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From aesthetic fulfillment to authentic commitment

"Going from formal to real compliance by managers and collaborators is still the great pending issue. Even in companies that were pioneers in implementing compliance programs for operating in regulated sectors or later as a consequence of the birth of criminal responsibility of legal persons. "

Compliance consists of the design and implementation of a set of organizational measures that pursue a double objective in organizations: on the one hand, minimize unwanted behaviors, whether illegal, unethical or contrary to the voluntary commitments that companies acquire. On the other, a Compliance Cash is a key tool for encourage certain behaviors, those who contribute to the strategy, purpose and sustainable growth of that company.

 

A well-designed and implemented integrity and compliance model not only decrease unwanted behaviors, avoiding sanctions, responsibilities and costs associated with sanctioning processes; but also will bring with it a series of benefits for the company, making it more prosperous and strong. The attraction and retention of talent, greater commitment and performance by employees[1], competitive advantage and improved trust of stakeholders (customers, consumers and investors), better long-term financial results[2], reputation enhancement[3] and process efficiency are just some of these benefits.

 

However, we know that not all approaches to Compliance work, many unfortunately not only do not achieve the benefits indicated above, but also become a burden for companies and their professionals, who perceive it as not very credible, far from strategy, business and lacking in value, they even feel it as an added difficulty when it comes to doing their job and achieving their goals.

 

And this happens as a consequence of exclusively legalistic approaches, which have not succeeded to establish a adequate balance between a Compliance normative and one based on values, where there is no coherence between what is said and what is done, the beliefs and expectations of the different stakeholders present in the ecosystem of each organization, and the reason for putting it into operation has been exclusively the fear of being sanctioned. These programs do not put the culture of integrity at the center, they are limited to establishing controls or elements without interconnecting them with each other as a management system, and in many cases they are not tailored to each organization based on the real risks.

 

It is no longer enough to comply with the law and obtain the maximum benefits, now companies are required this and more. It is essential to act ethically in business, to acquire new commitments that take into account the expectations and beliefs of the different stakeholders, and above all, fulfill them

 

A culture of integrity and compliance must be based on a series of fundamental ethical values, which must be promoted by consistent and coherent leadership not only by senior management, but also by middle management, those who are closest to of the operation and the day-to-day of the business.

 

It is clear that the creation and maintenance of a true culture of compliance is the great unfinished business, also in companies that can boast of having mature programs in terms of Compliance. The "culture control" is surely the most difficult to achieve and maintain in organizations. However, it is the key to being able to speak of a Compliance cash. In addition to strengthening the effectiveness of other types of more formal controls, such as the usefulness of an ethical code, a reporting channel, and compliance with policies and processes, it will be what really ensures the success of the system, both in terms of its defensive utility before regulators and authorities as generating other important benefits such as the sustainable growth of the company. If the "culture control" does not exist or is deficient, the other controls end up failing.

 

Un Compliance integral e integrated It's the key. Comprehensive in the sense of managing risks of legal non-compliance, ethical non-compliance and voluntary commitments. Integrated in terms of embedding it as part of the strategy, business and decision-making. Working in a culture of integrity and compliance is decisive for this.

 

This vision is key to moving from a Compliance understood as a necessary expense whose sole objective is to avoid penalties and responsibilities for an investment that contributes to sustainable growth.

 

There are powerful enablers to create and maintain such a long-awaited culture such as those offered by behavioral sciences, effective awareness and communication, as well as other complementary actions that will help us in this objective and achieve a commitment from collaborators.

 

Behavioral science studies how people make decisions and act. Human beings are supposed to make decisions rationally and always looking for our personal benefit, however, this is not always the case. The usual thing is just the opposite. There are certain regularities and imperfections in human behavior that are important to take into account in order to motivate certain desired behaviors. The use of "nudges" makes it easier for recipients to increase their intrinsic motivation and act in a certain direction while preserving their freedom of choice. (Although these techniques have proliferated widely and successfully in the public sector, they represent an opportunity for the private sector as well).

 

Communication is one of the key tools for raising awareness. It is essential to establish a good strategy in terms of understanding To who we communicate (recipients), what we communicate (message), how we communicate (means and methodology), who communicates it, when communicates, and essential why communicates (reasons and objectives). One of the characteristics of a company that has a culture of integrity and compliance is the coherence. Therefore, it will be necessary to analyze what other factors, realities and actions present in an organization may be contrary to a culture of integrity and compliance.

Patricia Carter Saez

Senior Advisor at Corporate Integrity & Compliance. LLORENTE AND CUENCA (LLYC)

Lawyer and international consultant expert in Corporate Integrity and Compliance. Certified Compliance & Ethics Professional (CCEP) © Certified Compliance & Ethics Professional International (CCEP-I) © Certified auditor ISO 19600 and ISO 37001 (ETHIC Intelligence).

[1] Hunt, et al., Hunt, V., Yee, L., Prince,. S. & Dixon-Fyle, S., 2018. Mckinsey. [On line] Available at: https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity >
[Accessed 11 December 2019]; Edelman, 2019. Edelman. [On line] Available at: https://www.edelman.com/trust-barometer >

[2] Ethisphere, 2018. Ethisphere. [On line] Available at: https://ethisphere.com/2018-worlds-most-ethical-companies/ > [Accessed 10 December 2019]; Healy and Serafeim, 2019 Healy, P. & Serafeim, G., 2019. How to scandal-proof your company. Harvard Business Review Home, Volume July-August. [On line]
Available at: https://hbr.org/2019/07/white-collar-crime#how-to-scandal-proof-your-company > [Accessed 9 December 2019].

[3] Cardona and Hevia, 2019; Cardona, J., and Hevia, F., 2019. Reputational risk in IBEX 35 Boards of Directors: Logos and challenges. [Reputational Risk on the Boards of Directors IBEX 35: Logos and Challenges]. Boghraty, B., 2019. Organizational Compliance and Ethics. New York: Wolters Kluwer.

Article originally published in the Blog Fide in the withfideinitial

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