User Satisfaction Metrics. When it comes to ethics and compliance messages being heard, absorbed and acted on, timing is everything. Change is a constant in accounting. We’re not living in Victorian times anymore. Find an easy way to present your metrics to them that is easy to understand at a glance. By taking some of these ideas into account and developing meaningful compliance and ethics KPI’s, my hope is our profession will not only survive but thrive in the long-run, and live up to its potential of helping corporations navigate in increasingly complex and hazardous regulatory environments. The lessons here include more than just having a strong policy and procedure management program, but also pairing it with an effective compliance training program that inculcates strong processes that can withstand pressure and not sacrifice core values. Your management team is already suffering from KPI overload. 20 Questions to Ask When Prioritizing Your Policy Development Efforts, 4 Steps for Risk-Based Back-to-Work Planning, From Compliance to Risk Management to Better Performance. ethical behavior in the workplace as a whole is hard to measure and an attempt to quantify it should go through the use of combined Key Performance Indicators (KPI). The time at which we ask employees to attest to a policy may determine if the standards in that policy are followed. Step-by-Step Guide: 8 Steps to an Effective Compliance Programme, Multidimensional metrics, for example, can enable an organization to better understand the root causes of issues related to retention, engagement, and attitude; the time needed to close audit issues and the number of repeat issues; and client satisfaction or complaints at the business unit level.Â. Jim spent the first 17 years of his career as a criminal and civil litigator and Senior Corporate Counsel before becoming Crompton Corporation’s first Vice President, Business Ethics and Compliance in 2003. This includes ensuring that they have a strong compliance culture embedded throughout the organization and that they are able to demonstrate to their boards and regulators that they understand and can manage their compliance risks. They typically also consider the Committee of Sponsoring Organizations’ (COSO) internal controls framework and guidance and measure their program against the seven topics set forth in the U.S. Federal Sentencing Guidelines. Being able to demonstrate proficiency after taking a course can be the key to providing employees with those training experiences that actually work as indicated by performance metrics. In addition, certain metrics gleaned from employee surveys, cultural assessments, or focus groups can demonstrate how the compliance program is deployed within an organization and highlight the soundness of its design and execution. While many compliance leaders are beginning to realize the value of their compliance investment through this focus on effectiveness, they often struggle with how to evaluate it. Be strategic. While there are no universally accepted definitions of what makes a compliance program effective, and there is no one metric for evaluating effectiveness, the pillars of an effective compliance program are sound design and execution, timely and proactive responses to compliance issues, and readiness for regulatory change. This slide contained the simple statement: “Measure or Die.” I noted at the time that this blunt pronouncement may seem a bit hyperbolic, but that it’s not far from the mark. FTSE firms have been panned for not reporting their ethical performance - but doing good is difficult to define. Thank you for subscribing! In recent updates to the indices, Johnson & Johnson and Vodafone were The whole idea of attempting to manage compliance and ethics risks by supplementing existing corporate structures already created for this purpose with a small group of compliance/ethics professionals is still relatively new. A couple weeks after the dust has settled in the arrest of the University of Utah nurse for upholding hospital policy, it’s time to investigate to see what ethics and compliance officers can learn. Nearly one-third of the nearly 200 companies surveyed do not measure the effectiveness of their compliance programs. User Feedback. In response, compliance leaders are increasingly pursuing multidimensional metrics that link operational performance with compliance as well as metrics that can provide a deeper understanding of the organization’s compliance effectiveness. Innovate Measure (and Reward) Ethical Behavior You measure employee performance and sales. Check your email for next steps. For example, the ethical behavior of … The ability to adapt and prepare for the future is an essential component of success. Determining which metrics your employees can affect also contributes to developing employee morale, loyalty and job satisfaction. To assess design and execution, many compliance leaders look at their key risk indicators (KRIs) year over year or at surveys of targeted employees. 6 Ways to Avoid Conflicts of Interest During the Holidays, Definitive Guide to Compliance Program Assessment, 8 Steps to an Effective Compliance Programme. Support Turnaround time. Originally appeared in KPMG’s “The Compliance Investment”. Set Goals and Evaluate Performance. Lots of it. Jim writes the monthly business ethics columns for the Association of Corporate Counsel Docket magazine and the Rochester Business Journal. To go from 98% to 99% compliance may require as much focus, discipline and energy as achieving the first 98%. Illustration – Integrated Compliance & Ethics Metrics. Managing employee compliance with policies and … Given staffing pressures and recent high attrition rates, embedding sustainable processes is increasing in importance. Each of us provided what we characterized as “rapid fire” 10- to 15-minute presentations providing our thoughts on how to best measure a company’s compliance and ethics performance. It has been updated for clarity.Â, A few years ago I had the pleasure of participating with Scott Mitchell, Chairman and CEO of the Open Compliance and Ethics Group, and Charles Ruthford, a compliance and ethics officer at Boeing Corporation, in conducting a training session at an Ethics and Compliance Officers Association Conference.The session was entitled: “Counting on Metrics: Developing meaningful E&C program data to satisfy a ‘Show me’ CEO.”. A business may think it has the best call center, but it won't know for sure until it measures and reports the proper KPIs and metrics. Transformation. Start by engaging key stakeholders, including internal stakeholders, on the value/why questions, what success will look like and what metrics will help you understand your progress towards success. Metrics to measure: Retain more clients, % realization per client, improvements in chargeable hours per client. Why do development teams use metrics to measure quality? Jim is a nationally recognized expert and thought leader in the field of business ethics and compliance with over a decade of experience serving multinational petrochemical, staffing, business process outsourcing, pharmaceutical and medical device corporations. Have a conversation with your management team to see what data they would find useful in allocating limited resources to better manage compliance and ethics risks. Efficient compliance can address an organization’s many regulatory mandates through a common set of controls that may require new automated, enterprise-wide controls to replace multiple or compensating controls within business units. What metrics do you use in your organization to measure the success of your compliance initiatives? Readiness for regulatory change requires organizations to both anticipate regulatory changes and respond quickly to comply. Operational metrics give an indication of the operational stability of an API platform. Rightly or wrongly,some would argue that a quantitative approach to measuring ethical behavior in a corporate entity is somehow alien to ethics and moral deliberation. Activation: what % have a “happy” initial experience? Jim is a National Association of Corporate Directors Fellow, a member of the International Association of Independent Corporate Monitors and serves on the Board of Directors of the Rochester Chapter of Conscious Capitalism as the Board’s Secretary and Chair of the Governance and Nomination Committee. Innovation metrics are techniques for measuring the innovation efforts of an organization. Today’s increasing emphasis on metrics in sustainability policy and management presents an interesting challenge for ethics. Compliance leaders across industries are focused on assessing and enhancing their compliance effectiveness in response to regulatory requirements and expectations. 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