Society is governed by a series of rules that help keep interpersonal relationships balanced. Within the communities formed by us humans, there are small sets of norms that ensure the well-being of the whole group.
In the corporate world, it is no different. Rules exist there too, and they must be followed by every individual. The term compliance, or compliance management, comes from the English expression "to comply," meaning to act in accordance with an order.
Compliance can change from company to company, since every business model is unique. However, some moral standards are universal, especially when the focus is on fighting corruption, fraud, and other irregularities.
Compliance management aims to ensure corporate integrity, and to achieve that every company needs to create its own code of conduct so that its leaders and employees follow and respect all the rules.
If you are creating or adjusting your company's compliance manual, pay attention! In this article we will explain how to build this material and show why it is so important today.
Happy reading!
What is compliance?
Compliance is nothing more than the set of activities designed to maintain order within a business. As with any group in society, a company also needs to develop its own rules if it wants to preserve corporate integrity.
The rules created by compliance management also relate to the work of leaders and employees. Anti-corruption standards, for example, must be applied to eliminate injustice and favoritism toward certain parties.
Here is where the main rules are concentrated:
Labor obligations, which are usually tied to the company's culture;
Ethical conduct, which is the behavior expected from employees, inside and outside the business.
In some cases, the company establishes that employees are prohibited from getting romantically involved, on the grounds that it can harm the group's well-being and performance at work. Meanwhile, other companies allow this kind of relationship, but with a few caveats that help maintain order.
What we understand about compliance and its management is that these are governance policies necessary to keep the organizational environment in good shape. Many are tied to moral precepts, while others vary according to the culture of the business.
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Why is compliance important today?
Compliance is important today because it establishes rules and maintains the integrity of an environment.
Just as in the study of ethics and morals, companies are governed by moral standards based on the context of the environment. Guided by these rules, employees must act with integrity so as not to harm the business.
In this sense, we can say that compliance acts as the "police" of the corporate environment, capable of investigating cases that stray from internally established norms.
It can also be seen as a watchman, observing and monitoring employee behavior daily so that no one commits acts inconsistent with the pre-established rules.
Without compliance, the workplace becomes a lawless land.
How to apply compliance in practice
Compliance management goes beyond dictating what is right and wrong. Although many standards are based on these precepts, the rules must be grounded in individual morals and recorded in a manual to be shared with employees.
In practice, those responsible for compliance must develop an official document that is always up to date and easily accessible to all members. It should be shared with employees frequently, especially if turnover is high.
Sharing it through communication channels such as Slack can be a good idea. On Slack, the material can be shared in groups or sent exclusively to a single employee.
Beyond that, there are other worthwhile actions that should be applied to ensure the rules are followed. They are:
Blend compliance with the company's values. When the manual says favoring certain employees is prohibited, for example, that anti-corruption mindset should be encouraged in the company culture.
Spread some of the rules recorded in the compliance manual during important meetings. It is worth noting, however, that this must be done carefully so as not to intimidate leaders and employees — only to reinforce day-to-day adherence to the rules.
Communicate that compliance is a trend in business management, so that leaders and other employees take an interest in keeping up with the pre-established rules.
How to create a compliance program
Developing a compliance program is not necessarily difficult. It does, however, require the person in charge to follow a few steps, and these will dictate the structure of the company's internal code.
Although predefined compliance templates are available online, professionals should base their work on the particularities of their business rather than on generic values.
Here is what you need to build the manual according to your business needs and to run good compliance management:
1- Risk assessment
Those responsible for developing compliance should always start with a risk assessment. This first step is important to identify the company's main ethical issues, which can undermine the integrity of employees and leaders.
It is worth noting that small tribulations are common in the corporate environment. But compliance management needs to pay attention to the scale of the problem and assess whether it could become a frequent situation that disrupts corporate governance as a whole and the group's well-being.
2- Creating an ethical environment
Once the risk assessment is done, the compliance material must be developed to prevent mistakes from happening — or from happening again.
The first presentations of the material should be made in groups, so employees truly understand the company's values. Then, make sure the document is available for everyone to consult whenever necessary.
3- Developing control activities
The third step requires developing tasks that respect the rules created by compliance management, since employees need to get used to the rules.
If hiring by referral used to be common and the manual now prohibits that kind of action, for example, the entire recruiting area must reinvent itself to align with the new organizational values and pass them on to the other members.
At this point, resilience will be required from everyone. Employees who do not understand or do not feel comfortable with the rules established by compliance may end up leaving the business — which will cause some imbalance at the start of implementation.
However, remember that this is a common movement. Even if the company suffers losses at first, it is important for everyone to be in tune with the norms and values established by the leaders in charge.
4- Structuring channels and other processes
Now it is time to structure the communication channels so compliance is shared correctly. The suggestion here is to present the material during new employee onboarding and to hold group meetings every two months to reinforce the code of conduct among the rest of the team.
This reinforcement can be done through communication channels such as Useall Corporativo. There you can create posts in the discussion group and keep the manual on record.
It is important that these values are also spread during results presentation meetings. The more the rules established in the compliance program are discussed, the more employees tend to internalize the company's ethics.
5- Monitoring
Finally, compliance must be monitored.
This practice can be carried out by leaders from different areas or by a single department responsible for compliance. Regardless of how monitoring is done, what matters is that those in charge always check whether the rules are being respected by everyone.
If a rule is frequently broken, the company should rethink how the rules are applied — including whether the rule makes sense or whether employees truly understood its purpose.
Final thoughts
Creating a compliance program is extremely important so that all leaders and employees are aligned with the company's mission and values. It also prevents setbacks from disrupting the group's development and internal activities.
As complex as the term "compliance" may be, building and applying it is necessary for business success. After all, if every member makes decisions based on the pre-established rules, the company will stop suffering from failures and lapses in ethical conduct.
If you enjoyed this topic and want to stay on top of business management news, keep reading the Useall blog and explore more content like this!
Originally published in Portuguese at useall.com.br.