Things That Make You Go “Hmmmm…..”: Making it Easy to Raise Compliance Concerns

Having a clear picture of when to raise a concern (and what) can help employees.  The best script on raising compliance questions may be: if it makes you go “hmmm…” you should probably ask!

Some companies operate in such complicated regulatory environments that employees can get confused about when and how to report compliance concerns.  Add to the mix that some situations could involve layers of regulation, like state employment law as well as financial compliance laws. And while we hate to be yet another voice talking about whistleblowers, its worth noting that some of the current political chaos involves whistleblowers. Whistleblowers, are, according to Collins Dictionary, telling the authorities or the public that the organization you are working for is doing something immoral or illegal. Raising compliance concerns, on the other hand, should involve any situation.  It could be as simple as realizing the new iPhone plan for employees might violate cyber security issues or as complex as realizing that a vacancy in the C-Suite could be cause for a compliance violation when a lack of supervision results from it.  Making it as easy as possible for employees to voice concerns can help create a compliance friendly environment.

Helping your employees understand how reporting fits into a compliance friendly environment can help them choose among forms and when to report. Some experts emphasize starting with an overall understanding of ethics, and then helping employees break that larger concept into elements.  Just as we discussed in writing about using scripts for handling ethical dilemmas, having a clear picture of when to raise a concern (and what) can help employees.  The best script on raising compliance questions may be: if it makes you go “hmmm…” you should probably ask!

While the Sarbanes Oxley Act (sometimes called SOX) has very specific rules on when to report accounting fraud and internal controls, other aspects of compliance in the financial industry can be less clear. However, a culture of reporting compliance concerns from employees to managers can be helpful. How so? By empowering employees to ask questions of their managers, you may find ways to prevent problems from occurring.

Whistleblowing information, as noted above, is quite different from raising a question about how a compliance policy is implemented. Take this definition of the information the SEC seeks from a recent ruling: “Under the whistleblower rules … an individual’s original information leads to the success of an action where it causes staff to (i) commence an examination, (ii) open or reopen an investigation, or (iii) inquire into different conduct as part of a current Commission examination or investigation under Rule 21F-4(c)(1) of the Exchange Act; or alternatively, where in the context of an existing investigation, the individual’s original information significantly contributes to the success of a Commission judicial or administrative enforcement action under Rule 21F-4(c)(2) of the Exchange Act.” Release No. 86902 / September 9, 2019 WHISTLEBLOWER AWARD PROCEEDING File No. 2019-10.

It’s also worth noting that, according to the Office of Management and Budget, the “Employee Benefits Security Administration (EBSA) is amending and restating its Voluntary Fiduciary Correction Program (VFCP) … to encourage the voluntary correction of fiduciary violations by permitting persons to avoid potential civil actions and civil penalties if they take steps to correct identified violations in a manner consistent with the VFCP. The amendments will expand the scope of some transactions currently eligible for correction and streamline correction procedures for certain others. EBSA will issue a restatement of the VFCP in its entirety and request public comments.” Keeping an eye on this rule, as it develops could be helpful.

Some experts suggestion that that having a variety of ways for an employee to report an incident – beyond a hotline – can increase incident reports (and therefore drive better reporting and risk management analysis.).  This might include discussing the issue with a supervisor or an ombudsman. It’s also critical to make sure that all levels of management understand the importance of raising concerns and questions.

Another step to having employees recognize when (and what) to raise questions about is to have an effective feedback loop. Having a process that keeps the reporting employee informed about how the question they raised is being resolved and how the compliance or HR department may be updating training or changing the work environment can help employees to keep reporting and understand what details to share.

Back to Blog

Latest Entries

Need a Proposal?

Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering.  Through this examination, we can help you optimize the service you receive.

get xpress proposal