and empathetic to the caller’s needs?
- Does the operator engage the caller?
- Is the operator a good listener?
- Was the operator able to deal with the issue or give a reasonable response?
Culture
Talk to anyone about the thing they dislike most about call centres and the major response will be long connection times or failure to connect quickly to a “talking head”.
Many of the problems consumers have with call centres come about from what I call an “inside-out “approach by the organisation and not an “outside-in” approach. By that I mean that some organisations organise their call centre around their needs and not those of their customers. With a bit of lateral thinking they could meet both their needs and those of their customers.
One wonders how much analysis is done of calls to call centres to determine the information needs of customers and see how much this in turn could result in information being placed on the website and such information being visible, accessible and easy to follow. The term accessible in this context covers ‘find-ability’. 'Accessible' has another implication, one of inviting people in, being welcoming, open, and approachable. It’s all about engagement. So if customers have an attractive and responsive alternative there will be less need to ring call centres and perhaps shorter connection times.
Long connection times seem to suggest to me:
- an understaffed centre
- an understaffed centre during peak periods
- longer times to deal with customers because of the nature of the goods and services on offer
- combination of some or all of the above.
While these matters could be dealt with by better management and resources one should never underestimate employing experienced people who have an excellent knowledge of the organisation, and its product and services as a quick and efficient way of dealing with customers.
Another aspect about culture is what I call “tone at the top”. Operators take their cue from the leadership of the company. If the organisation is not caring or putting a value on empathetic dealing with calls this will be reflected in the way operators deal with customers.
Collegiality and its role in compliance
For compliance to work effective compliance managers (or those responsible for compliance) should form strategic alliances with key people within their organization. The effectiveness of an organization’s compliance program can be greatly enhanced if the compliance manager identifies and uses those in the organization who can assist with the skills required to run an effective compliance program.
The development of a compliance policy is an important aspect of any compliance program so the compliance professional needs to ascertain the extent to which compliance will be integrated with other support functions such as risk, audit and legal.
Identification of compliance obligations and translating regulation into operational procedures:
In-house legal staff, where they exist, can not only have a role in systematically identifying the organization’s compliance obligations for the compliance manager but also to provide timely advice to the manager of any relevant changes to laws and regulations.
Such staff can also provide valuable assistance to compliance staff in “translating” regulatory requirements into understandable practices and procedures to be undertaken by operations staff.
Ensuring that procedures are readily understood is about an exercise in effective communication. Staff in marketing, corporate affairs, HR and public relations, including in-house journalists, have the skills sets available to also assist in this enterprise.
Risk assessment and risk management:
Prior to the implementation of its compliance program an organization should identify compliance risks and rank the likelihood and consequences of potential compliance failures and allocate resources for their treatment accordingly.
Compliance Managers can seek assistance from the risk management section/risk professionals for assessing regulatory risks. Besides risk and compliance professionals being involved in this exercise, legal and audit can also add value to the process. Legal staff can not only assist in looking at regulatory requirements but also are well placed to advise on the likelihood of compliance failure occurring and the consequences for non compliance (e.g. fines, damages). Audit professionals can take on an advisory role on the adequacy of controls based on their observations and the need for the frequency and rigour of auditing such controls.
Monitoring:
An Internal auditors’ role is to objectively check controls to ensure that they are robust and, if not, to recommend changes. Compliance professionals should tap into these skills when designing their monitoring programs. It makes sense to use the internal audit skills to undertake independent reviews particularly where there are areas of high regulatory risk based on previous experiences in the organization or observations of regulatory activities being conducted on others in the same industry as your organization.
Organization should design, develop, implement and maintain procedures for seeking and receiving feedback on its compliance performance from a range of sources including customers, e.g. through a complaints handling system. Many organizations have complaints handling sections but these may not be located in the compliance area or have any connections with compliance. Having some mechanism with the complaints handling staff to tap into the compliance implications of complaints would assist in achieving this outcome.
Communication:
Organizations should adopt multiple methods of communication to ensure that the compliance message is heard and understood by all employees. The communication should clearly set out the organization’s expectation of employees and those issues that need to be escalated, under what circumstances and to whom.
