Compliance is Every Employee’s Responsibility. So How Do They Prepare?
Ethics and Compliance is everybody’s business and it’s a priority more so now than ever!
– Wells Fargo and Facebook, two glaring examples of recent failure.
When New York Times interviewed A. J. Bula, a former branch employee in Richmond, Va., he said his managers had criticized him when he failed to generate enough customer referrals to the sales team. The sales-oriented culture “was still there,” said Mr. Bula, who left Wells Fargo in July of last year. “Just get someone something,” was the cry from managers. This was 2 years after the 2016 scandal were millions of customers were duped by false sales practices of Wells Fargo employees to meet their monthly targets.
What is to blame here? The answer to the question is not as straight forward as it seems. Of course, the company policies lacked the appropriate checks and balances to prevent such malpractices from happening and also the upper management creating a pressure situation for the entire organization to meet sales target or leave. It also brings out a very important concern that not all employees in the organization share the understanding of Ethics and Compliance as part of a larger banking community. Sales representatives in their quest to meet monthly targets never gave second thought to the larger compliance paradigm for the banking community as a whole. It was evident that none of the sales people sought help from outside experts to understand if there was any larger compliance violation in play or if their role is facilitating such activities. Needless to say, there was no effort from the management to facilitate continuous training of all employees on latest regulations and ensuring a shared responsibility for ethics and compliance. Had this been the case, there was a remote chance that employees would have taken a pause before they succumbed to the pressure of meeting sales targets by any means necessary.
Another clear example of a similar Ethics and Compliance failure at an organization level starting top down is Facebook. One of the most debated and televised events in past few years was the entire saga of data sharing of 87 million users by Facebook with Cambridge Analytica before the presidential elections. Even before this breach, Facebook had a history of collecting data using research apps by going around Apple app store, which restricted apps to collect user data, which was not essential to the functioning of the app. They key question here is the greater shared responsibility of each individual member of the organization including research assistants working on developing such apps.
In light of such events it is extremely important for all individuals to take a collective responsibility of Compliance. It should be non-negotiable for companies to set up a more inclusive ethics and compliance program internally and provide unlimited access to every employee for proper training and understanding of compliance regulations governing their industry. Setting up regular knowledge sharing sessions with industry experts to keep all stakeholders updated of the latest regulations and bridge any gap in their understanding would go a long way in ensuring a more compliant industry and avoid similar disasters in future. With the advancement in technology, it is imperative for companies to build a culture of compliance on highest priority.