Are compliance teams a necessary evil or effective facilitators of business success? At the CEE Legal Matters GC Summit held in Istanbul, legal experts from across Europe discussed how to best foster a culture of compliance and ethics in order to benefit businesses, as well as why multidisciplinary knowledge and an agile approach are crucial for compliance teams.
Setting Up an Agile Compliance Structure
“While compliance teams can often be viewed as a necessary evil for businesses, hindering innovation and creating unnecessary bureaucracy, they are, in fact, facilitators of business success,” posited TurkNet’s Merve Oney Barlas during her talk at the Summit. “However, in order to truly embody this, it is crucial for compliance professionals to possess multidisciplinary knowledge and to have an agile approach in their work, in order to add value to the company’s business.”
As Barlas put it, the traditional approach to compliance teams involves “hiring external consultants or creating a separate department, with limited interaction with other departments in the organization. This approach is not only inefficient but also creates a negative image of the compliance team within the company,” she said. “Compliance teams should be seen as business partners rather than consultants or authorities in a company, with a focus on adding value to the entire organization. The best way to achieve this is to apply an agile approach to their work.”
According to Barlas, “one of the key elements of an agile compliance team is the multidisciplinary knowledge of its members. The team should have a thorough understanding of the impact of compliance on the financials, industry, advertising, customer journey, and value creation of the company,” she said. “This will enable the team to collaborate more effectively with other departments and identify potential compliance issues at an early stage.”
Moreover, Barlas stressed that agility is essential for compliance teams to “keep the pace with the rapidly changing regulatory landscapes. An agile approach involves breaking down the compliance process into smaller, manageable tasks, and adopting a continuous improvement approach. This enables the team to respond quickly to changes in regulations and reduce the cost of compliance.”
Finally, Barlas provided the GC Summit attendees with a list of recommendations on how best to improve their compliance efforts by utilizing agile methods. “An approach of using checklists, joint working models, and agile compliance handbooks with frequently asked questions to structure the compliance process correctly will ensure that compliance requirements are met consistently, and the team can focus on value creation.” She recommended, in conclusion, that compliance teams “strongly consider the use of automation tools that can streamline the compliance process and reduce the risk of errors.”
Building a Culture of Compliance
As much as it is important to craft an agile framework for ensuring compliance, it is crucial to consider the long-term benefits of having a strong compliance culture. A panel of experts including Profi Rom Food’s Mihaela Racles, Yemeksepeti’s Duygu Tanit, Pearson’s Dinc Sanver, L’Oreal’s Hande Karakulah, and Unilever’s Olgu Kama shared best practices for fostering a culture of compliance across the company’s operations.
“In today’s business world, the importance of compliance cannot be overstated,” Tanit said. “With increasing regulations and expectations from customers, investors, and governments, companies must take proactive measures to ensure that they are compliant with all relevant laws and regulations.” While this perception is an industry-accepted axiom, however, there are still companies out there that have only recently started implementing compliance programs.
The panelists emphasized the importance of reputation and trust, noting that non-compliance can have significant financial costs and can cause damage to a company’s reputation, further indicating that it is highly advisable for businesses to have robust programs in place from the very start. “The United States Department of Justice issued hugely informative and useful guidelines on this front,” the panelists mentioned. “The Department of Justice has had dedicated compliance officers and policies and processes in place for a long time, and following their thought leadership is a prudent call.”
Furthermore, all panelists agreed and stressed the importance of setting the tone, from the top and the middle of the company, in promoting a culture of compliance. They noted that compliance is not just a set of rules, but a culture and a process that involves everyone in the company. “Regular training and communication are key components of a successful compliance program,” Sanver added.
The discussion then shifted to ethics and integrity in the compliance profession, with Karakulah disagreeing with Steve Jobs’ statement that “integrity is either present or not” – “I firmly believe that integrity can be developed and strengthened over time.” The panel discussed how compliance is not just about following rules, but about “promoting a culture of ethics and integrity throughout the company – where employees should be included in the compliance process at all stages.”
Finally, the panelists emphasized the importance of sourcing, respecting the environment, and not paying bribes as part of an ethical company. “It is up to individuals, ultimately, to look for ethical companies to work for,” Kama said. “Working in an ethical company means doing the right thing, not just in terms of individual conduct, but also in terms of that company’s impact on the environment and society.”
Racles concluded by saying that “the purpose of compliance professionals, lawyers, and individuals in general, should be to nurture and promote integrity and ethics. Compliance is not just about following rules, but about building a culture of ethics and integrity that permeates the entire business. With the right elements in place, including adequate resources, policies and processes, regular training and communication, and a focus on ethics and integrity, companies can build effective compliance programs that promote trust and reputation, protecting both the company and its stakeholders.”