Compliance, Ethics and the Multi-generational Workforce

With these things in mind, how can you be more successful in compelling employees at all levels of your organization to get on board with your workplace compliance and ethics standards? This challenge becomes more complicated when you consider that you have employees from different age groups and generations, as well as diverse cultures. Both of these factors can have an impact on the way that different employees consume and retain information.

This article outlines two key tactics for effectively executing and nurturing a strong workplace compliance and ethics strategy. The first is fostering employee engagement. The second involves deploying the right technology tools to drive and support this.

Compliance and Ethics: The Inconvenient Truth

Granted, many organizations already have embraced strong workplace compliance and ethics ideals. These days, most companies not only have a code of conduct, but also some level of associated compliance and ethics programs in place. However, the inconvenient truth is that many programs that are considered effective or look great on paper may not always compel employees to comply and act ethically.

Seemingly endless vulnerabilities and risks related to unethical or non-compliant employee or third-party activities can threaten today's global businesses. Whether they are due to carelessness, lack of awareness or understanding, or willful disregard, employee and third-party actions that violate internal or external policies and rules can have serious implications for the business. It is critical that employees and third parties understand and internalize their compliance obligations. Failure to adhere to company standards of customer service, for example, can lead to customer dissatisfaction, and in extreme cases, loss of customers, negative publicity, or even legal action. Violations of industry and governmental rules and regulations can lead to fines as noted earlier, potential criminal prosecution, damage to reputation and brand, diminished shareholder confidence, and other serious repercussions.

Needless to say, there is no shortage of these externally-imposed rules and regulations, including those under the FCPA, the Consumer Financial Protection Bureau, the Environmental Protection Agency (EPA), HIPAA, and more. With regulators becoming more vigilant and aggressive than ever, it behooves companies to ensure that their employees understand the importance of compliance.

But there is good news. A robust compliance and ethics program can provide real strategic benefits, not the least of which is that regulators suggest that such a program can be employed as a viable defense for one-off violations.

The Status Quo Is Not Good Enough

Michael Rasmussen, founder of GRC 20/20 Research and recognized authority on all things related to governance, risk, and compliance (GRC) management, asserts that in order to be effective, companies need to move away from a “check-the-box” mentality for compliance and ethics. Instead, they need to find ways to truly connect with employees and show that compliance and ethics are an integral part of day-to-day operations of the business. See Rasmussen, Michael, Employee Engagement in the Context of GRC: Bringing GRC to the Coal-Face. The GRC Pundit Blog, GRC 20/20 Research, 29 Oct. 2013.

Why haven't traditional programs been effective enough? Rasmussen suggests that this is because companies have neglected how front-line employees experience these programs. The programs are too often highly disorganized and lack coordinated communications. Rather than being engaged, employees tend to be confused and alienated, and view required compliance-related tasks as a waste of valuable time. In many companies, for example, there is no single source for policies or related training materials and surveys. Employees may receive compliance-related communications from multiple departments in the organization. In such an environment, how are employees to know, for example, which policies are the most current, where to find a specific policy that they are looking for, or whether the policy-related notices and task requests that they receive truly apply to them?

How to Enable Engagement

How can organizations better foster employee engagement in their compliance and ethics programs?

As has been widely recognized, this starts with the tone at the top. Senior leaders must make compliance and ethics important components of who they are, how they operate, and how they treat employees, business partners, and customers. Tone at the top is vital for empowering a culture of compliance and enabling the compliance function to act with enterprise-wide authority.

To support this culture, employees need to be made aware of their compliance and ethics responsibilities as part of their overall job to make both themselves and the organization successful. This idea can be woven into performance goals and evaluations to help make compliance and ethics more personal and meaningful to employees.

Companies should also create opportunities and offer technology tools that encourage employees to actively interact and participate with compliance and ethics programs. For example, employees need to go beyond simply reading policies, but must also understand them, be able to provide feedback, and know how to ask questions about policies to trusted sources.

In talking about employee engagement, Rasmussen emphasizes the importance of the user experience with the tools that support ethics and compliance programs. He cites four elements as key for systems to engage employees: 1) Intuitive interface design; 2) Socialization and collaboration; 3) Gamification; and 4) Mobility.

