Updated: Nov 16, 2021
When companies decide to improve their compliance they soon realize that their good intentions are often thwarted by their own organizational culture. This may take on various forms but in the end the root cause is always the same – excessive reactivity.
A predominately reactive culture is one that has been reinforced by years of following an audit/fix cycle where companies wait for something bad to happen, gaps to be found, or incidents to occur before any meaningful improvement is made to their compliance. These organizations may even take on the mantra of continuous improvement in hopes of breaking free from this trap and finally get on top of all their obligations.
However, just like financial debt, the higher the principal and the greater the interest rate the worse things get and the faster things get worse. No matter how many payments are made by closing gaps this strategy is far too slow and too late to keep up with the speed of risk both for financial as well as compliance debt.
To escape this trap organizations need to address the root cause and change their behaviour from being predominately reactive to one that is proactive. A culture that is proactive anticipates, plans, and strives to make an impact which for compliance is the reduction of risk.
For compliance to be effective it must at its core be driven by risk-based principles reinforced by proactive behaviours. This is the only way for companies to achieve greater resiliency, reduce the risks that really matter and meet all their stakeholder obligations.
The following is a video recording of a webinar we presented that dives deeper into how the compliance landscape has changed and 10 principles you can use in your organization to escape the reactive compliance trap and finally get on top of all your obligations:
More articles on the topic of effective compliance can be found here.