With communication being identified as an important aspect of any compliance program it not only makes sense to have a communication plan but also have communication professionals involved in both the design and delivery of communicating the compliance message.
The development of a compliance policy is an important aspect of any compliance program so the compliance professional needs to ascertain the extent to which compliance will be integrated with other support functions such as risk, audit and legal.
Identification of compliance obligations and translating regulation into operational procedures:
In-house legal staff, where they exist, can not only have a role in systematically identifying the organization’s compliance obligations for the compliance manager but also to provide timely advice to the manager of any relevant changes to laws and regulations.
Such staff can also provide valuable assistance to compliance staff in “translating” regulatory requirements into understandable practices and procedures to be undertaken by operations staff.
Ensuring that procedures are readily understood is about an exercise in effective communication. Staff in marketing, corporate affairs, HR and public relations, including in-house journalists, have the skills sets available to also assist in this enterprise.
Risk assessment and risk management:
Prior to the implementation of its compliance program an organization should identify compliance risks and rank the likelihood and consequences of potential compliance failures and allocate resources for their treatment accordingly.
Compliance Managers can seek assistance from the risk management section/risk professionals for assessing regulatory risks. Besides risk and compliance professionals being involved in this exercise, legal and audit can also add value to the process. Legal staff can not only assist in looking at regulatory requirements but also are well placed to advise on the likelihood of compliance failure occurring and the consequences for non compliance (e.g. fines, damages). Audit professionals can take on an advisory role on the adequacy of controls based on their observations and the need for the frequency and rigour of auditing such controls.
Monitoring:
An Internal auditors’ role is to objectively check controls to ensure that they are robust and, if not, to recommend changes. Compliance professionals should tap into these skills when designing their monitoring programs. It makes sense to use the internal audit skills to undertake independent reviews particularly where there are areas of high regulatory risk based on previous experiences in the organization or observations of regulatory activities being conducted on others in the same industry as your organization.
Organization should design, develop, implement and maintain procedures for seeking and receiving feedback on its compliance performance from a range of sources including customers, e.g. through a complaints handling system. Many organizations have complaints handling sections but these may not be located in the compliance area or have any connections with compliance. Having some mechanism with the complaints handling staff to tap into the compliance implications of complaints would assist in achieving this outcome.
Communication:
Organizations should adopt multiple methods of communication to ensure that the compliance message is heard and understood by all employees. The communication should clearly set out the organization’s expectation of employees and those issues that need to be escalated, under what circumstances and to whom.
With communication being identified as an important aspect of any compliance program it not only makes sense to have a communication plan but also have communication professionals involved in both the design and delivery of communicating the compliance message.
Wednesday, 22 July 2009
Changes to the law make a compliance management system an imperative
In a warning delivered by the chairman of the ACCC, Graeme Samuel, at a meeting of the American Chamber of Commerce in Sydney on 9 July he indicated that serious cartel conduct will, after 24 July, be viewed by the Australian Competition and Consumer Commission as criminal and will consequently expose company executives to prison terms of up to 10 years.
He went on to add: “You do not fix prices, you do not rig bids, you do not allocate customers. This is the kind of conduct which could expose your client to gaol. The ACCC will use the full force of the law to bring you to account, either financially or through incarceration."
Under the new law, serious offenders would be jailed and, in addition, potentially face a fine and/or be banned from being a company director or company manager for life.
Furthermore, a business could be subject to fines of up to $10 million, or three times gain, or 10 per cent group turnover – whichever was the highest.
It has been my experience that breaches of the competition law can occur out of ignorance or the willingness to take risks.
Having a total sales target driven culture bereft of any warnings about the need for compliance to be maintained can send staff signals that ‘all bets are off’ as to how they achieve sales targets. Some top managers engage in ‘dog whistling’ - in that they profess support for competition law compliance but at the same time send signals that they are indifferent to how sales are maintained. A good example of this occurred in a recent cardboard box price-fixing case and is summed up neatly in the following extract:
Sacked Amcor chief Russel Jones put pressure on executives to collude with Visy, according to one executive’s record of interview with the Australian Competition and Consumer Commission.
