2020 is a milestone that represents “the future of work” – a more efficient world where we can scale our guidance to employees in real-time and have data inform our corporate governance decisions. Even so, we’ve experienced several recent culture failures stemming from the same governance dynamics that seem to cycle through every generation. Before we envision compliance tech and the future of work, let’s review the past cycle of governance failures.
New Business Models, New Compliance Issues
Twenty years ago, businesses started leveraging the web and tapped into hyper-growth. We discovered that businesses in new markets, experiencing exponential scaling will trigger corporate governance and compliance issues. We experienced Enron, World Com, Arthur Anderson and a host of dot com businesses that prioritized growth over sound decision-making and corporate governance. Many of these businesses came crashing down, and hundreds of thousands of investors and employees were harmed.
To prevent this type of harm in the future, Congress passed the Sarbanes-Oxley Act in 2002 (SOX), which is designed to help protect investors from fraudulent financial activity. SOX joined the Federal Sentencing Guidelines to provide guidelines on corporate behavior and sound corporate governance.
Today we’re in another cycle of new business models and hyper-growth. And without thoughtful governance and effective ethical leadership, we anticipate continued compliance and ethics failures.
We’ve already experienced Theranos, a medical device business that accepted hundreds of millions of investment dollars for a product that did not work and potentially put the public at harm. We’ve had Facebook, our largest social media company, which allowed Russian interference in our last election for the sake of advertising dollars. Or Uber, which tolerated an environment of sexism and harassment while it seemingly allowed its chief architect to steal trade secrets from his former employer — Google’s Waymo. So, it’s probably fair to say we’re in another cycle of compliance issues stemming from new business models and hyper-growth.
Avoid Another Wave of Compliance Issues
Given that we may be poised to experience another cycle of compliance issues, it’s time for companies to take this great opportunity we now have to use these cutting edge technologies to scale our compliance capacity to provide employee guidance in real-time. Technology can also enhance our role as a strategic, trusted advisor to the business, as through the use of data we can deploy our resources to identify and target our biggest compliance risks.
We can use technology and AI to provide employees direct access to compliance and ethics guidance just in time – when and where they need it. Compliance Officers and HR know we need to do more than send out the Code of Conduct training every year to align ethical behavior and provide guidance on company policy. So, here are three ways you can influence employee behavior and support sound corporate governance:
-
Continuous Learning
We’ve learned from marketers that people need to hear a concept about 7-8 times before it sinks in. It’s unrealistic to think someone will remember a concept or idea the first time they hear it. So, if you want to teach a concept, you need to introduce it in digestible nuggets and ideally, revisit the idea on a consistent basis to drive home the learning.
-
Scale Your Q&A for Real-Time Support
Ethical lapses occur when people make decisions in emotionally reactive situations. We are a society where people use Google to answer any question. We’re still relying on a pre-digital age system where, in many organizations, one compliance professional is expected to inform and guide the decisions of thousands of employees. We need to scale our capacity to help, by enabling increased compliance self-governance for employees by giving them a searchable index of questions, answers, and insights that they can access directly — without a middle person — and get information in real-time to help inform their decisions.
-
Polling and Surveying on Situational Dynamics
Compliance professionals are currently taking a “spray and pray” approach – addressing all issues equally without prioritizing the issues that are customized and targeted to address the employees’ knowledge gaps or trending concerns. Compliance professionals can start polling and surveying employees on the situational dynamics that impact the ethics of an organization, such as employees’ skill at good decision-making, trust, accountability, and the strength and influence of cultural norms. By getting a read on these four core situational dynamics, compliance officers can identify the organizational strengths and weaknesses and focus resources on addressing the weaknesses, rather than addressing all issues equally.
Conclusion
We’re in another cycle where new business models and the pursuit of hyper-growth will trigger compliance issues. It’s time to leverage technology to scale the compliance function and keep pace with the future of work. Modern compliance technology, including artificial intelligence (AI), will allow us to scale our capacity; provide real-time guidance to all employees when and how they need it; provide us data and analytics to target our efforts and better quantify organizational risk, and enhance our role as an effective strategic advisor to the business.
I recently joined Emtrain’s Founder and CEO Janine Yancey for a live discussion on LinkedIn where we covered all of these topics and more. Check out our recording here.
