The concept of a ‘culture of compliance’ has been present for many years now, yet numerous compliance and ethics scandals indicate its seeming absence in many organisations. Without a genuine commitment to compliance, policies and procedures remain mere documents, and such scandals will continue.

Recently, a noteworthy instance exhibited how a corrupt culture can permeate an entire organisation. Boeing’s colossal compliance failure in 2020 involved the flawed design and inadequate safety measures of its 737 Max aircraft, which led to two fatal crashes. It clearly raised very significant concerns about the company’s commitment to regulatory compliance.  Similarly, management-related issues, like Samsung’s recent legal troubles involving the indictment and conviction of its vice chairman, Jay Y. Lee, for bribery and embezzlement, cast a shadow over the company’s corporate governance and integrity.

These stories reveal corporate shortcomings in preventing, detecting and addressing non-compliant  behaviour at an institutional level. But they also debunk the oft-repeated assumption that these are isolated incidents caused by only a few bad actors. It is surely more vital today than at any time in the past for organisations to engage in persistent efforts to establish ethical workplaces which can yield positive outcomes. Former U.S. Department of Justice Compliance Counsel Hui Chen draws parallels between today’s focus on fostering ethical cultures and past movements for worker safety, which led to improved worker engagement and financial performance. Chen predicts that a culture of respect and dignity can achieve similar benefits for all workplaces.

To this end, businesses need to diligently cultivate a culture that promotes compliance at every level throughout the organisation. But how to do this?  There can be no one single model which matches the needs of each and every corporation or business, but it is certainly possible to build a foundation for a culture of compliance, by working through six important principles.

Principles for Success

Optimising a compliance culture in financial services extends beyond adhering to rules and regulations; it requires an organisational-wide ethos of responsibility, integrity and accountability. The principles laid out here promote an environment of transparency, proactivity and ethical conduct. However, it is essential to remember that there is no ‘one-size-fits-all’ approach. Organisations must continually adapt their compliance strategies to the evolving regulatory landscape, emerging risks and technological advancements. Moving forward, a dynamic, values-based and technology-driven compliance culture will undoubtedly be a critical determinant of success in the financial services sector.