Compliance Needs Performance Standards and Credentials

With a growing body of knowledge documenting that highly ethical organizations are also high performing, enlightened business leaders are driving a new and ongoing convergence between ethics and compliance.

While ethics and compliance have always been deeply engrained in the typical compliance officer’s world view, business leaders are looking to create cultures where employees are committed to the company, voluntarily obey the rules, and trust and rely on one another—without, at the same time, opening up the enterprise to cheating and abuse of trust.

Unfortunately, when a director or senior executive asks for a state-of-the-art compliance program, compliance professionals cannot yet demonstrate that a proposed set of compliance policies and procedures truly are best in class. To do so—and make ethics a truly integral part of a company’s culture—the compliance profession as a whole must address three critical challenges:

1. Clearly defining compliance and the compliance department’s role.
2. Establishing measurable performance standards and certification processes.
3. Creating a global credentials program for all compliance professionals.

A Defined Role

Much of a compliance professional’s work consists of establishing and managing preventive policies and procedures. This is, in many respects, a core function of compliance. Compliance professionals have a good sense for policies and procedures, and they can recognize good ones when they see them.

However, as ethics and compliance converge, professionals will be asked to more clearly define exactly what “compliance” means. If they want to be viewed as more than just the keepers of the policies and procedures, or the investigative team that shows up when there is a problem in an office, this question has to be addressed early on.

As often happens, it’s easier to define what compliance is not. First, it is not enforcement defense. Surely, that’s an important function, but it is not compliance. Compliance should be focused on helping an organization do the right thing. At the moment an issue becomes defending the organization in regards to some past conduct, compliance should hand responsibility for the issue to someone else.

Similarly, compliance is not risk management. Compliance does not aspire to calculate or control risk, it aspires to elevate society—whether it is the small society of a branch office, the large society of a corporation, or the even larger society of the financial sector as a whole. Compliance can leverage risk management—the people who work in risk management have some interesting skills such as their command of statistical methodologies, that can be helpful to a compliance officer—but that’s not compliance either.

A suggested definition: Compliance practitioners are professional ethicists skilled both in the organizational practices that enhance their company’s ethics, and also in the controls that prevent and detect those who would attempt to cheat against the company’s ethical standards.

That is a mission in which compliance professionals can take real pride. Indeed, a definition that combines both compliance and ethics holds the most promise. By focusing on organizational ethics, compliance professionals can make explicit what they have always held in their hearts: that they are the professionals who want to work full time on ethics to help the company succeed.

Performance Standards