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.