2. Sound design and execution is the foundation of effective compliance. Jim is a National Association of Corporate Directors Fellow, a member of the International Association of Independent Corporate Monitors and serves on the Board of Directors of the Rochester Chapter of Conscious Capitalism as the Board’s Secretary and Chair of the Governance and Nomination Committee. Employees with strong integrity recognize the importance of completing daily tasks and producing their best work, while those with poor integrity might try to skate by doing the bare minimum. While there is room for improvement, it is heartening that ethics and compliance programs are moving beyond the check-the-box approach to a broader systems approach. Try for free . This slide contained the simple statement: “Measure or Die.” I noted at the time that this blunt pronouncement may seem a bit hyperbolic, but that it’s not far from the mark. There are over 250 global and local ethical indices schemes, with FTSE4Good and the Dow Jones Sustainability Index (DJSI) two most well known ethical investment indices for UK companies. What metrics do you use in your organization to measure the success of your compliance initiatives? The golf course could measure the actual reduction in water usage. Jim writes the monthly business ethics columns for the Association of Corporate Counsel Docket magazine and the Rochester Business Journal. - Using Metrics to Measure Compliance Performance was written by CCI featured author Jim Nortz, the Compliance Director at Bausch & Lomb. The most basic set of API metrics is operational. In addition, compliance leaders in organizations with more mature programs are also attentive to the need to improve the sustainability and efficiency of their programs. 3. VComply’s dashboard provides relevant insights of the level of compliance. Using technology is one way to measure the impact of a learning experience. Additionally, sustainable compliance requires compliance leaders to demonstrate effectiveness throughout the supervisory cycle as well as repeatable processes for an external consultant or audit assessment. Managing employee compliance with policies and … Today’s increasing emphasis on metrics in sustainability policy and management presents an interesting challenge for ethics. The lessons here include more than just having a strong policy and procedure management program, but also pairing it with an effective compliance training program that inculcates strong processes that can withstand pressure and not sacrifice core values. 20 Questions to Ask When Prioritizing Your Policy Development Efforts, 4 Steps for Risk-Based Back-to-Work Planning, From Compliance to Risk Management to Better Performance. In addition, changing culture in organizations is very difficult and almost always takes years to achieve, even in the best of circumstances, and significant, sustained effort to maintain. Nearly one-third of the nearly 200 companies surveyed do not measure the effectiveness of their compliance programs. Revenue: can you … . Since then, Jim has served as a compliance officer at Crompton and for five other multinational corporations, the most recent of which was as Chief Compliance Officer at Carestream Health. Regulators in certain industries have developed industry-specific guidance. Be strategic. Jim is a nationally recognized expert and thought leader in the field of business ethics and compliance with over a decade of experience serving multinational petrochemical, staffing, business process outsourcing, pharmaceutical and medical device corporations. However, these may not be the most useful metrics given an organization’s risks and strategic goals. Furthermore, compliance leaders recognize the limits of one-dimensional statistics, such as feedback from customers and regulators or decreasing fines. Thank you for subscribing! Have a conversation with your management team to see what data they would find useful in allocating limited resources to better manage compliance and ethics risks. Such metrics, though, favour short-term wins, shareholder demands and performance bonuses, rather than longer-term growth. How do you measure ethics in business? Metrics to measure: Retain more clients, % realization per client, improvements in chargeable hours per client. A metric is a specific measurement or calculation associated with performance. They typically also consider the Committee of Sponsoring Organizations’ (COSO) internal controls framework and guidance and measure their program against the seven topics set forth in the U.S. Federal Sentencing Guidelines. However, I think it is fair to say that those ethics and compliance offices that have successfully found a way to demonstrate their worth are likely to weather the current economic storm better than those who are merely reporting ethics line call volumes and training completion rates to their management teams. Net Promoter Score (NPS) 27. When ethics are discussed, probably one of the last things to come to mind is measuring them, particularly in numeric terms. HOW DO YOU MEASURE EFFECTIVENESS? A combination of those hard metrics and soft ones would likely provide the best overall measure of a program's success. Although our fellow conferees had many other sessions that they could attend, by the time we started every seat was taken and there were people standing along the walls and a couple of ranks deep in the back of the room, with some listening from the open doorway. Examples of such forward-looking metrics might include a “click rate” that measures the number of employees who have read a particular policy, or tracking minor employee misconduct as an indicator of potentially more serious future misconduct. This can be especially important for decentralized organizations and organizations that operate under multiple regulatory jurisdictions and face growing challenges in tracking and managing regulatory changes. To assess design and execution, many compliance leaders look at their key risk indicators (KRIs) year over year or at surveys of targeted employees. In the event you don’t already have a robust and meaningful set of compliance and ethics key performance indicators (“KPI’s”) at your company, here are a couple of things you might consider doing to remedy the situation: Just because you’ve got all of the elements of the US Organizational Sentencing Guidelines’ seven elements of and effective compliance and ethics program and have done thousands of hours of compliance training does not mean you’ve succeeded in improving your firm’s compliance and ethics performance. Of course, no function in a company is immune from budget cuts and this is doubly true of those that are not directly related to income generation. During your employee’s performance review, ask him to demonstrate how he completes job tasks in an efficient and cost-effective manner, and how this helps your company achieve its competitive edge. METRICS TO GATHER HOW TO SET COMPLIANCE KPIS TS WHAT TO MEASURE? As we reviewed everyone’s key benchmarks, one question guided the discussion: Editor’s note: This article was contributed to Corporate Compliance Insights by Jim Nortz. Referral: do they like it enough to tell their friends? There can be other metrics which are relevant to your line of business which should be tracked along with the metrics mentioned above. Jim spent the first 17 years of his career as a criminal and civil litigator and Senior Corporate Counsel before becoming Crompton Corporation’s first Vice President, Business Ethics and Compliance in 2003. 26. 30. A couple weeks after the dust has settled in the arrest of the University of Utah nurse for upholding hospital policy, it’s time to investigate to see what ethics and compliance officers can learn. Activation: what % have a “happy” initial experience? Share your thoughts in the comments section! To go from 98% to 99% compliance may require as much focus, discipline and energy as achieving the first 98%. How to Measure Work Ethics & Integrity. What metrics do you wish your organization had in place for such measurement. Support Turnaround time. App Store Ratings. In addition, organizations should have processes for receiving and resolving broader issues, including consumer complaints. In a business setting, an employee's integrity can affect her work ethic. Karola Karlson. These metrics also provide insights into compliance effectiveness. Which business metrics do you measure and what are the best tools for doing it? Business metrics. It has been updated for clarity.Â, A few years ago I had the pleasure of participating with Scott Mitchell, Chairman and CEO of the Open Compliance and Ethics Group, and Charles Ruthford, a compliance and ethics officer at Boeing Corporation, in conducting a training session at an Ethics and Compliance Officers Association Conference.The session was entitled: “Counting on Metrics: Developing meaningful E&C program data to satisfy a ‘Show me’ CEO.”. 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