Creating Effective Compliance Programs
Written by Jessica Bejarano, PAE Chief Ethics and Compliance Officer. The below article appeared in the February edition of the National Defense Industrial Association's magazine.
Enforcement of government contract regulations has become increasingly vigilant. An effective compliance program, as opposed to one that looks good on paper and sits on the shelf, is critical to satisfying and exceeding the U.S. government’s requirements.
An effective compliance program should be incorporated into and visible within a company’s culture. Employees should understand the company’s core values, practice them and speak up when they have a concern.
The foundation of any program is consistently communicating to employees the importance of compliance. Like many other government contractors, PAE’s workforce comprises many nationalities, languages and cultural norms, which can present a challenge to effective communication. With such a diverse workforce, the definition of the gold standard in ethics can be interpreted differently across various cultures.
For example, gratuities that are highly regulated in the United States may be viewed as a minimum courtesy in other parts of the world. With differing cultural norms and a matrix of regulations that apply in certain locations, communicating a universal message regarding the importance of compliance with relevance to all employees is a balance of art, science and legal acumen.
Against this milieu, PAE has relied on several touchstones.
First is the need to talk about the issues. Many companies require employees to participate in annual compliance training. While standardized training serves a purpose, it is very effective to host compliance risk discussions specific to our industry with our managers. A two-way discussion of the real-life scenarios and mitigation tactics can often be much more useful than the hypothetical examples in a training program.
Following these discussions, managers can provide the take-aways to specific employee populations that would find the message relevant. With this practice, companies invite managers into the process and create additional compliance stewards who can help communicate requirements, and identify and manage risks when they arise.
It is also important to establish common ground. With any workforce, it is important to demonstrate inclusiveness and respect diversity, while at the same time highlighting the common core values. While celebrating the company’s diverse cultures, everyone must understand that all employees “wear the same company color” and are expected to respect and uphold the company’s values.
Also, technology should be leveraged, but with a back-up plan. With increasingly global operations and workforces, companies must ensure that their compliance messages make their way over borders. When utilizing online training tools, ensure that your training sites are equipped with the minimum bandwidth required to stream the tool. When holding discussions over the phone, ensure that your training site is equipped with translators or personnel who can help communicate/translate your messages to every employee.
Also, any training or directive should be relevant to the specific audience. When communicating to a specific program in a specific location, craft the message so that it addresses the specific challenges of that program. Seek feedback to ensure that the message is relevant and encourage suggestions for future topics.
It is also crucial to empathize with teams. It is all too easy for a compliance program, managed from a company’s corporate office, to slip into the stereotype of an ivory tower, issuing mandates from above and completely disconnected from the realities of the field. If compliance professionals do not make an effort to relate to the workforce, they can be sure that eyes will roll at the mention of their office, and attention to the program will be threatened by thoughts of “they don’t know what it’s like.”
Make it a point to understand the challenges a workforce faces. Dig in and ask questions to understand the sort of effort you are asking of the team. Taking the time to walk in their shoes may help identify new and more effective ways to train and communicate. Compliance officers can gain insight and a level of sensitivity that would never be attained by sitting at a desk. More importantly, it will help build trust and credibility between the compliance office and the operations teams.
Lastly, it is necessary to provide tools for reporting concerns. Create and communicate a process for employees to report concerns without obstacles. Sometimes a company’s geographical dispersion or an ingrained chain of command can create a culture in which employees feel that their communication options are limited. It is essential to provide a “life-line” for employees who may not feel that they can report concerns and misconduct within their chain of command.
Create an ethics hotline with a toll-free international number hosted by third party vendor. Advertise the hotline poster in administrative and living areas. Ensure that the posters are translated in the languages spoken at the site. All companies that contract with the Department of Defense should consult 48 CFR 252.203-7004 when creating and posting these notices.
An effective compliance program is not implemented without considerable effort and commitment from leadership. But with the increased level of scrutiny on contractors, the results of an effective program are well worth the investment.
In addition to the protection that it can offer a company, a visible compliance office is usually appreciated by employees because it fosters a safe space where they can report concerns and symbolizes the conscience of a company. When employees perceive that great care was given to create and implement a relevant, inclusive and empathetic approach to compliance, they are much more receptive to adopting the company’s core values and reporting concerns that could pose a threat to the company.
And that is the ultimate measure of success for any compliance program: widespread adoption of and adherence to company values and the empowerment of individual employees.