As companies seek to more effectively engage employees in their ethics and compliance programs, they must also consider the changing workplace demographics. More Americans are retiring later in life. Today 18% of U.S. workers are over age 65, according to the U.S. Bureau of Labor Statistics. This means that many companies have to consider designing compliance and ethics programs to reach four different generations of employees, often labeled as Traditionalists, Baby Boomers, Gen-X, and Gen-Y or Millennials. The latter, in particular, pose new challenges for ethics and compliance leaders who are seeking to educate, motivate ' and engage ' workers.

As “digital natives,” they are very tech-savvy and socially networked. They want work to be involving and meaningful, and are accustomed to sharing information through a variety of social media technologies. The compliance and ethics programs that companies implement ' and the technology solutions that they deploy to support them ' must take all of this into account.

Innovative GRC Technology at the table

To successfully support and enable employee engagement, it's important to use technology tools that effectively deliver compliance and ethics content and that reflect the new reality of a socially connected workforce. So what should you look for when choosing this technology?

First, technology tools should minimize complexity and be straightforward and intuitive to use (with minimal training required) and graphically interesting. For example, a secure portal for compliance and ethics can serve as a central repository where employees and third parties can read and attest to applicable company policies and respond to policy surveys. Look for a portal that provides a clear, personalized interface and user experience. It should enable employees to locate specific policies, access helpful resources, submit policy-related comments and questions, and access information on their progress.

Next, seek out tools that embed opportunities for social interactions and collaboration among users, and that include gamification elements. For example, some portals have social features similar to those users are accustomed to in the apps and programs they use outside work. Some of these features include online profiles; opportunities to participate in fun and competitive activities (competing for prizes for the most required policy attestations completed on the team); and interaction with the content and a community of users. These features can further personalize the user experience and stimulate involvement and engagement.

Third, ensure that the tools provide mechanisms for effectively communicating with employees and third parties about changing policies and requirements. Some systems offer automated management of your audiences for different policies (which is particularly critical over time as people move into, out of, or around different parts of the organization) and can integrate with other systems (such as HR) to facilitate this. They can also provide capabilities for automatically notifying audiences when policies are published or updated.

Many people access work content and activities via smartphones and tablets. It is important for technology tools to facilitate these users by enabling mobile access to policies and allowing them to respond to required attestations, training, and questionnaires. This can further support employee engagement.

Beyond the facilities for delivery and interaction with content, it is important that a technology solution provide capabilities that support both documentation and evaluation of ethics and compliance program efforts. For example, as employees and third parties use a portal to read policies, complete surveys and attestations, submit questions, etc. some systems allow information on these activities to be collected, analyzed, and reported. Data of this type offers compliance professionals a valuable barometer of the level of employee engagement and can help gauge program effectiveness and inform future program improvements. Documentation of program activities also permits companies to build an audit trail, demonstrate program success, and defend compliance efforts.

Final Thoughts

With the best intentions, many companies have developed compliance and ethics programs that, on the surface, appear to be effective in protecting the organization and supporting its standards and obligations. However, compliance incidents are still occurring, unethical behavior is still a serious problem, and fines for regulatory violations are higher than ever. To improve the success of ethics and compliance programs requires heightened focus on effectively engaging front-line employees. In order to foster this engagement, companies can look to innovative technology solutions to help employees participate actively in compliance and ethics and understand their role in ensuring the integrity of the organization.

Daniel de Juan is director of product management for Datacert's, Passport GRC.

A strong workplace compliance and ethics program offers many benefits for any organization. Such a program defines expectations for employee conduct, creates a safer workplace, improves employee retention, addresses risk in order to protect the company, and ' perhaps most important ' establishes a culture of compliance.

But there is a world of difference between creating a compliance and ethics program and effectively implementing one so that employees actually engage with it and adhere to it. A scan of the business news headlines reveals no shortage of malfeasance that breaches regulatory and ethical standards. For example, violations of the U.S. Foreign Corrupt Practices Act (FCPA) create headlines based on the large sums companies pay in fines and disgorgements. FCPA violations alone accounted for $4.63 billion in settlement payments between 2007 and 2013 from enforcement actions by the U.S. Department of Justice (DOJ) and Securities Exchange Commission (SEC). See Koehler, Mike, A Foreign Corrupt Practices Act Narrative. Mich. State Int. Law Rev. 22.3 (2014): 961-1094. The FCPA is but one of the numerous laws and regulations that corporations are subject to and against which corporate infractions are reported on a seemingly weekly basis.

