Compliance tips for effectively presenting data to key stakeholders

At the IFCA’s 2021 International Compliance Congress earlier this month, Jennifer Lee, a risk and compliance manager at construction machinery and equipment company Caterpillar, shared helpful tips on how CCOs (and CECOs) can drive collaboration with metrics and present it to internal stakeholders in a way that helps create an overall lean and tailored compliance program.

“An effective and sustainable compliance program should identify or create metrics that add value back to the organization,” Lee said. “This means being aligned on strategies and priorities, eliminating duplicative processes, and streamlining any disjointed process.”

Metrics can either strengthen or distract from compliance’s message to key stakeholders. “So, it’s imperative to understand the business and stakeholder interests prior to going to them with any data from an ethics and compliance perspective,” Lee added.

For CCOs to successfully narrate to internal stakeholders how to effectively leverage data, Lee said it’s crucial they implement and execute the following three main building blocks:

• Metrics: Looking at data points and reports.
• Data analytics: Looking at trends, interpretations of the data, and storytelling to provide that narrative.
• Data visualization: Illustrating information through dashboards, scorecards, pie charts, bar graphs, line graphs, etc.

“Metrics and data analytics can do more than showcase performance,” Lee said. “They also help sustain and drive the compliance program.”

Using a conflicts of interest program as an example, consider the following non-exhaustive list of key internal stakeholders, the different ways they approach data, and how compliance can provide each with its own unique narrative.

Human resources: At many companies, gaps in communication and collaboration between compliance and HR persist, which can create duplicative and siloed processes. But if there is one thing HR excels at, it’s people. The department has its finger on the pulse of employee culture and often is the first function to sense when a problem arises, which is usually a sign of wider compliance-related issues.

“An effective and sustainable compliance program should identify or create metrics that add value back to the organization. This means being aligned on strategies and priorities, eliminating duplicative processes, and streamlining any disjointed process.”

Jennifer Lee, Risk and Compliance Manager, Caterpillar

Depending on what data compliance and HR share, HR can help to mitigate perceived, potential, or actual conflicts of interest—for example, providing compliance with any relevant disclosure documents made by new employees during the hiring process or having a centralized system where employees can report conflicts of interest.

Internal audit: Continuing with conflicts of interest, there might be outside activities that present a high risk to the company. Compliance can help inform internal audit by suggesting potential divisions to monitor or categories to audit—for example, situations in which outside activities stand out from personal relationships or financials.

Senior leadership: “The data the ethics and compliance team provides to senior leadership can ensure managers have the right tools and resources in place,” Lee said. Thus, ethics and compliance should ask senior leadership, “‘What data do you need from us so that you know how to drive priorities, strategies, and resources across the organization?’”

Presenting dashboards or comparing trends over time to ensure continuous improvement of the program also helps. Lee used the example, “‘In 2020, for business unit X, we dipped down in training completion. What happened there?’”

At the end of the day, data does not hold much value unless each function has the right data to execute on their role in creating and maintaining a culture of compliance. Metrics, data analytics, and data visualization help build the foundation of the narrative that needs to be told.

Concluded Lee, as compliance officers, “We want to move from pulling data from stakeholders to influencing strategies and priorities with stakeholders using data. We want to go from passive stakeholder participation to proactive stakeholder participation. We want to go from observers of the compliance process or processes to having those stakeholders be part of the compliance improvement process—to provide feedback and say, ‘This is what we ask of the ethics and compliance program.’”