In this special five-part podcast series, sponsored by Gan Integrity, we have considered the evolution of compliance, from disconnected to connected. We have explored why compliance is disconnected and what can be done to connect it, how to build a connected compliance program and technology can help in this endeavor. The series has been a fascinating exploration of where compliance is in 2019 and where it is headed down the road. In this fifth and final episode, I visit Valerie Charles, the Chief Strategy Officer at GAN Integrity on what is the human side of connected compliance.
It is clear that the driving force for change in compliance is technology. The Department of Justice (DOJ) and Securities and Exchange Commission (SEC) have both talked about the need to incorporate technology into a best practices compliance program. Yet there still and will always be the need for human element in compliance. In many ways it is because a CCO or compliance practitioner is in a leadership position in an organization. I asked Charles, what qualities she thought made a top-notch CCO and she emphasized, “you have to be a strategic partner to the business and you have to be able to determine when your compliance team should be making judgment calls versus when you should be relying on kind of objective data.”
Obviously, this requires striking a balance, getting the uniformity so that you have predictability in the way that the organization is going to respond to issues. Charles stated, “as problems arise, this uniformity becomes important.” Yet the CCO must still factor in the human judgment. While you may have “this crazy technology that is fantastic, there’s no substitute for human judgment.” Where technology can come into play is around administrative or more rote tasks of the compliance professional. This means wedding the human judgement with the right set of data as inputs.
Charles sees the next step as “real-time transparency” where you are not simply setting up policies and procedures but overseeing them real-time, literally across the globe so that you are following compliance as it happens. This means the corporate compliance function has access and transparency, so that you are looking at objective data and have a close enough relationship with your eyes and ears and compliance team members on the ground where the business operates. This allows you to respond to things that are going on to change procedure, policy and react and even engage in discipline when necessary.
All of this is what the DOJ has articulated as operationalizing compliance. It first garnered attention in the February 2017 release of the Evaluation of Corporate Compliance Programs. Since that time, compliance practitioners have steadily worked to move their compliance programs forward onto the front lines of their business units. Connected compliance is one way to do so but it clearly requires a human element to not only interpret but to impart the appropriate or required compliance solution. Charles said, “I think operationalizing compliance means that you cannot have an annual or even quarterly update on what’s going on in the program. It must be operationalized in such a way that you are sharing information not only with the regional business units of floating up to the corporate compliance folks, but also sharing information back and forth with the other business units, procurement, finance and reacting in real time.”
Connected compliance also works towards elevating the compliance function within the organization. Charles said, “for compliance to be effective, you have an understanding of the business and even frankly a more fundamental way than the legal department. You need to know how money flows through the business to be able to figure out where controls need to be. You must know and understand onboarding and the full lifecycle of relationships with your employees, with your outside third parties and your business partners.” She concluded that if your compliance function does not have involvement and buy-in from at a minimum HR procurement, finance and audit, “you don’t really have a working program.”
We ended with exploring how can compliance professionals and compliance officers advocate for a more connected compliance program within their organization? Charles said it begins with recognizing you many need a solution without any glaring problem in front of you. If you have multiple reporting systems, that alone will create inefficiencies. What can you do to reduce this number? Consider implementing a standard platform that gives you the ability to have data feeds that would present a real-time graph or chart within a dashboard. All of these will help you to have both a more robust compliance solution and bring greater value to your organization.
The human side of compliance will never go away even as there is an enhanced technological solution. These factors help make compliance one of the most exciting and rewarding professions around. It is why I claimed the mantle of the Compliance Evangelist and why I am so passionate about the compliance profession.
As we conclude this special podcast series on connected compliance, you can see the need for an enhanced technological solution around compliance, coupled with an ever-growing human side to compliance. These factors help make compliance one of the most exciting, rewarding professions around. It is why I claimed the mantle of the Compliance Evangelist and why I am so passionate about the compliance profession.
For more information on how connected compliance, visit our sponsor Gan Integrity Solutions, Inc. at www.ganintegrity.com.