These metrics also provide insights into compliance effectiveness. Net Promoter Score (NPS) 27. You can measure yourself to death. Efficient compliance can address an organization’s many regulatory mandates through a common set of controls that may require new automated, enterprise-wide controls to replace multiple or compensating controls within business units. Jim is a National Association of Corporate Directors Fellow, a member of the International Association of Independent Corporate Monitors and serves on the Board of Directors of the Rochester Chapter of Conscious Capitalism as the Board’s Secretary and Chair of the Governance and Nomination Committee. However, I think it is fair to say that those ethics and compliance offices that have successfully found a way to demonstrate their worth are likely to weather the current economic storm better than those who are merely reporting ethics line call volumes and training completion rates to their management teams. The most basic set of API metrics is operational. Further, leaders are seeking data and analytics and other forward-looking predictive measures, as well as utilizing behavioral science indicia, to assess compliance trends and to enhance their understanding of emerging risks and potential misconduct. Each of us provided what we characterized as “rapid fire” 10- to 15-minute presentations providing our thoughts on how to best measure a company’s compliance and ethics performance. In addition to effectiveness, organizations with more mature compliance efforts often find that the next step in their compliance journey—and a key to realizing a return on their investment—is making compliance more efficient and sustainable. Although I’d like to think otherwise, the reason such a crowd gathered was not because of our collective star power; it was because there is a widespread recognition by compliance and ethics officers that measuring compliance and ethics performance at our firms is vital to our success as a profession. Research has found that culture, leadership, and values-based ethics and compliance programs increase employee reporting of misconduct and decrease retaliation. In addition, certain metrics gleaned from employee surveys, cultural assessments, or focus groups can demonstrate how the compliance program is deployed within an organization and highlight the soundness of its design and execution. Step-by-Step Guide: 8 Steps to an Effective Compliance Programme, Multidimensional metrics, for example, can enable an organization to better understand the root causes of issues related to retention, engagement, and attitude; the time needed to close audit issues and the number of repeat issues; and client satisfaction or complaints at the business unit level.Â. I attempted to reflect this sentiment in the last slide in my presentation. Step-by-Step Guide: 8 Steps to an Effective Compliance Programme. Operational metrics give an indication of the operational stability of an API platform. - Using Metrics to Measure Compliance Performance was written by CCI featured author Jim Nortz, the Compliance Director at Bausch & Lomb. 6 Ways to Avoid Conflicts of Interest During the Holidays, Definitive Guide to Compliance Program Assessment, 8 Steps to an Effective Compliance Programme. Jim is a nationally recognized expert and thought leader in the field of business ethics and compliance with over a decade of experience serving multinational petrochemical, staffing, business process outsourcing, pharmaceutical and medical device corporations. But how, exactly, does one define an ethical business practice and, more to the point, how does one measure ethical behavior? App Store User Reviews. LMS Metrics to Measure Training Effectiveness. Additionally, sustainable compliance requires compliance leaders to demonstrate effectiveness throughout the supervisory cycle as well as repeatable processes for an external consultant or audit assessment. Productivity depends on the time you spend on tasks and other in-house activities. To assess design and execution, many compliance leaders look at their key risk indicators (KRIs) year over year or at surveys of targeted employees. The lessons here include more than just having a strong policy and procedure management program, but also pairing it with an effective compliance training program that inculcates strong processes that can withstand pressure and not sacrifice core values. This can be especially important for decentralized organizations and organizations that operate under multiple regulatory jurisdictions and face growing challenges in tracking and managing regulatory changes. Chat with a solutions expert to learn how you can take your compliance program to the next level of maturity. “Measuring compliance and ethics performance at our firms is vital to our success as a profession.”. To track and increase productivity managers use metrics identifying and prioritizing emerging issues. Traditional metrics, such as net present value and internal rate of return, help finance to communicate with stakeholders. As we reviewed everyone’s key benchmarks, one question guided the discussion: Many rely on internal metrics for insight into the effectiveness of their programs, including year-over-year improvement and how well they are filling self-identified compliance gaps and inefficiencies, as well as through an external analysis against peers. However, these may not be the most useful metrics given an organization’s risks and strategic goals. It has been updated for clarity.