In a recent blog, Michael Volkov noted five ingredients to ensure a culture of compliance. Why should you care? It is quite simple, firms that do not promote a culture of compliance are bound to find themselves face to face with their regulator, and not at a holiday party sharing cocktail weenies.
- Leadership from the top of the corporate ladder down to the bottom.
- Internal firm communications that promote ethics and compliance to everyone in the organization.
- Devotion of the resources necessary to measure the company’s culture of compliance and reporting that culture to senior management.
- A dedication to be responsive to unpredicted external forces; i.e., market collapse, economic downswings, etc.
- Accountability up and down the entire corporate chain.
There are certainly other things that firms can do to promote and ensure a culture of compliance, but these ingredients, as Volkov describes them, are mission critical. The one thing that each has in common is a reflection that any sound culture of compliance starts from the top down. It never works from the bottom up.
Management sets the tone for everything done at a firm. If management does not buy what it is selling, you can never expect lower level employees to accept the culture of compliance. When management is willing to stand up and be accounted for, then the “rank and file” will surely follow. Don’t lead, and find yourself on the corporate compost heap.