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Knowledge To Help Elevate Your Compliance

How to Define Compliance Goals

Properly defining and setting goals is critical to mission success including the success of environmental, safety, security, quality, regulatory and other compliance programs.


However, defining compliance goals remains a real challenge particularly for obligations associated with outcome and performance-based regulations and standards. When these goals are ambiguous or ill-defined they contribute to wasted efforts and ultimately compliance risk for an organization.



To be more certain about goals we first need to define what we mean by a goal and such things as objectives, targets, and the like.


The following are definitions we have used that lay out a framework for goal-directed obligations.


Outcomes


These are the ends that we expect to attain over time where progress is expected through the achievement of planned goals. These are often described in qualitative terms but may also have defined measures to indicate and track progress towards the desired outcome. An example outcome would be achieving carbon neutrality by 2050.


Goals


Goals are defined measures of intermediate success or progress. They are often binary akin to goal lines that are reached or not. Goals are usually associated with outcomes and are long-term in nature whereas targets tend to be associated with performance and are short-term.


There are two kinds of goals, terminal and instrumental:


  • Terminal goals are the highest level outcome that we want to reach. They define the "ends" of our endeavours. For compliance these might include: zero defects, zero fatalities, zero violations, zero releases, zero fines, and others.

  • Instrumental goals are intermediate outcomes or results that are critical or that must occur in order to achieve the higher-level outcome. These are often used to define measures of effectiveness (MoE) for compliance programs as they provide clear indication of progress towards terminal goals.


Objectives


Objectives are the results that we expect to attain over a planned period of time. These results contribute to (or cause) progress towards the targeted outcome. An outcome may require several objectives done in parallel, sequentially, continuously, and some contingent on others.


Some form of causation model (deterministic, probabilistic, linear, non-linear, etc.) is needed to estimate the confidence level of creating the desired outcomes using planned objectives. In cases of greater uncertainty these models will be adjusted over time as more information is gathered and correlation between objectives and outcomes are better known.


Risk


Risk is defined (ISO 31000, COSO) as the effects of uncertainty on objectives which involves having a causation model. In practice, outcomes tend to be more uncertain than the achievement of objectives. However, everything happens in the presence of uncertainty so it is important to properly identify uncertainty and contend with its effects.


There are two primary forms of uncertainty:

  • Epistemic uncertainty; lack of knowledge or know how; this risk is reducible. Reducible risk is treated by buying down uncertainty to improve the probability of meeting each objective.

  • Aleatory uncertainty; caused by inherent randomness or natural/common variation; this risk is irreducible. Irreducible risk is treated by applying margin in the form of contingency, management reserve, buffers, insurance and other measures to mitigate the effects of the risk.


Targets


Targets are a measure of performance (MoP) or progress when connected to an objective. These targets may be a single point or a range (min and max) of performance needed to achieve an objective.


Strategy


Strategy defines a plan for how goals, objectives, and targets will be obtained.


Strategy is the approach to create the desired outcomes as measured by terminal and instrumental goals by achieving planned objectives at the targeted levels of performance, in the presence of uncertainty.


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