While the Ethics Resource Center, in its 2013 National Business Ethics Survey, reported that the percentage of employees who said that they have “observed misconduct on the job” dropped to the lowest in the survey's history: 41%, or two out of every five workers, this is still a significant number. And more than one of every three of these individuals did not report the observed misconduct. Perhaps the most encouraging findings to support the impact that compliance and ethics programs can have are: In companies judged to have a “strong” ethics cultures, only one in five workers said they saw misconduct, while in companies with the weakest ethics cultures, close to nine in 10 employees observed misconduct. See National Business Ethics Survey of the U.S. Workforce. Ethics Resource Center (ERC), 2014.

With these things in mind, how can you be more successful in compelling employees at all levels of your organization to get on board with your workplace compliance and ethics standards? This challenge becomes more complicated when you consider that you have employees from different age groups and generations, as well as diverse cultures. Both of these factors can have an impact on the way that different employees consume and retain information.

This article outlines two key tactics for effectively executing and nurturing a strong workplace compliance and ethics strategy. The first is fostering employee engagement. The second involves deploying the right technology tools to drive and support this.

Compliance and Ethics: The Inconvenient Truth

Granted, many organizations already have embraced strong workplace compliance and ethics ideals. These days, most companies not only have a code of conduct, but also some level of associated compliance and ethics programs in place. However, the inconvenient truth is that many programs that are considered effective or look great on paper may not always compel employees to comply and act ethically.

Seemingly endless vulnerabilities and risks related to unethical or non-compliant employee or third-party activities can threaten today's global businesses. Whether they are due to carelessness, lack of awareness or understanding, or willful disregard, employee and third-party actions that violate internal or external policies and rules can have serious implications for the business. It is critical that employees and third parties understand and internalize their compliance obligations. Failure to adhere to company standards of customer service, for example, can lead to customer dissatisfaction, and in extreme cases, loss of customers, negative publicity, or even legal action. Violations of industry and governmental rules and regulations can lead to fines as noted earlier, potential criminal prosecution, damage to reputation and brand, diminished shareholder confidence, and other serious repercussions.

Needless to say, there is no shortage of these externally-imposed rules and regulations, including those under the FCPA, the Consumer Financial Protection Bureau, the Environmental Protection Agency (EPA), HIPAA, and more. With regulators becoming more vigilant and aggressive than ever, it behooves companies to ensure that their employees understand the importance of compliance.

But there is good news. A robust compliance and ethics program can provide real strategic benefits, not the least of which is that regulators suggest that such a program can be employed as a viable defense for one-off violations.

The Status Quo Is Not Good Enough

Michael Rasmussen, founder of GRC 20/20 Research and recognized authority on all things related to governance, risk, and compliance (GRC) management, asserts that in order to be effective, companies need to move away from a “check-the-box” mentality for compliance and ethics. Instead, they need to find ways to truly connect with employees and show that compliance and ethics are an integral part of day-to-day operations of the business. See Rasmussen, Michael, Employee Engagement in the Context of GRC: Bringing GRC to the Coal-Face. The GRC Pundit Blog, GRC 20/20 Research, 29 Oct. 2013.

Why haven't traditional programs been effective enough? Rasmussen suggests that this is because companies have neglected how front-line employees experience these programs. The programs are too often highly disorganized and lack coordinated communications. Rather than being engaged, employees tend to be confused and alienated, and view required compliance-related tasks as a waste of valuable time. In many companies, for example, there is no single source for policies or related training materials and surveys. Employees may receive compliance-related communications from multiple departments in the organization. In such an environment, how are employees to know, for example, which policies are the most current, where to find a specific policy that they are looking for, or whether the policy-related notices and task requests that they receive truly apply to them?

How to Enable Engagement

How can organizations better foster employee engagement in their compliance and ethics programs?

As has been widely recognized, this starts with the tone at the top. Senior leaders must make compliance and ethics important components of who they are, how they operate, and how they treat employees, business partners, and customers. Tone at the top is vital for empowering a culture of compliance and enabling the compliance function to act with enterprise-wide authority.

