Today, I posted this week’s episode of Compliance into the Weeds where Matt Kelly and myself looked at the Securities and Exchange Commission’s (SEC) mandated human capital disclosures that have begun to appear in corporate annual reports. This podcast got me thinking about the human capital issue in the compliance context. I recently came across a Harvard Business Review (HBR) article, entitled “The Most Pressing People Questions Facing Companies Today”, by Dambisa Moyo, that takes this human capital down to a macro level and I thought it presented some important questions for every Chief Compliance Officer (CCO) in today’s workplace.

Over the past 11 months, many companies have focused on their operational and financial issues to help deal with the economic shock from the coronavirus pandemic. They have also focused on such issues as “employee health and safety, protecting the corporate culture, and ensuring that their companies are running efficiently.” Moyo believes that we are at a point where a deeper set of employee-related issues will dominate corporations in the post-Covid period. There are at least five “people” questions that companies will need to address as they emerge from the pandemic and the period beyond. I have adapted them for the compliance perspective.

More Automation and Tech

The pandemic has clearly sped up the process of automation and the greater use of technology in every corporate discipline, including compliance. When you couple this with the Department of Justice’s (DOJ) prescription for increased use of data and data analytics by the corporate compliance function, every CCO should be planning for more aggressive digitization as well as re-casting the compliance structure. This includes attracting compliance practitioners with skills for the future and equipping the current compliance function with technological skills needed for 2021 and beyond. One classed in law school on compliance will no longer cut it.

Moyo believes we are at a “once-in-a-generation structural shift that will redefine how a company operates”. This means a radical rethink by CCOs and thought leaders in our profession. She believes it should be approached  “with a number of key questions in mind: What is the ideal size of the [compliance] workforce, and how much capital should the company commit to sustaining it? Which [compliance] operations and roles will no longer be needed? Which emerging areas and [compliance] roles should the company be investing in? Which [compliance]  metrics can management track to gauge a smooth transition to more automated [compliance] workforce? What investments should they make to reskill and attract the [compliance] workforce of the future?”


Many companies are struggling with the question of where employees should be working. Yet, Moyo believes that organizations “should be advancing remote working plans to manage their organizations.” Every CCO should be asking these or similar questions, including: “At what proportion of remote work can a company efficiently run its operations over the long run? Which parts of the production line are more naturally equipped to be developed remotely? Rather than adopt a blanket policy, can the company accommodate remote working plans for individuals? How do existing metrics for performance, pay, and promotion stand up to a more remote work environment? How can company preserve its culture amid greater remote working?”

It is that final question which may, at the end of the day, be the most challenging and most important to the compliance professional. How should CCOs and corporate compliance functions work to “protect their culture as the workforce becomes more diffused and workers work remotely? In particular, how will you ensure all employees, especially newer and younger employees who have not yet built established contacts, remain wedded to the corporation’s culture and purpose and do not feel isolated and not connected to a team?”

The bottom line is that CCOs need insure that WFH is sustainable, “in the sense that it defends the company culture, enables the company to grow, that the company is profitable, and that it meets customer and societal needs while being home to happy and engaged employees.” Some companies, such as Gitlab, have demonstrated this can be done with a near 100 percent remote workforce. Yet it will require new and innovative ways to communicate, assess and drive corporate culture.

Engaged Stakeholders

Moyo believes “People issues are no longer only about a company’s employees.” This was further borne out by the SEC, which, as Kelly noted, “adopted rules last year requiring publicly traded companies to include a discussion of their human capital issues in their annual reports.” But it is much broader than simply the SEC. In addition to the “regulators, customers, shareholders, or communities, many corporate stakeholders are becoming more vocal, expecting details on everything from the average wages paid and worker conditions to the provenance and environmental impact of their products.” Further, “Employees are sharing details on company culture and practices on digital platforms, such as Glassdoor, Blind and The Layoff. Customer complaints on social media can go viral in an instant.”

All of this means CCOs “need to build new strategies, skills and processes to handle this feedback and foster better engagement with all stakeholders.” This includes “sourcing the views and incorporating the perspective of all stakeholders into an overall decision-making process. Used proactively, digital platforms give management an opportunity to track timely, first-hand, unfiltered customer and employee sentiments that they may wish to react to.”

Culture, Culture, Culture

As a final point, even broader than the five stakeholders identified in the Business Roundtable’s Statement on the Purpose of a Corporation, is Moyo’s final query, when she stated, “leaders will need to adapt their organizations to reflect a broader purpose beyond generating returns for shareholders.” This means being a good corporate citizen through a superior corporate culture.  Moyo poses several questions which may initially seem outside the purview of the CCO but upon greater reflection are questions about Institution Justice and Institutional Fairness. They are: “Who should be deemed employees? Is it just full-time workers on a company’s roster or should the definition of an employee broaden to include sub-contractors, suppliers and zero-contract workers?” A CCO or compliance function may well be required to assess whether digitization will undermine efforts toward more diversity and inclusion in the compliance function. Moyo concludes her piece by stating, “However, each of the people issues on this slate/discussed here carry enormous systemic risks to the organization and its reputation. Addressing them now will ensure that your company emerges from the pandemic stronger and ready to face the future.” Every CCO and compliance practitioner needs to think about these issues as well.

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© Thomas R. Fox, 2021