60% of the people we spoke to admit they are better at

creating [compliance] programs than implementing them …

Steering the Course, 2016

 

How well does your firm do in implementing and enforcing compliance programs?

Over 350 of the 604 chief compliance officers (CCOs) surveyed by law firm Hogan Lovells said their company is better at creating anti-bribery and corruption (AB&C) compliance programs than at implementing them (Steering the Course, 2016). Almost 400 of these CCOs also said their company is better at creating guidelines than at enforcing them.

Other findings, explored in more detail in this global survey, include:

• 44% of companies do not make AB&C compliance a standing item on the board agenda

• 40% of CEOs do not regard AB&C compliance programs as a top priority

• 41% of CEOs do not undergo regular AB&C training

• 61% of chief compliance officers do not report directly to the CEO

• 58% of CCOs say that their advice to CEOs is filtered by others

• 56% of CCOs report that executive denial (that bribery or corruption take place) is a major challenge

One of two big issues Steering the Course addresses is implementation of compliance programs on a worldwide basis. (The other is tone at the top—the influence of senior management over the rest of the organization.)

One of the most common problems we see is programs not being read by staff – tantamount to programs falling at the first hurdle. This is particularly concerning as our research suggests that companies are increasing their level of investment in AB&C, yet this could be failing to deliver a commensurate reduction in risk.

The report uses whistleblower hotlines to illustrate the issue of implementation. The presence of an effective hotline is one indicator that a company takes compliance seriously, yet “two fifths (40%) of companies do not have a whistleblowing hotline…. Those that do have one in place report that it is well known, well understood, and widely used, suggesting that its implementation has been a worthy addition to the company’s approach.

Geographic distances, cultural differences, and lack of cooperation between different parts of the business contribute to problems with implementation and enforcement of compliance programs in general, as does a lack of training and the lack of a tailored approach to policies.

What’s needed? Companies can embed compliance policies, procedures, and programs throughout the organization—and gain much better return on investment in compliance-program dollars—by exploring some of the following options, as suggested in the report:

• Use local “champions”

• Take advice on how to localize AB&C guidelines

• Have compliance teams visit local offices

• Provide specific, tailored training

In its survey report, Hogan Lovells breaks out its findings by region, worldwide, including just the United States. It also offers access to Benchmarking Your Compliance Program, which you could use as an aid to assessing your firm’s efforts at implementing its own compliance programs; link to “our compliance guide” at http://www.hoganlovellsabc.com/.

Regulatory pressures, whistleblower protection laws, and demands for transparency are growing worldwide, making it increasingly essential to effectively implement and enforce compliance programs.

Ethical Advocate provides ethics and compliance training and consultation to organizational leaders. Contact us for information about comprehensive ethics and compliance solutions, including ethics and compliance training and confidential and anonymous hotlines.

References:

Steering the Course: Navigating Bribery and Corruption Risk. A global study by Hogan Lovells, 2016. http://www.hoganlovellsabc.com/_uploads/downloads/Steering-the-course-report.PDF