The transcript, part of which has been obtained by The Australian Financial Review, reveals that Peter Brown, former managing director of Amcor Australia, told the ACCC in 2005 that Mr Jones had “[taken] me to task in front of the board about the low prices in corrugated boxes and how it was the most important thing to ensure the success of the business, so I felt extreme pressure to get prices up.”
Asked whether Mr Jones had said “go out and collude”, Mr Brown replied: “No, not at all, no no, and it would not have been appropriate for him to say that in those terms anyway. But I was very, very clear in my own mind what he was looking for.”
ACCC general counsel Robert Alexander asked: “When you say you are clear in your own mind what he is looking for, he was looking for increased prices, was he?”
“Yes, and the only way to get those was essentially to collude with the competitor,” Mr Brown replied.
“I think that was everyone’s view. I don’t believe anybody who was involved in the business had a view that it was possible to achieve it in any other way.”
Any firm or its executive or staff that is pondering financial gains from a cartel or price fixing arrangement should ponder the following before taking such a course.
The first is "What are your chances of being caught?" These days they can be high. For a start, the ACCC has an immunity policy whereby the first participant in a cartel/price fix in the door who reports the breach is granted immunity. An understanding can also be inferred from circumstantial evidence such as:
• parallel conduct (e.g. two competitors ceasing, at approximately the same time, to supply goods to a particular customers); and
• evidence of opportunities for an understanding to arise (such as a trade association or social meeting).
For example in the Ballarat petrol case the ACCC’s case was partially based on circumstantial evidence i.e. pattern of phone calls that correlated with price increases.
The other thing to bear in mind is that many companies are now establishing internal whistleblowing systems to allow for reporting of such conduct
If the chances of being caught are relatively high then is it worth engaging in a price fix? Think about the following consequences that can and have occurred to others:
Jail;
High fines for the firm and the participants;
Stress;
Regulators “in your face” for an extended period;
Legal costs for lawyers to represent you;
Reputation damage.
Any company that does not have an effective competition law compliance management system is putting themselves at real risk. The cost of such a system far outweighs the penalties.
He went on to add: “You do not fix prices, you do not rig bids, you do not allocate customers. This is the kind of conduct which could expose your client to gaol. The ACCC will use the full force of the law to bring you to account, either financially or through incarceration."
Under the new law, serious offenders would be jailed and, in addition, potentially face a fine and/or be banned from being a company director or company manager for life.
Furthermore, a business could be subject to fines of up to $10 million, or three times gain, or 10 per cent group turnover – whichever was the highest.
It has been my experience that breaches of the competition law can occur out of ignorance or the willingness to take risks.
Having a total sales target driven culture bereft of any warnings about the need for compliance to be maintained can send staff signals that ‘all bets are off’ as to how they achieve sales targets. Some top managers engage in ‘dog whistling’ - in that they profess support for competition law compliance but at the same time send signals that they are indifferent to how sales are maintained. A good example of this occurred in a recent cardboard box price-fixing case and is summed up neatly in the following extract:
Sacked Amcor chief Russel Jones put pressure on executives to collude with Visy, according to one executive’s record of interview with the Australian Competition and Consumer Commission.
The transcript, part of which has been obtained by The Australian Financial Review, reveals that Peter Brown, former managing director of Amcor Australia, told the ACCC in 2005 that Mr Jones had “[taken] me to task in front of the board about the low prices in corrugated boxes and how it was the most important thing to ensure the success of the business, so I felt extreme pressure to get prices up.”
Asked whether Mr Jones had said “go out and collude”, Mr Brown replied: “No, not at all, no no, and it would not have been appropriate for him to say that in those terms anyway. But I was very, very clear in my own mind what he was looking for.”
ACCC general counsel Robert Alexander asked: “When you say you are clear in your own mind what he is looking for, he was looking for increased prices, was he?”
“Yes, and the only way to get those was essentially to collude with the competitor,” Mr Brown replied.
