During this five-part podcast series, I have visited with Thomas Sehested, founder and Chief Executive Officer (CEO), Valerie Charles, Chief Strategy Officer, and Peter Chang, Head of Customer Success, of GAN Integrity, Inc. (GAN). Over this series, we consider how the effective use of technology can drive not only a more effective, operationalized compliance program but make your business run more efficiently. In Part III, I visit with Sehested on how tech solutions can make not only compliance more efficient, but companies run more efficiently and at the end of the day more profitably.
One of the things I evangelize the longest and loudest about is that properly practiced, an effective, fully operationalized best practices compliance program makes a company operate more efficiently and, therefore, more profitably. Organizations such as Ethisphere have consistently demonstrated, with nearly 15 years of data from its World’s Most Ethical awards, that companies who win the award outperform the Standard & Poor’s average. I was therefore very interested to visit with Sehested on this topic.
In a prior episode we discussed the tactical approach for tech in compliance; where a compliance professional can bring a tech solution to the plethora of administrative tasks which inundate every corporate compliance department. However, Sehested said that even this approach could well have immediate benefits beyond the compliance function’s greater efficiency as it begins the journey to use data. Here you might even consider Edward Deming’s well-known adage, “In God We Trust, all others bring data.” By using a tech solution to move a compliance function away from mundane administrative tasks, you begin to create a culture around data. This weans a corporate compliance function from the legalistic approach, which is primarily taught in law schools, to an evolving business process approach.
From this perch it is easy to see that all the data flowing through (or at least should flow through) a compliance function. It can range from employee gift, travel and entertainment (GTE) spend, charitable donations, commissions paid to third-party sales agents, corporate social responsibility (CSR) information, marketing spend and overall sales figures. If this amount of data can be accessed and then analyzed, you would have a well-spring of information to make your company run more efficiently.
It all begins with multiple sources of data which flow through the compliance function but moves on from there. If someone actually looked at the data, you could see where the inefficiencies in your own sales process were and actually increase efficiencies in your sales process. With such data, the compliance function could partner with other corporate functions to help determine greater business efficiencies, all while maintaining and even enhancing a corporate culture around doing business ethically and in compliance. A corporate compliance function should be closely aligning with multiple other departments, sales, procurement, finance and internal audit to name a few. Yet even the work with outside stakeholders, such as third-part sales agents or distributors, can be a part of this regime by sending out questionnaires and communications around compliance. Sehested sees this as “deploying different strategies of nudging to make sure that they influence their vendors to think the same way as their employees, when it comes to being ethical.”
How does a Chief Compliance Officer (CCO) make this pitch to a CEO or senior management? This is where Deming and Sehested come in as it is all about the data, not just the raw data but how it is presented. As a CCO, you need to come up with reports, backed up by the data to support these assertions. Sehested can attest that CEO’s have a wide variety of demands on their time so the more concise and direct you can be, the better it will be for your case. Use data, case studies and graphics to demonstrate not only the cost savings but the increase in efficiencies.
The opportunities for the compliance function to improve overall business efficiencies are only beginning to be appreciated. Moving from the legalistic approach to a more data driven business process is what the Department of Justice (DOJ) intoned in its 2017 Evaluation of Corporate Compliance Programs (Evaluation). As compliance programs and the compliance function continue to evolve into the 2020’s; those who are truly innovative will use the data to help drive business ethics. Having insights from someone outside the compliance space, such as Sehested, can help drive that innovation.
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