Ethics and compliance training in 2022: A Q&A with John Arendes

Over the past two years, workplace culture has been put to the test. How well did a company’s values and mission hold up in a remote or hybrid work environment/? Some organizations passed this test with flying colors, but others… not so much.

At the crux of the issue is the set of policies and procedures an employer has in place, as well as the training programs implemented to reinforce them. Companies that have built a strong foundation of ethics and compliance have been better positioned to not only survive but thrive as we grapple with the fallout of the pandemic.

John Arendes, CEO of Traliant, recently shared with BenefitsPRO his take on how well ethics and compliance programs, in particular, have weathered the pandemic storm, and what companies can do to rebuild or reinforce a strong foundation in 2022.

What have been some of the biggest ethics & compliance changes and challenges for organizations over the last few years?

Leaders have come to expect ever-changing compliance rules and regulations, however, COVID has accelerated change in ways no one could anticipate. The shift to remote work for many companies has added a layer of complexity that requires rethinking and revamping workplace policies, procedures, processes, and practices — as well as technologies and benefits — to the needs of a remote/hybrid workforce.

In the pandemic era, with more employees off-site, cyber security attacks and other compliance risks have increased and become more costly. A 2021 report by the Ponemon Institute and IBM Security found that the cost of a data breach rose to $4.24 million, the highest average cost in the report’s 17-year history. Additionally, stricter data privacy laws — such as the California Consumer Privacy Act and the UK’s General Data Protection Regulation — are adding more pressure on organizations to protect consumers’ information.

Digital harassment is another challenge that organizations need to take steps to prevent and ensure that employees understand that anti-discrimination and anti-harassment laws apply when they are working from home. On the benefits side, employees and candidates want flexible work arrangements and more family-friendly benefits that support working parents and caregivers, along with Employee Assistance Programs, resources for mental health and wellbeing and employee recognition programs. Fostering work-life balance is essential to the overall success of employees and the organization.

It all rolls up to workplace culture, which has become increasingly important to candidates and employees. People want to know what kind of company they are working for. What are its values and principles and are they expressed in specific, meaningful ways? We know that to thrive, employees want to feel a sense of belonging and inclusion.

What do you think will be the biggest issues in 2022 and beyond?

Besides those already mentioned, no surprise here, attracting and retaining talent will remain one of the biggest challenges in 2022. As leaders, we will need to be flexible, transparent and agile in how we approach these challenges and opportunities, whether it’s recruiting talent, developing products and services, preparing for new risks and regulations or inspiring and motivating employees so they and the organization can grow and thrive.

Where do you see compliance programs as a whole going forward?

Compliance reaches all areas, whether you work in HR/benefits, finance, IT, purchasing or sales and marketing, and all employees need to understand what to do (and what not to do) to recognize risks, prevent violations and protect the organization’s reputation.

In its latest guidance on evaluating corporate compliance programs, the US Department of Justice (DOJ) highlights some “fundamental questions” that organizations should be prepared to answer, such as: is your program adequately resourced and empowered to function effectively? Does the compliance program work in practice; and is the program well integrated into the company’s operations and workforce? These are just a few key components to look at when evaluating your organization’s compliance program.

Modern training experiences should be tailored to the organization. This includes clearly communicating behavior expectations and clarifying the relevant policies, laws and regulations so employees can make the right decisions and organizations can avoid violations, penalties, fines and reputational damage. And, importantly, training can help organizations create more respectful, welcoming, and inclusive workplaces.

How are companies winning when it comes to implementing a successful compliance program and creating a strong ethical culture?

With a strong tone from the top, effective compliance programs have clear policies, procedures and systems in place, as well as ongoing communication, training and education to ensure that employees understand how the principles of compliance apply to their everyday interactions and decisions.

It starts with an effective Code of Code (CoC) as the foundation. A CoC is not just for public companies – every organization needs one. In today’s business environment, employees of all sized companies and across industries need to understand what acceptable and unacceptable behavior is, and the organization’s position and policies on key workplace topics, such as harassment and cyber security, to name two. A strong CoC sets expectations for the organization and all employees, from CEO to programmer.

How should companies be evaluating programs for compliance training? Are you seeing companies take a more proactive approach to training?

More organizations are realizing that compliance training is not one-size-fits-all or a box that is checked off. They want training to be relevant to their employees and part of a multi-pronged approach to creating a culture of ethics and compliance. Training should reflect today’s evolving work environment and what it means to ‘do the right thing,’ regardless of whether employees are located onsite or in a remote/hybrid setting. Effective compliance training fosters a speak-up culture that encourages and makes it easy for employees to raise concerns and report misconduct.

When evaluating compliance training, here are four questions to ask:

1. Is the training relevant to your employees and managers? Can it be customized to your organization’s industry, culture, brand and internal policies and procedures?
2. Is the training up to date? Not only is it critical that training is current with your organization’s policies, practices and new laws and regulations, content needs to stay fresh so employees aren’t taking the same course year after year.
3. Is the training behavior-based? Rather than focus on avoiding liability, effective training should focus on changing behaviors, raising awareness of what is and isn’t appropriate workplace behavior and the consequences of misconduct.
4. Does the training keep learners engaged with relevant examples, interactive scenarios, and practical actions that they can put into practice immediately?

When evaluating compliance programs overall, again, organizations should refer to the key components of the DOJ’s guidance, such as:

• Have there been significant investments in, and improvements to, the corporate compliance program and internal controls systems?
• Have the remedial improvements to the compliance program been tested to demonstrate that they would prevent misconduct in the future?
• Have policies and procedures been integrated into the organization, including through periodic training?
• Are there reporting mechanisms in place for employees to anonymously or confidentially report allegations of a breach of the company’s code of conduct or other misconduct?

In 2022, we can expect employees to continue to look to leadership for clear guidance, reassurance, and support in a time of uncertainty. Creating a strong foundation of ethics and compliance can help build trust, encourage honest feedback, and empower employees to bring their whole selves to work and make the right decisions that reflect the organization’s values and culture.