“I think that was everyone’s view. I don’t believe anybody who was involved in the business had a view that it was possible to achieve it in any other way.”
Any firm or its executive or staff that is pondering financial gains from a cartel or price fixing arrangement should ponder the following before taking such a course.
The first is "What are your chances of being caught?" These days they can be high. For a start, the ACCC has an immunity policy whereby the first participant in a cartel/price fix in the door who reports the breach is granted immunity. An understanding can also be inferred from circumstantial evidence such as:
• parallel conduct (e.g. two competitors ceasing, at approximately the same time, to supply goods to a particular customers); and
• evidence of opportunities for an understanding to arise (such as a trade association or social meeting).
For example in the Ballarat petrol case the ACCC’s case was partially based on circumstantial evidence i.e. pattern of phone calls that correlated with price increases.
The other thing to bear in mind is that many companies are now establishing internal whistleblowing systems to allow for reporting of such conduct
If the chances of being caught are relatively high then is it worth engaging in a price fix? Think about the following consequences that can and have occurred to others:
Jail;
High fines for the firm and the participants;
Stress;
Regulators “in your face” for an extended period;
Legal costs for lawyers to represent you;
Reputation damage.
Any company that does not have an effective competition law compliance management system is putting themselves at real risk. The cost of such a system far outweighs the penalties.
How to make your compliance program sustainable
“Sustainability” is one of the buzz words of our age, one which even has some relevance to regulatory compliance. There are a number of indicia that a compliance program needs to have before it can be said to be sustainable. I would maintain that without these following features a compliance program will struggle and cease to be effective.
From the outset every organisation needs to have a compliance management system which, at least, contains the features discussed below.
First there has to be genuine top management support. This largely manifests itself in ensuring the compliance function is adequately resourced to meet the organisations regulatory requirements and that there is accountability.
In the course of his reasons for decision in Australian Competition and Consumer Commission v Australian Safeway Stores and George Weston Foods in relation to penalty Federal Court judge Mr Justice Goldberg referred to the duties of the board of directors and senior executives:
‘It is very important in this area that responsibility be assumed and discharged by the board of directors and senior executives and management for compliance by the corporation with its obligations under the Act. It is the board of directors which supervises and ultimately controls the executive and operational aspects of a corporation’s commercial activities.’
The Board’s involvement in compliance translates into receiving regular and timely reports on high regulatory and common law risks for the organisation, compliance controls developed to manage these risks, how the controls are being maintained (reviews, audits, and incidents and their rectification).
Equally as important is the fact that the compliance function itself needs to have sufficient stature in the organisation and have “clout”.
.
Although compliance is everyone’s responsibility there needs to be someone overseeing the system as a “ringmaster” i.e. a Compliance Manager. As suggested above, that person needs to have sufficient status and authority (“presence” and “gravitas”) within the organisation to ensure that they are taken notice of. I would go further and argue that the Compliance Manager, however so called, should be part of the leadership/decision making team so that compliance issues can be identified from the word “go” and compliance built in early so that it seamlessly becomes part of the goods and services offered by an organisation. This is important because it casts the role of the Compliance Manager as an “in-house” consultant/adviser rather than someone who comes in late in the process and causes resentment by asking others to go back to the drawing boards and changing the design of goods and services therefore adding to the cost.
Skills in leading others are another feature of sustainability in compliance. There are two aspects to this. The first is what I call “tone at the top”, an expression which has become a compliance mantra for industry and regulators in recognition of organisational leaders’ significant influence on employee attitudes, and as a consequence, organisational behaviour. Those at the top are the ones who are noticed and from whom employees take their cue. The tone must be such that top management makes it clear that it wants compliance embedded seamlessly into the organisation’s activities. The second is the attributes of the Compliance Manager. He or she needs to be able to manage relationships, not subordinate, practice collegiality and be a competent advocate for compliance.
Building in compliance from inception is what I call “Compliance Design” and is an integral part of sustainability in compliance.
