In a recent article published by the Harvard Business Review titled “Compliance Alone Won’t Make Your Company Safe”, David De Cremer and Bjarne Lemmich explore the growing trend of companies boosting their compliance teams in reaction to regulatory lawsuits against them.
According to the article, increasing the number of compliance officers has been the “dominant response” by companies that realize they don’t know everything that’s going on under their roof. In fact, Jamie Dimon, the CEO of JP Morgan, said that they’ve hired an additional 13,000 people to work in the area of compliance since 2012, and they have plans in the works to grow that area of the company even more. Why? Well it appears that these companies believe that the more emphasis they put on compliance, the more likely it is for dirt to come to the surface, and the less likely they are to be sued by a 3rd party.
Unfortunately, the rise in compliance officers could also mean the demise of your company’s culture. According to the authors, while your company may have employees with varying degrees of business integrity, compliance programs can create a “policeman culture” that divides staff members. Additionally, De Cremer and Lemmich proclaim that “one shortcoming of compliance programs is that they assume misconduct comes from bad apples, rather than good people doing bad things.” This can lead to a culture where employees who make mistakes become disengaged from their teams and organization, rather than being forthright with compliance officers who may not be so forgiving.
The question remains though: how should leaders react to lawsuits? Hiring compliance officers might look good for PR, but does that actually address the real problem? If we look at this through the lens of a company fresh off a TCPA violation, they don’t need compliance officers, but rather a way to prevent non-compliant leads from entering their system in the first place. It makes far more sense to invest in prevention so that your sales reps are only calling consumers who have given consent, rather than compliance officers who can only react when problems occur.Business & Finance Articles on Business 2 Community