Ethics-driven regulations. Why compliance is good for business
Regulations that have a strong ethics component have come under increased scrutiny. FCPA for anti-bribery, Dodd-Frank law Section 1502 requiring supply chain transparency for the minerals trade, and the Federal Acquisition Regulation related to human trafficking — all have come under fire for everything from being too onerous to being unnecessary.
Ethics-based compliance has become imperative to businesses as consumers now look to brands who are ethically aligned with their own views and values. Unethical operations or noncompliance can give an organization a black eye in the industry and cause both customers and investors to flee.
Compliance can also be good for business. A sterling ethics record impresses employees and stakeholders. It tells the world that principles are just as important as profits.
The real issue: the high cost of compliance
As many organizations know, it takes people, resources, specialized skill sets, and more to comply with any regulation. By trimming an ethics-based regulation or eliminating it altogether, the naysayer’s view is business would be more competitive. Compliance wouldn’t be the drag that it is on operations.
What’s not being discussed are the ramifications of dramatically weakening or removing a regulation with ethics at its core. Would businesses operate ethically on their own? Would the problem that prompted the regulation return? Is it possible that new actors would enter the arena and cut corners with their disregard for ethics? These questions lack easy answers, but they warrant a discussion or debate.
What if there were a way to conduct compliance more efficiently and with greater productivity, while reducing that high compliance cost?
Using technology for compliance, ethics, and culture
Imagine a world where a company’s compliance department leverages technology and automates many compliance tasks. With a lighter schedule, compliance professionals could turn their attention to advocating the company’s ethics, culture, and values.
Bill Coffin, Editor in Chief, at Compliance Week expressed this very sentiment in his weekly blog:
“Ethics and compliance is increasingly converging as a professional discipline. As the transactional side of compliance can be automated, the future for compliance officers is in the ethics space, where they can work at a higher level to drive a better, stronger organizational culture.”
A GRC platform designed to integrate risk management and compliance programs can streamline regulatory compliance, as well as help implement a company’s ethics policy. An ethics-focused regulation that strikes many as onerous or unnecessary is a lot less work when using a GRC platform to assist compliance activities.
While many regulations are receiving increased scrutiny, let’s be sure to view regulations through the lens of ethics. You may well discover what we see — compliance is good for business, and doesn’t have to be as costly and challenging as it appears.