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Compliance Trends Reflect the Impact of Covid-19 Realities

Feb. 2, 2022, 9:00 AM

As we enter the third year of the Covid-19 pandemic, we can be forgiven for stepping into 2022 with some weariness. Two years of unprecedented disruptions have taught us that even the best made plans can be changed in an instant.

There are, however, observable trends that impact corporate compliance, and understanding those trends can help us remain agile and resilient.

Covid-Related Risks and Compliance

Covid-19 has made the link that I have long advocated between traditional compliance and health and safety compliance. This pandemic and its direct and indirect consequences will continue to reverberate throughout 2022, with continuing issues such as vaccination and mask mandates, remote work flexibilities, and infection-related liabilities.

While traditional safety and health compliance focuses on employees in specific roles, these Covid-related measures touch all employees, and have profound impact on morale and employees’ trust in the company and in each other.

The Great Resignation

An analysis of the resignation data indicates the greatest resignation increase rates occur in the 30-year-old to 45-year-old mid-level employee population. The resignations also impact certain industries—e.g., health care and tech—more than others.

For highly impacted companies, this represents is a de-stabilizing influence in the companies’ cultures. The experienced mid-level employees are turning over, the new employees are increasingly left to learn the ropes on their own, and mistakes may not be caught in a timely manner.

Companies will need to be more flexible in many ways to attract or retain talents: where and how they choose to be flexible may create new risks.

Mid-Term Elections

The possibility of losing the congressional majority may increase the sense of urgency for the Biden administration’s priority agenda. This can impact enforcement as senior officials allocate their attention and resources among competing areas of enforcement (antitrust, cyber, trade, civil rights, pandemic-related fraud, privacy, corruption, etc.). Some may choose quick wins over longer-term investigations or initiatives.

Politics are in the boardroom and workplace: Companies are seen as taking sides in the decisions they make, and individuals bring their strong views to work. These decisions and views come with “ethics” and “value” labels: vaccine mandates debates, for examples, are couched in values and ethics terms about individual rights vs. the rights of people who interact with you.

Growing Adoption of Data-Analytics

As an early advocate of using data analytics in compliance, I am pleased to see the widening adoption of the practice. As a result, more and better data are becoming available. There is also movement to pool data from among companies.

As the data get bigger and better, what we learn from these data may lead us to question long-held assumptions, raising questions such as what effects policies and trainings have on actual behavior.

What can corporate ethics and compliance (E&C) functions do in light of these trends?

Understand the Complexities of ‘Culture’

Whether to retain talents or to monitor risks, keeping your fingers on the cultural pause will be critical. Many in the E&C world speak of culture as if it is the same throughout an organization, and as if there is universal understanding about what are the “right things” and wrong things to do.

Culture, however, is complicated; and assuming “value” and “ethics” and “right” mean the same thing to everyone is misleading. This year will see the continuing shifting and splintering of societal and organizational cultures. Only by understanding the nuances and complexities of culture would we be able to understand the new emerging behavioral risks.

Broaden your risk radar coverage. I have always advised E&C functions to think beyond Foreign Corrupt Practices Act (FCPA), and I now do so with urgency.

Enforcement risks exist in areas that are outside of the comfort zone of many traditional E&C professionals, requiring both vision and competencies capable of constantly scanning an ever-changing landscape that mixes law, data, technology, and science. The E&C functions that will be valued are the ones that embrace the challenges, and those that shy away from stepping up will be seen as outdated.

Use data as evidence. When used as smart measurements, data can provide evidence to test our assumptions and strategies.

Is a long and detailed policy better at communicating its core message than a short one? Does training actually enhance diversity? Do dollar thresholds on expenses encourage people to spend up to the limit? These are only a few of the questions that companies are already experimenting and answering with compelling data.

Reach out and listen. Listening is also perhaps the most useful—yet most under-utilized—tool in an era of rising conflicts and constant tension. Strong listening abilities not only help de-escalate tension, but also help earn trust and credibility.

Set up outreach meetings with new hires, long-time employees, mid-level managers: not to talk at them about what you want them to do, but to listen and learn their perspectives and challenges. I guarantee you will walk away with insights that will make your ethics & compliance program better.

This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Hui Chen is an independent ethics and compliance consultant and was the Justice Department’s first-ever compliance counsel expert. She has served in global senior compliance lead positions at Microsoft, Pfizer, and Standard Chartered Bank.

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