ethics and compliance

The Covid-19 pandemic changed the world, altering our habits and how we function in society. Most of us witnessed or experienced how the workplace became one of the most impacted areas during the pandemic. It was during this time that most nonessential businesses around the world adopted remote work as a way to continue operating in the midst of the crisis.

Today, as the pandemic is waning, many companies have decided to remain remote or implement a hybrid system that intersperses work from home and in the workplace, establishing new rules that bring new challenges.

The correct implementation of compliance is especially relevant in this context. This is especially true if we consider the new challenges, including the relaxation of restrictions, the greater autonomy that employees have acquired, the overall lessening of supervision by management and the recent technological boom. As someone who works in compliance, I see how now more than ever, it is essential to refocus corporate culture to promote ethical behavior that transcends the walls of an office.

Ethics and Compliance Must Coexist in a Corporate Setting

A strong compliance program is a management system that seeks to benefit the company by focusing on preventing crimes such as bribery or money laundering, alerting management of the risks to which they are exposed, and ensuring adherence to local and international law. This program aims to allow companies to exempt themselves from criminal liability if a company is involved in an act of corruption carried out by executives and/or employees who have their own agenda or who are looking for an easy way to obtain money.

However, many companies have not been able to exempt themselves from this responsibility since compliance programs alone do not prevent the occurrence of crimes or guarantee the company’s innocence, even if it was only one employee who committed an illegal act.

For this reason, companies must ensure that their employees internalize good practices, beyond memorizing the compliance handbook, and change their behavior so that it is aligned with the values and culture of the company. This can be achieved precisely by focusing on the ethical behavior of each member of the company’s ecosystem, which includes senior executives and members of the board of directors. We must bear in mind that every individual is a complex being that lives a different reality, has biases, and is susceptible to making bad decisions under certain scenarios and pressures.

Incorporating Ethics Culture in Workplaces

Given the complex times we are experiencing as a result of the pandemic (and now the war in Europe as well), it is imperative that companies strengthen the practice of compliance behavior, which seeks to deeply ingrain ethics and integrity into the corporate culture. The objective is to anticipate unethical conduct in the company and detect the circumstances under which it may occur. Therefore, the perspective of compliance changes from reactive and normative to predictive and preventive based on the behavior of each member of the organization.

As much as we may deny it, we are all corruptible, especially in regions where bribing people to obtain favors is part of a culture. Under certain conditions, most people can fall into unethical behaviors—even if this may normally seem alien and difficult to imagine. It is the influence of our cognitive biases that determines our subconscious behavior.

For example, a well-evaluated executive who has the full confidence of their superior and has risen in the company thanks to good performance can still be susceptible to bad practices. This is not necessarily because they are a bad person, but being exposed to a series of factors, such as pressure to achieve specific goals and misplaced incentives, can lead them to minimize some inconvenient facts and self-justify their questionable actions.

An Ethics and Compliance Program Is Essential in the Workplace

So, the goal of behavioral compliance is for companies to be able to prevent, detect and react in advance to these blind spots that can cause corporate compliance programs to fail.

For this reason, compliance officers and departments should focus on posing ethical dilemmas to workers in order to find out what their biases are and how they would react to hypothetical but, unfortunately, feasible events. It is important that they do not aim to obtain black-and-white or good-and-evil answers but rather focus on the gray areas, where decisions become complex and a series of biological, psychological and social factors weigh in.

Compliant Behavior Can Be Rewarded

Along these very lines, the U.S. Department of Justice (DOJ) recently announced new rules, which stand out in that they allocate more resources to evaluate companies’ compliance policies, thus enhancing the value of real compliance and encouraging companies to demonstrate that they are doing everything in their power to avoid corruption with the evidence to prove it.

Likewise, the Deputy Attorney General of the DOJ, Lisa Monaco, highlighted that the effectiveness of compliance is not guaranteed by the mere provision of more resources or stricter controls but also requires the installation of a corporate culture that reflects the values of the company and manages to deter bad practices.

Standing out in this sense are compensation and incentive systems, which reward good behavior and deter misconduct or risky behavior. In that context, she said the DOJ is developing new guidelines to reward companies with compensation agreements, which will help companies avoid criminal liability and redirect financial penalties to those directly responsible. In addition, she pointed out that focus will be placed on the company’s history regarding misconduct, as well as on considerations toward those who make voluntary complaints or self-reports.

Compliance Training Has to Go Hand in Hand With Ethics

As we can see, a compliance program does not ensure success in prevention if it does not cover cognitive biases and human behavior. Let us not forget that companies are made up of people and that acting ethically or anticipating certain decisions may be the key to the effectiveness of prevention. For this reason, the permanent evolution of compliance is essential to adapt to the changing reality we live in.


BY Susana Sierra is CEO of BH Compliance, which gathers real-time evidence about a compliance program’s performance using Blockchain tech.

Source: Forbes