If your business is a retailer or perhaps a maker of food or beverages, it is highly unlikely that a consumer will buy your products because of your business’s strong ethical reputation or corporate integrity. It is possible that there are some corporate social responsibility (CSR) initiatives that your company has that may sway a potential consumer; however, this is still fairly unlikely. Although ethics and integrity can be broadly wrapped up in a CSR label, it is things such as green initiatives and impressive human relations that are more likely to sway a consumer than a company saying it does not pay bribes in emerging markets.
If your business is more of a business-to-business (or “B2B”) enterprise and you are selling to corporate customers (particularly large ones) or governments that are intent on operating transparently, there is much more scope to use your great compliance programme to your advantage. In many cases your customers are looking for a safe option – they want to engage a company that has strong ethics and will not offer kickbacks, cut corners or damage their reputation in any way. These days, because the penalties for practising unethical behaviour are increasing, there is more pressure on companies to work with suppliers that have strong integrity programmes.
To get the most out of your compliance programme you need to sell it to your customers – use it to your advantage to win deals, engage customers and show potential customers that you are a safe option.
Imagine that your company is bidding on a project to construct a building in a new market. Paying your workers correctly, providing them with satisfactory living conditions, not restricting their movements and having a strong safety record will clearly work in your favour. Similarly, imagine that you are a medical-products distributor and you want to win the rights to distribute a pharmaceutical or healthcare product. Again, the fact that you have a compliance programme is essential to the decision of the large pharmaceutical company to select your company to distribute its products. The days of simply looking at your ability to do the work for a reasonable cost are over – the company now looks at the softer, more reputation-driven actions, such as CSR or integrity.
If you want your compliance programme to be part of your arsenal to woo a new customer or key partner, there are some key things that you must do.
Do not advertise your programme until it is actually sellable
If you only have a “good” compliance programme, don’t try and advertise it – wait until you have a great programme. If your programme is a self-declared “good compliance programme” and you cannot justify what is “good” about it then you should not be trying to sell it. Only once you have a great programme – and you have strong evidence to support this – can you start to sell it. Having a great programme means going beyond a “tick-the-box” approach to implementing and managing a compliance programme. You need to be able to demonstrate that compliance is ingrained in your company’s culture, and that behavioural patterns of employees are in alignment with stated goals and directives from senior management. Tone from the top is a must have when it comes to communicating a compliance programme. Having that tone permeate throughout the organisation is indicative of a best-in-class compliance programme and is a key selling point.
It’s all about the metrics
If you are going to talk about the programme, then you need to talk about metrics. You therefore need to have very clear metrics about how your compliance programme adds value and how it will protect against the risks of the company and the risks of the customers. If you don’t have these metrics, then you cannot say how great your compliance programme is.
Don’t send verbose explanations of your policies and procedures – nobody wants to hear about them. Potential customers and partners want to see that you know what drives your great compliance programme and that you have the mechanisms in place to manage and measure it. You need to be able to explain the programme in easy-to-understand, intelligent and valuable metrics. There is no value in telling people that you have trained everyone on your code of conduct unless you can support this with metrics that your prospective customers can relate to.
Clearly communicate your programme
You need your business development teams to articulate your compliance programme in a simple and easy way – preferably a professional set of slides or a small brochure that you can show prospective customers. These need to be carefully prepared to communicate the valuable message while protecting the confidentiality and privilege of the underlying subject matter.
Be ready to prove it
You can talk about how great your compliance programme is, but you need to be ready to prove it. It is possible that a prospective customer will call your bluff and they may ask not only to see your compliance programme but also to audit it or conduct some form of assessment themselves. If you want to be transparent then you must be ready for people to look into your business.
Speaking at conferences is not enough
There is a general perception that only those companies with great compliance programmes speak about ethics and compliance at conferences; however, most people who speak at conferences do so because they are in the midst of an investigation and are trying to show how they have moved forward. Some speakers are simply trying to push their own career paths and build their brand. There is no correlation between speaking at an event about how great a compliance programme is and the quality of the programme itself. It is the very smart companies that refuse to speak at conferences and therefore don’t become “poster children” for companies that have had a compliance failure and then “seen the light”.
Audit yourself and make the results publicly available
One way to manage transparency is to audit yourself and make the results publicly available. In a litigation sense, this is akin to “getting on the front foot”. Rather than be the subject of a customer audit, audit yourself. That way, you drive the process, determining the scope and depth of the audit as well as controlling what is published in a report. The audit or review will need to be broad and deep enough and, more particularly, not give you a perfect result. People will see that report for what it is. If you take the process too far and it is obviously one-sided, it will backfire.
Make your programme public
Ensure that you have made as much of your compliance programme public as possible. This would extend far beyond just a listing of the code of conduct and major policies – it should include compliance objectives, key metrics, training information, policies, procedures, internal controls and any (albeit somewhat redacted) results of investigations and audits. You should consider everything that you produce and challenge why each item should not be made public.
Write a biannual or annual compliance report
Similar to making your programme public, create a public compliance report once or twice a year. Many companies produce a CSR report or some report that relates to their environmental efforts or green-energy efforts, yet when it comes to integrity and values no such report is given beyond a few paragraphs in a CSR report. If you want to drive home the message of your great compliance programme, prepare an open report about it.
Make your CCO available at all times for sales calls
Your general counsel or chief compliance officer can be a great support for a sales team that is engaging an inquisitive new customer. Use them to meet the customer’s equivalent position and help them understand the value of the compliance function from the person or group that manages it.