To support this culture, employees need to be made aware of their compliance and ethics responsibilities as part of their overall job to make both themselves and the organization successful. This idea can be woven into performance goals and evaluations to help make compliance and ethics more personal and meaningful to employees.

Companies should also create opportunities and offer technology tools that encourage employees to actively interact and participate with compliance and ethics programs. For example, employees need to go beyond simply reading policies, but must also understand them, be able to provide feedback, and know how to ask questions about policies to trusted sources.

In talking about employee engagement, Rasmussen emphasizes the importance of the user experience with the tools that support ethics and compliance programs. He cites four elements as key for systems to engage employees: 1) Intuitive interface design; 2) Socialization and collaboration; 3) Gamification; and 4) Mobility.

As companies seek to more effectively engage employees in their ethics and compliance programs, they must also consider the changing workplace demographics. More Americans are retiring later in life. Today 18% of U.S. workers are over age 65, according to the U.S. Bureau of Labor Statistics. This means that many companies have to consider designing compliance and ethics programs to reach four different generations of employees, often labeled as Traditionalists, Baby Boomers, Gen-X, and Gen-Y or Millennials. The latter, in particular, pose new challenges for ethics and compliance leaders who are seeking to educate, motivate ' and engage ' workers.

As “digital natives,” they are very tech-savvy and socially networked. They want work to be involving and meaningful, and are accustomed to sharing information through a variety of social media technologies. The compliance and ethics programs that companies implement ' and the technology solutions that they deploy to support them ' must take all of this into account.

Innovative GRC Technology at the table

To successfully support and enable employee engagement, it's important to use technology tools that effectively deliver compliance and ethics content and that reflect the new reality of a socially connected workforce. So what should you look for when choosing this technology?

First, technology tools should minimize complexity and be straightforward and intuitive to use (with minimal training required) and graphically interesting. For example, a secure portal for compliance and ethics can serve as a central repository where employees and third parties can read and attest to applicable company policies and respond to policy surveys. Look for a portal that provides a clear, personalized interface and user experience. It should enable employees to locate specific policies, access helpful resources, submit policy-related comments and questions, and access information on their progress.

Next, seek out tools that embed opportunities for social interactions and collaboration among users, and that include gamification elements. For example, some portals have social features similar to those users are accustomed to in the apps and programs they use outside work. Some of these features include online profiles; opportunities to participate in fun and competitive activities (competing for prizes for the most required policy attestations completed on the team); and interaction with the content and a community of users. These features can further personalize the user experience and stimulate involvement and engagement.

Third, ensure that the tools provide mechanisms for effectively communicating with employees and third parties about changing policies and requirements. Some systems offer automated management of your audiences for different policies (which is particularly critical over time as people move into, out of, or around different parts of the organization) and can integrate with other systems (such as HR) to facilitate this. They can also provide capabilities for automatically notifying audiences when policies are published or updated.

Many people access work content and activities via smartphones and tablets. It is important for technology tools to facilitate these users by enabling mobile access to policies and allowing them to respond to required attestations, training, and questionnaires. This can further support employee engagement.

Beyond the facilities for delivery and interaction with content, it is important that a technology solution provide capabilities that support both documentation and evaluation of ethics and compliance program efforts. For example, as employees and third parties use a portal to read policies, complete surveys and attestations, submit questions, etc. some systems allow information on these activities to be collected, analyzed, and reported. Data of this type offers compliance professionals a valuable barometer of the level of employee engagement and can help gauge program effectiveness and inform future program improvements. Documentation of program activities also permits companies to build an audit trail, demonstrate program success, and defend compliance efforts.

Final Thoughts

With the best intentions, many companies have developed compliance and ethics programs that, on the surface, appear to be effective in protecting the organization and supporting its standards and obligations. However, compliance incidents are still occurring, unethical behavior is still a serious problem, and fines for regulatory violations are higher than ever. To improve the success of ethics and compliance programs requires heightened focus on effectively engaging front-line employees. In order to foster this engagement, companies can look to innovative technology solutions to help employees participate actively in compliance and ethics and understand their role in ensuring the integrity of the organization.

Daniel de Juan is director of product management for Datacert's, Passport GRC.