Every organisation needs to assess its regulatory obligations on an ongoing basis and the risk that lack of controls would pose for the organisation. This requires advocacy on the need for controls and collegiality in developing them. You also need to put the finger on who is responsible for operating those controls, whether they have the competencies to carry them out and ,if not, what training is required.
Compliance is not only about having processes but also ensuring that there is compliant behaviour. In this respect the right tone at the top is critical. Compliant behaviour is more likely to occur when staff are “sold” the reasons for compliance and are part of the system design, and then processes designed are empathetic to their particular day-to-day operations. Needless to say non conformance may require additional training, mentoring or coaching and, in the case of indifference, or intentional or reckless non conformance, some form of serious consequence.
Appropriate compliance behaviour can come about by regular formal training on relevant laws which “at risk” staff must conform to. Many companies do this training annually. However, that training needs to be reinforced between annual training sessions by keeping relevant regulatory issues “front of mind” throughout the year. In the trade practices area one device I recommend is being on the ACCC’s Web Alerts. A point on communications:
Limit them to your “real world” risks
Relate them to the real world your organisation operates in on a day-to-day basis;
Keep the message simple and understandable (no lawspeak).
Try “roadtesting” the material.
Understanding the message is the end game.
One potential weak link in any compliance program is to failing to ensure that newly recruited staff are reminded of their compliance obligations from day one. I am reminded of a Federal Court decision based on a breach of the competition law provisions of the Trade Practices Act where a new recruit had joined the company just after the annual trade practices training so was unaware of his responsibilities and so breached the TPA out of ignorance.
Another important aspect of sustainability is to have a proper maintenance/auditing program to make sure that the systems/controls you have developed are (a) being applied and (b) effectively so. It’s the equivalent of “kicking the tires” occasionally.
Having an independent review every so often gives the system a reality check to see that it is delivering effectively.
From the outset every organisation needs to have a compliance management system which, at least, contains the features discussed below.
First there has to be genuine top management support. This largely manifests itself in ensuring the compliance function is adequately resourced to meet the organisations regulatory requirements and that there is accountability.
In the course of his reasons for decision in Australian Competition and Consumer Commission v Australian Safeway Stores and George Weston Foods in relation to penalty Federal Court judge Mr Justice Goldberg referred to the duties of the board of directors and senior executives:
‘It is very important in this area that responsibility be assumed and discharged by the board of directors and senior executives and management for compliance by the corporation with its obligations under the Act. It is the board of directors which supervises and ultimately controls the executive and operational aspects of a corporation’s commercial activities.’
The Board’s involvement in compliance translates into receiving regular and timely reports on high regulatory and common law risks for the organisation, compliance controls developed to manage these risks, how the controls are being maintained (reviews, audits, and incidents and their rectification).
Equally as important is the fact that the compliance function itself needs to have sufficient stature in the organisation and have “clout”.
.
Although compliance is everyone’s responsibility there needs to be someone overseeing the system as a “ringmaster” i.e. a Compliance Manager. As suggested above, that person needs to have sufficient status and authority (“presence” and “gravitas”) within the organisation to ensure that they are taken notice of. I would go further and argue that the Compliance Manager, however so called, should be part of the leadership/decision making team so that compliance issues can be identified from the word “go” and compliance built in early so that it seamlessly becomes part of the goods and services offered by an organisation. This is important because it casts the role of the Compliance Manager as an “in-house” consultant/adviser rather than someone who comes in late in the process and causes resentment by asking others to go back to the drawing boards and changing the design of goods and services therefore adding to the cost.
Skills in leading others are another feature of sustainability in compliance. There are two aspects to this. The first is what I call “tone at the top”, an expression which has become a compliance mantra for industry and regulators in recognition of organisational leaders’ significant influence on employee attitudes, and as a consequence, organisational behaviour. Those at the top are the ones who are noticed and from whom employees take their cue. The tone must be such that top management makes it clear that it wants compliance embedded seamlessly into the organisation’s activities. The second is the attributes of the Compliance Manager. He or she needs to be able to manage relationships, not subordinate, practice collegiality and be a competent advocate for compliance.
