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Measuring Compliance Effectiveness

Establishing and maintaining compliance is an objective of many organizations. However, many do not measure the effectiveness of their programs (75% according to HBR do not). This means they don't know if their compliance efforts are helping or hindering meeting their regulatory or voluntary obligations.



A Measure of Effectiveness


An important question to answer is how should compliance effectiveness be measured? How is compliance progress measured?


Mark Burgess (author of Promise Theory) defines effectiveness for purposeful systems as:

Definition of Compliance Effectiveness
Definition of Compliance Effectiveness

Effectiveness = Promises Kept / Promises Made

Promises are the operational component of obligations. They define the commitments organizations make to meet obligations associated with both a regulatory license and social license to operate. The latter being mostly "voluntary" and tied to sustainability, ESG, and other stakeholder expectations.


Examples of promises:


  • The internet service provider promises to deliver broadband internet for a specific bandwidth for a fixed monthly payment.

  • The security officer promises that the system will conform to security requirements.

  • The support personnel promise to be available by phone 24 ours a day.

  • Support staff promise to reply to queries within 24 hours.

  • The ERP cloud provider promises to provide 99.9999% service availability.

  • We promise to reduce our emissions by10% year over year.


Compliance effectiveness can be calculated by measuring if these promises have been kept over a specific period of time.


According to promise theory keeping a promise is necessary but not a sufficient measure for whether obligations are met. Only the agent imposing the obligation can make that determination.


This is similar to the difference between verification and validation in the medical device and pharma industries. Verification tests that a device (for example) works as designed. Validation tests to see if the device delivers the intended benefits.


For most organizations verifying that their compliance systems are effective at keeping organizational promises is a good first step.


More information about promises and obligations can be found here.

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