The HR department plays a key role in compliance management. This article explains how HR professionals can rise to the challenge.
Values should be at the forefront of any company ethics and compliance programme. Values need to be established, communicated and most importantly demonstrated by those responsible for defining them. Values promote the behaviours expected of employees. The values and principles linked to them can also encompass how a company deals with mistakes, how it sanctions breaches of guidelines and how it promotes diversity. What type of culture are you developing? Can employees admit their own mistakes and learn from them? Is there a culture of mutual trust and do employees feel safe enough to openly call out misconduct or report violations? Only then do the right conditions exist for a successful ethics and compliance programme.
Practical examples demonstrate this well. Volkswagen, for example, identified its corporate culture as one of the causes of the diesel scandal. In an interview with the Süddeutsche Zeitung, the new Head of Compliance, Hiltrud Werner said there was: “(…) little job rotation and many careers only ever existed within one department. In addition, there was a hierarchical culture, a rigidity that allowed little personal responsibility and a lack of diversity and training measures for specialists and managers.”
Confidential reporting systems promote a speak-up culture
Whistleblowing systems that ensure confidentiality help employees to feel confident reporting misconduct and unethical behaviour and increase the likelihood that these violations will be addressed and resolved. Employees can discuss ethical dilemmas with HR or compliance via confidential and anonymous reporting channels.
The task of the HR department is not only to advocate for a reporting system, but above all to encourage employees to actually report violations. The system should be visible so that all employees can easily find it – for example, in a prominent place on the intranet or publicly accessible on the company website.
Limiting risk preventively
In addition to all the cultural aspects of compliance work, the HR department must also address risks within its own ranks:
- What happens if an HR colleague takes a bribe?
- How can HR processes be made fair and transparent?
- Do HR colleagues adhere to the Code of Conduct and demonstrate the company’s values?
The HR department not only needs answers to these questions but must also put processes in place which, in the best case scenario, prevent unethical behaviour from even occurring. At the same time they need to respond appropriately to compliance violations when these arise.
This article was written in cooperation with our partner VESTIGA Consulting.