Effective Compliance Depends on Front-Line Managers

Following this year's Super Bowl, CBS aired a new reality program called "Undercover Boss." The show focuses on company executives secretly going "undercover" to take on various entry-level jobs at their companies. As you would expect, the entertainment value comes mainly from the executives' surprise and realization that what actually happens on the factory floor can be worlds apart from policy decisions made in the boardroom.

The show exposes a reality already familiar to in-house attorneys and compliance personnel: No matter how strong the compliance policies, their ultimate effectiveness depends on front-line managers to apply and enforce them.

Kaplan Higher Education is geographically dispersed. Consequently, we rely on local managers to ensure that corporate policies are well understood and adhered to by all employees. We're very aware that this 'hub-and-spoke' system can break down easily; therefore, we take steps to make certain that managers everywhere embrace and effectively implement our compliance policies. Some of these steps include:

  • Creating a Culture of Compliance. The importance of the "tone at the top" can't be overstated when it comes to corporate compliance. Kaplan executives and senior managers make a point of repeatedly emphasizing that we must hold ourselves to the highest ethical standards and comply with all applicable laws, regulations, rules and policies. This mantra reinforces the importance of compliance throughout the organization. However, words alone are not enough. Senior managers and above must demonstrate the proper ethical tone by fully engaging in the compliance program and staying apprised of any potential compliance issues.
  • "Operationalizing" Compliance. Compliance programs and policy implementation cannot be solely top-down exercises. "Operationalizing" compliance means seeking initial buy-in from business managers on new policies and procedures. At Kaplan, we develop policies in collaboration with the teams that are responsible for their implementation. Giving early and significant voice to the managers in this process ensures that the personnel charged with implementing those policies have a true ownership stake in the results.
  • Demanding Accountability. Compli-ance is reinforced when managers are held accountable for their teams' compliance record. However, compliance programs need to balance this need for accountability with the possibility that too heavy a hand may encourage managers to bury or "fix" issues without properly reporting them. Kaplan addresses this balance by giving all employees the tools to immediately report any potential violation (see "InsidePerspectives," August 2008).
  • Educating and Reinforcing. Ensuring that policies are well understood is the most effective route to successful implementation. Kaplan employs a combination of new-hire training, in-person training for managers and their direct reports, and web-based reinforcement training. We also provide managers and their employees with easy to follow "Codes of Conduct" in some of the more critical compliance areas.

While a robust compliance program may start at the top, it is ultimately implemented at the bottom. Enabling local managers to take ownership of their teams' compliance helps ensure that policies are correctly applied throughout your organization. And, best of all, you won't have to put on a disguise and take an entry-level job to find out what is really happening in your company.

Janice Block

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