Culture can cost you
A company’s culture is the very bloodline from which it operates in the marketplace. It should centre around company ethics and principles, which should be well-known by everyone working there, and always adhered to. This Heritage Month reminds us of what we have and instilling an ethical corporate culture in business can ensure it runs well and goes the distance.
According to the 11th annual Thomson Reuters Cost of Compliance Survey 2020, released earlier this year, the single biggest compliance risk facing those surveyed, was creating a unified compliance function.
This could be for a number of reasons, but ultimately speaks to needing everyone in a company, to be on the same page. Company procedures and compliance around them are there for a reason. Having these work well in unison makes for a great (and compliant) place to work.
Respondents of the Reuters’ survey were primarily on the board or compliance teams within various sectors across global financial services. The survey concluded before the Covid-19 pandemic took hold, but nevertheless tapped into some pain points being felt in the compliance realm. Key among them were culture risks.
Culture goes hand-in-hand with conduct
A reported 34% of respondents had turned down a potentially profitable business opportunity in the last year because of culture or conduct risk concerns.
Evidencing culture is a difficult task. How do you consistently prove what your company culture is? It isn’t something that is necessarily easily observed but it is something that can make or break what your company ultimately builds or leaves behind. Some company culture is consistent with high ethics and good morale, while other offices may fear senior management and turn a blind eye to misconduct. The latter is unlikely to leave a legacy of compliance behind.
There are many regulations to contend with in financial services compliance as it is, so having cracks in your culture can be a costly problem in the end. It is one that must be solved, and quickly. Imagine a crack on a building; it gets worse the more you ignore it. A robust repair makes for a solid structure you can trust.
A compliant culture
We know that trust in a financial services brand is essential. Consumers increasingly expect ethical behaviour from their service providers. With so many more of us working from home, and so many more of us operating online, culture and values count even more. Some adjustments may be needed, and a stricter policy for company conduct exercised.
Mandatory training came up in the Reuters’ survey as among tasks that can be outsourced. All staff need to go through the basic elements of legal and regulatory requirements, which includes company policy on ethics and conduct. Prioritising this, or outsourcing it responsibly is essential (and some things may have changed in the wake of Covid-19).
It was different when we were all in one office together, and arguably the culture risks have shifted dramatically. Companies need to be clear on social media conduct and online etiquette, as an example. Your activity is remembered in your internet history too, and whatever you post in the public space can become part of your story; good or bad.
Fortunately, regulatory requirements have placed the financial sector in a relatively good position. Business continuity regulations requiring digital back-ups are a pre-pandemic win. I feel hopeful because I sense that the local financial services industry is banding together in these tough times, and we are learning how to integrate new ways of working as time and the economy move forward. If we keep culture, and conduct top of mind, we should be able to keep going strong and hit the ground running once lockdown is eased to the lowest levels.