Building in compliance from inception is what I call “Compliance Design” and is an integral part of sustainability in compliance.
Every organisation needs to assess its regulatory obligations on an ongoing basis and the risk that lack of controls would pose for the organisation. This requires advocacy on the need for controls and collegiality in developing them. You also need to put the finger on who is responsible for operating those controls, whether they have the competencies to carry them out and ,if not, what training is required.
Compliance is not only about having processes but also ensuring that there is compliant behaviour. In this respect the right tone at the top is critical. Compliant behaviour is more likely to occur when staff are “sold” the reasons for compliance and are part of the system design, and then processes designed are empathetic to their particular day-to-day operations. Needless to say non conformance may require additional training, mentoring or coaching and, in the case of indifference, or intentional or reckless non conformance, some form of serious consequence.
Appropriate compliance behaviour can come about by regular formal training on relevant laws which “at risk” staff must conform to. Many companies do this training annually. However, that training needs to be reinforced between annual training sessions by keeping relevant regulatory issues “front of mind” throughout the year. In the trade practices area one device I recommend is being on the ACCC’s Web Alerts. A point on communications:
Limit them to your “real world” risks
Relate them to the real world your organisation operates in on a day-to-day basis;
Keep the message simple and understandable (no lawspeak).
Try “roadtesting” the material.
Understanding the message is the end game.
One potential weak link in any compliance program is to failing to ensure that newly recruited staff are reminded of their compliance obligations from day one. I am reminded of a Federal Court decision based on a breach of the competition law provisions of the Trade Practices Act where a new recruit had joined the company just after the annual trade practices training so was unaware of his responsibilities and so breached the TPA out of ignorance.
Another important aspect of sustainability is to have a proper maintenance/auditing program to make sure that the systems/controls you have developed are (a) being applied and (b) effectively so. It’s the equivalent of “kicking the tires” occasionally.
Having an independent review every so often gives the system a reality check to see that it is delivering effectively.
Sunday, 12 April 2009
TPA compliance systems
Anyone who ventures into the Australian Competition and Consumer’s (ACCC’s) website will observe the constant stream of press releases demonstrating a stream of enforcement activity that this vigorous regulatory agency is bringing against companies.
Behind each of these press releases, which reflect on a company’s reputation through the bad press, there is generally also the untold story of distracted executive time and costly lawyer’s fees either defending a court action or negotiating an enforceable undertaking with the ACCC.
Many of the cases involve breaches of the Trade Practices Act (TPA) whereby companies, often inadvertently, put out misleading promotional material, make a claim about their product or service that they can’t substantiate or have sold a product that is supposed to meet the requirements of a mandatory standard.
The sad thing in most of these cases the companies concerned had no compliance system or the one they had was ineffectual. Ignorance of the law is not an excuse with the ACCC and it doesn’t have to prove intention to break the law. The ACCC can be quite unforgiving if the law is broken and as noted above is pretty active in the marketplace. If the companies in the spotlight had gone to the relatively small expense of setting up a trade practices compliance program that identified their trade practices risks and then had some controls developed to manage those risks they could reduce the risk the embarrassment and the costs of defending an ACCC action. So the simple message is if you don’t have a TPA compliance system don’t put it of till tomorrow: do something today.
Sunday, 25 January 2009
Welcome to the new Compliance and Complaints blog...
A very happy new year to all (colleagues, clients and all who share an interest in issues of consumer affairs and complaints handling, customer service and compliance issues)!
This will be somewhere to find out what is happening in Australia and elsewhere in consumer affairs and industry regulation, pick up news, hear from some associates, find information and ask questions. I’ll report on meetings and conferences I attend, relevant news and forthcoming events.
Please post your comments, ask questions about compliance and complaints issues and make suggestions about the blog.
This will be somewhere to find out what is happening in Australia and elsewhere in consumer affairs and industry regulation, pick up news, hear from some associates, find information and ask questions. I’ll report on meetings and conferences I attend, relevant news and forthcoming events.
Please post your comments, ask questions about compliance and complaints issues and make suggestions about the blog.
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