How can an organization’s board of directors incorporate the compliance function into a long-term business strategy? It can commit to doing business ethically and in compliance with anti-corruption laws and engage actively with the CCO and compliance function.
The first point is to develop a framework for incorporating compliance into long-term strategy. Setting up the framework for evaluation of the compliance function starts with answering these three questions:
Has the company identified the compliance issues relevant to the board?
Has the company assessed and incorporated those compliance issues into its long-term strategy?
Has the company communicated its approach to compliance and the influence of those factors on its overall strategy?
From this initial inquiry, a compliance officer can move into some specific questions that the board can use to determine the overall state of the company’s compliance program.
To answer the first question, a board can identify compliance issues material to the organization. This can be accomplished with compliance-related KPIs, which a board should then prioritize to elevate its impact on compliance. A board should consider these through the lifecycle of a business line or geographic sales area.
On Question No 2, the board should move compliance into both the long-term strategy for the company and have the CCO detail the long-term strategy for the compliance function.
As it relates to the final question, the board of directors should communicate the influence of compliance factors on overall corporate strategy by demonstrating how compliance is integrated into the business. Not only is this good from a business and shareholder perspective, it also meets the government’s expectation of the operationalization of compliance.