Rethink the people side of compliance – Part II: Culture

Isa Dora de Maddalena Manager, People & Organisation Consulting, PwC Switzerland 02 Mar 2021

Our insight paper Future of Compliance: Not sleeping at night introduced three important areas to consider when evolving compliance: people, technology and operating model. This chapter on people as one part of this trilogy focuses on skills of employees and culture in an organisation.

Why is corporate culture in compliance management important?

Consider the plethora of compliance issues organisations faced in the last few years, such as possible discrimination inherent in facial-recognition tools, the Volkswagen emissions scandal, or massive cyberattacks and security breaches, which only increased with the coronavirus pandemic.

The reasons for these breaches are manyfold. However, one underlying force is the compliance culture in an organisation, which can either prevent or promote non-compliant behaviour. By culture, we refer to the self-sustaining patterns of behaving, feeling, thinking and believing – that determine ‘how we do things around here’.

‘Self-sustaining patterns’
because culture has inertia—without a really strong and persistent force, it won’t change its course.

‘Behaving’
because what people feel, think and believe is reflected in—and shaped by—their daily behaviours.

‘Feeling, thinking and believing’ 
because both the emotional as well as the​ rational sides matter.

A company’s strategy, operating model and culture must be coherent for business success. We also believe that cultures evolve much more slowly than strategies or operations – that’s why the sooner you start, the better!

How can you create a compliance culture?

You can create a compliance culture by generally focusing on behaviours of the employees.

There are four steps you need to consider when creating a compliance culture:

  1. Diagnose the existing culture: With a culture diagnostic you can generate a ‘thumbprint’ of your culture with associated strengths and challenges to understand the existing culture. Based on your strategy programmes, define your culture aspirations.
  2. Focus on the ‘critical few’ behaviours: Behaviours are powerful because they have the ability to rapidly drive changes in business performance and culture. Critical behaviours are drawn from strategic and cultural priorities, e.g. compliance, and are illustrated differently for different levels and subgroups of employees.
  3. Integrate formal and informal enabling mechanisms: Such mechanisms could be adjusting incentive plans, policies and processes as well as tone from the top and an authentic informal leader network respectively.
  4. Measure results: Measurement is critical to success – yet many organisations measure the wrong things and measure too infrequently and in the wrong ways. Use a combination of different metrics, such as skills and capabilities as well as behavioural and business metrics. Measure frequently to steer success effectively and promote two-way dialogue to enable leaders to connect the dots based on what employees have to say, not just on movement in scores.

The role of the chief compliance officer is key

The creation of a healthy compliance culture depends heavily on a positive standing of the chief compliance officer within the organisation as well as on their engagement with the organisation’s day-to-day operations and initiatives.

Key takeaways
  • The culture of an organisation determines to a large extent the degree of compliant behaviour of the organisation and its employees.
  • If you aim at influencing your culture to promote compliance, focus on behaviours – the behaviours which you consider as most critical for a more compliant organisation.
  • To promote the critical behaviours, implement formal and informal mechanisms and measure frequently.

If you’re eager to learn more about how to build the right team with the right skills and how to influence your culture, read our deep dives on culture and skills. You can also contact us directly to learn how your organisation could benefit the most.

Download publication

#social#

Are you curious about how you can influence your organisation’s compliance culture? For more details check out our deep-dive paper!

Download publication

Contact us

Isa Dora de Maddalena

Isa Dora de Maddalena

Manager, People & Organisation Consulting, PwC Switzerland

Tel: +41 79 157 27 56

Lisa Daniells

Lisa Daniells

Director, People & Organisation, PwC Switzerland

Tel: +41 25 792 26 85

Sandro Ricklin

Sandro Ricklin

Advisory Manager, PwC Switzerland