Â, A few years ago I had the pleasure of participating with Scott Mitchell, Chairman and CEO of the Open Compliance and Ethics Group, and Charles Ruthford, a compliance and ethics officer at Boeing Corporation, in conducting a training session at an Ethics and Compliance Officers Association Conference.The session was entitled: “Counting on Metrics: Developing meaningful E&C program data to satisfy a ‘Show me’ CEO.”. Given staffing pressures and recent high attrition rates, embedding sustainable processes is increasing in importance. What metrics do you use in your organization to measure the success of your compliance initiatives? Set Goals and Evaluate Performance. Sponsored by: Convercent; Every organization should integrate information, processes, and systems to deliver metrics that support the ability of the business to achieve objectives while addressing uncertainty and acting with integrity. Which business metrics do you measure and what are the best tools for doing it? Don’t confuse process and activities metrics with outcome metrics. There are over 250 global and local ethical indices schemes, with FTSE4Good and the Dow Jones Sustainability Index (DJSI) two most well known ethical investment indices for UK companies. While misconduct, gaps, and other issues can still occur regardless of the strength of an organization’s compliance program, how an organization responds to a problem or crisis reflects its compliance effectiveness. Since most managers will give you a blank stare when you ask them what compliance and ethics metrics they’d like to see, be prepared to provide them with a menu of options and help them understand how they could be put to use. In a business setting, an employee's integrity can affect her work ethic. Business metrics. While there are no universally accepted definitions of what makes a compliance program effective, and there is no one metric for evaluating effectiveness, the pillars of an effective compliance program are sound design and execution, timely and proactive responses to compliance issues, and readiness for regulatory change. Identifying and measuring the ethical standards and personal integrity of others is difficult. Being able to demonstrate proficiency after taking a course can be the key to providing employees with those training experiences that actually work as indicated by performance metrics. Your management team is already suffering from KPI overload. App Store Ratings. Readiness for regulatory change requires organizations to both anticipate regulatory changes and respond quickly to comply. When it comes to ethics and compliance messages being heard, absorbed and acted on, timing is everything. Assessments, for example, can also provide insights on cultural issues across the enterprise or on compliance bypasses that would not necessarily be caught through the other metrics. Today’s increasing emphasis on metrics in sustainability policy and management presents an interesting challenge for ethics. In addition, compliance leaders in organizations with more mature programs are also attentive to the need to improve the sustainability and efficiency of their programs. Check your email for next steps. Learn to measure and manage the meaningful. 2. A business may think it has the best call center, but it won't know for sure until it measures and reports the proper KPIs and metrics. To go from 98% to 99% compliance may require as much focus, discipline and energy as achieving the first 98%. VComply’s dashboard provides relevant insights of the level of compliance. It was originally published on December 6th, 2008. This is demonstrated when the program works as intended and recurring issues decrease over time. User Feedback. In response, compliance leaders are increasingly pursuing multidimensional metrics that link operational performance with compliance as well as metrics that can provide a deeper understanding of the organization’s compliance effectiveness. They provide an index for investors as to what can be considered an “ethical investment”. While every KPI has value, call centers need to focus on a limited number of these metrics to ensure they prioritize and make effective decisions. Depending on where you are in your marketing journey, digital marketing is either a voodoo-like superstition or a teachable science anyone can master. Timing can be everything, so let’s discuss how to make the most of our time. A couple weeks after the dust has settled in the arrest of the University of Utah nurse for upholding hospital policy, it’s time to investigate to see what ethics and compliance officers can learn. Jim has extensive experience in implementing world-class compliance and ethics programs sufficiently robust to withstand U.S. Department of Justice scrutiny. Of course, no function in a company is immune from budget cuts and this is doubly true of those that are not directly related to income generation. 