by Thomas Sehested
Republished from Forbes, September 17, 2018
The importance of compliance needs to come from the top down in order for businesses to avoid white-collar crime, corruption and other missteps. Compliance and legal departments are working overtime on these matters, but it can’t only be up to them. All members of your organization — and that includes contractors — must understand why compliance matters. As the CEO of a company who specializes in compliance solutions, I have seen firsthand that this proactive behavior must come from the C-suite for it to have a real impact. This article lays out the reasons for why building a culture of compliance is essential and provides actionable insights on how executives can go about actually implementing this.
Compliance From The Top Down
The C-suite needs to build a culture where ethics and compliance are treated as part of everyone’s job. This means compliance cannot be left solely to the legal and compliance departments. Its value must be communicated from the top down. Executives, management and business leaders can play an active role in establishing and monitoring the compliance strategy. This will require clear communication between these leaders and the compliance program.
To begin with, leaders must not transmit the idea that compliance is a “necessary evil.” Employees are more likely to get on board if they understand that, when implemented correctly, compliance can become a competitive advantage. Organizations want to work with companies they can trust, not with those that are on record for paying large fines for compliance violations.
This makes everyone responsible for compliance, and leaders need to steer the course. Executives have to make sure they truly understand compliance in order to lead the compliance charge in their organizations. It’s not a matter of comprehending the nitty-gritty — that’s what the compliance team is for — but rather knowing the basics and why they matter.
When leaders practice what they preach, it provides the strongest example for other employees to follow. They demonstrate that the rules apply to all employees, including the C-suite. They do this by modeling a high standard of conduct and by regularly communicating the company’s compliance policies that employees are expected to adhere to.