Offer incentives and impose disciplinary measures

Your compliance program needs to be credible and effective to truly help you.

To be credible, your program must at a minimum show your business’ genuine commitment to obeying the law and competing fairly.

To be effective, your program must inform all your people, and those acting for your organization, that compliance is important. It must inform them of their legal duties and your internal compliance measures. It should also give you the tools to prevent and detect misconduct.

Your program should be reasonably designed, implemented and enforced in the circumstances. This means that it addresses your organization’s risks within your resources and in light of your business activities.

Small businesses can easily align incentives with a commitment to compliance and set out penalties for misconduct. Incentives don’t need to cost your organization a lot of money. Even small actions show your seriousness about compliance. For example, these can include recognition from the leader of the organization, or a note about the employee in your internal newsletter.

To convey a strong pro-compliance message, you can also consider more substantial recognition for employees who go above and beyond when it comes to your organization’s commitment to compliance.

Make sure that your overall incentive systems and staff promotions don’t undermine this commitment.

• Clearly spell out the incentives in your policy for encouraging compliance
• Be creative
  • Try different kinds of incentives, for example, appreciation letters, cash prizes, or promotions
  • Try targeting more than individuals with your incentives. For example, instead of giving incentives to an employee, reward every member of a team for achieving a goal, such as completing training
• Make compliance part of career advancement
  • Before giving promotions, review the person’s commitment to compliance leadership
  • Give your compliance officer a say in promotions and identification of high-performing and senior employees and managers
• Consider linking compliance leadership to performance evaluations, promotions and bonuses
  • Include compliance in your 360 degree reviews of your people. These are reviews that include colleagues of an individual who are above, below and at peer level
  • If you have a board-level compensation committee, have leadership in compliance and ethics as a factor in assessments of top executives

• Have a clear record of appropriate discipline for:
  • not following the compliance program
  • misconduct by anyone in your organization
  • managers failing to take reasonable steps to prevent or detect misconduct
  • not initiating appropriate disciplinary action
  • retaliation against whistleblowers
• Consequences could include suspension, holding back a promotion, demotion, dismissal or even legal action
• Before promoting someone, check with the compliance officer on pending investigations or violations, and the person’s commitment to compliance leadership
• Be consistent - consequences should apply to people at all levels, including
  • employees and managers who break the law
  • managers who ignore risky behaviour or potentially illegal activity or who see and fail to report them and
  • senior leaders