Building Effective Compliance Teams
The first thing to say is that organisations need good compliance more than perhaps they even realise. It’s like a silent partner and bodyguard all in one, as with a strong compliance function you reduce your risk, operate on a proactive basis and within an ethical framework.
With the traditional tick-box approach to compliance evolving in line with increasing regulatory pressures and tighter budgets, there is a need for a far stronger compliance function, equipped with the skills and experience to address a less well-defined compliance environment.
So, what does that mean for building an effective compliance team or department? What are the things businesses should be thinking about?
Set the Tone
Run on a hierarchical basis, like most things, a business sets the tone for good compliance from the top. Now with regulators placing more of an emphasis on how those at the helm of a company conduct themselves and their business, it is up to those top-level executives to demonstrate their commitment to entrenching best practice compliance in the company. When a compliance team has the investment and support from the C-suite and the Board of Directors, that tells the rest of the company how important the compliance function is to the business. More than a ‘buy-in’, those at the top must reflect it in their actions and regularly reinforce the importance of compliance to employees at every opportunity.
Striking the Balance
Within a great compliance team, you need a good balance of skills, experience, and potential. The range of skills required of those working in compliance has widened in response to the way compliance operates. Companies are placing more emphasis on things like good communication, reporting, and being able to think outside the box when it comes to generating ways to make compliance efficient and cost-effective. Good communication in particular is a highly valued skill for compliance jobs, as compliance professionals are expected to be able to communicate constructively across all functions of the business including the very top as well as key stakeholders and, importantly, the regulators.
It should go without saying that risk reduction should be a compliance team’s key priority, perhaps more so than the controls in place to mitigate these risks. Both are undoubtedly important, but an effective compliance team is one that is proactive about addressing those fundamental risks facing the company and as those risks develop, shifting gear to assess the controls that are in place and ensuring they are doing their job properly.
From technology solutions to regulatory changes impacting the organisation and best practices aimed at improving compliance systems, ongoing training is an essential component to building and maintaining a strong compliance team.
The mark of a good compliance team is one that can build and leverage relationships with other departments, from audit and legal to risk management and finance. The reason being that it relies on information and technological tools from those departments to be able to do its job properly. Shedding the outdated silo mentality, today’s compliance teams must engender a broader team approach within the organisation, both to avoid duplicated processes and to help instil good compliance practices into business strategy, processes, and functions.
That all being said, while it is important for those relationships to be built, it is equally important for the compliance team to retain an element of independence. At the end of the day, they are there to enforce the best practice and code of conduct within the organisation so they must command the authority to do so.