Building a World-Class Compliance Program: Best Practices and Strategies for Success

Foreword

By Caren Gordon and Ronnie Kann^[1]

AN EVOLVING FUNCTION

The corporate compliance and ethics function has grown rapidly in the last few years in response to high profile governance failures and subsequent regulatory reforms. Companies have made unprecedented investments in compliance and ethics, launching new compliance organizations, building risk management systems, and rolling out more comprehensive mandatory training. This phenomenon has struck companies across a diverse set of industries, even those that have traditionally received less regulatory attention.

Now that most companies have established some basic level of compliance and ethics infrastructure, many are also beginning to evaluate whether that infrastructure is sufficient. Or, in some cases, they are simply transitioning into maintenance mode: solidifying their oversight and monitoring capabilities, building permanent structures, and ensuring ongoing awareness of compliance and ethics obligations.

A FALSE SENSE OF SECURITY

Despite these dedicated efforts, many organizations may have lulled themselves into a false sense of security. Recent analysis indicates that current control and training activities hardly seem to impact the outcomes that truly matter: (1) decreasing the likelihood of business misconduct and (2) reducing the fear of retaliation and discomfort raising concerns. In truth, employees are skeptical about their company cultures and their colleagues.

Simply put, there continues to be more widespread ...