4. The time at which we ask employees to attest to a policy may determine if the standards in that policy are followed. The whole idea of attempting to manage compliance and ethics risks by supplementing existing corporate structures already created for this purpose with a small group of compliance/ethics professionals is still relatively new. User Satisfaction Metrics. Change is a constant in accounting. Jim Nortz is Founder & President of Axiom Compliance & Ethics Solutions LLC, a firm dedicated to driving ethical excellence by helping organizations implement effective compliance and ethics programs. We’re not living in Victorian times anymore. Metrics to measure: Retain more clients, % realization per client, improvements in chargeable hours per client. Be strategic. Managing employee compliance with policies and … Everything about your business, one click away. The golf course could measure the actual reduction in water usage. In addition, changing culture in organizations is very difficult and almost always takes years to achieve, even in the best of circumstances, and significant, sustained effort to maintain. A critical part of this response is the ability to implement a sustainable process to self-identify and self-report to regulators potential or alleged misconduct in advance of regulatory scrutiny. To address these issues, a list of recommended metrics includes: Originally appeared in KPMG’s “The Compliance Investment”. In addition, organizations should have processes for receiving and resolving broader issues, including consumer complaints. Metrics are repeated measures that are applied as references for assessing variance as compared to a defined target. Multidimensional metrics, for example, can enable an organization to better understand the root causes of issues related to retention, engagement, and attitude; the time needed to close audit issues and the number of repeat issues; and client satisfaction or complaints at the business unit level. #CSR Impact metrics can waste time, money and goodwill. Illustration filed in Compliance, Ethics. This includes revisions to its internal infrastructure and approaches. If you are a compliance/ethics officer in a company with well run functions (legal, HR, regulatory, etc…) your firm’s compliance and ethics performance is probably already pretty good. The strategic moments at which we encourage honesty can directly impact the immediate decision making choices that follow. During your employee’s performance review, ask him to demonstrate how he completes job tasks in an efficient and cost-effective manner, and how this helps your company achieve its competitive edge. Karola has got years of experience in growth marketing and working with SaaS startups. A metric is a specific measurement or calculation associated with performance. They typically also consider the Committee of Sponsoring Organizations’ (COSO) internal controls framework and guidance and measure their program against the seven topics set forth in the U.S. Federal Sentencing Guidelines. Support Turnaround time. Lots of it. Thank you for subscribing! Innovate Measure (and Reward) Ethical Behavior You measure employee performance and sales. This slide contained the simple statement: “Measure or Die.” I noted at the time that this blunt pronouncement may seem a bit hyperbolic, but that it’s not far from the mark. This includes ensuring that they have a strong compliance culture embedded throughout the organization and that they are able to demonstrate to their boards and regulators that they understand and can manage their compliance risks. 18 Essential Metrics to Measure Your Digital Marketing. When ethics are discussed, probably one of the last things to come to mind is measuring them, particularly in numeric terms. Previously, Jim served on the Board of Directors for the Ethics and Compliance Officers Association and the Board of the Rochester Area Business Ethics Foundation. 20 Questions to Ask When Prioritizing Your Policy Development Efforts, 4 Steps for Risk-Based Back-to-Work Planning, From Compliance to Risk Management to Better Performance. Compliance leaders across industries are focused on assessing and enhancing their compliance effectiveness in response to regulatory requirements and expectations. Find an easy way to present your metrics to them that is easy to understand at a glance. 28. If we are unable to demonstrate to our respective organizations that our efforts are materially reducing costs or compliance/ethics risks, then it’s just a matter of time before compliance offices are shut down or consolidated into more traditional corporate functions like the Law Department, Accounting Department or Human Resources. Multidimensional metrics, for example, can enable an organization to better understand the root causes of issues related to retention, engagement, and attitude; the time needed to close audit issues and the number of repeat issues; and client satisfaction or complaints at the business unit level. While there is room for improvement, it is heartening that ethics and compliance programs are moving beyond the check-the-box approach to a broader systems approach. Transformation. For example, the ethical behavior of … Without such a correlation, you will continue to cast around in the darkness, never knowing whether you are making progress toward your intended destination. While many compliance leaders are beginning to realize the value of their compliance investment through this focus on effectiveness, they often struggle with how to evaluate it. The breadth of KPI measures led to a key discussion on how to turn these metrics into early warning signs in order to better establish a predictive, low cost ethics and compliance program. Have a conversation with your management team to see what data they would find useful in allocating limited resources to better manage compliance and ethics risks. Monitoring and communicating compliance programs’ effectiveness is crucial, but the metrics some companies use may be too basic and possibly inadequate, according to a new report from Deloitte and Compliance Week. There can be other metrics which are relevant to your line of business which should be tracked along with the metrics mentioned above. In recent updates to the indices, Johnson & Johnson and Vodafone were 26. Unlike many other departments, call centers have metrics available to measure results up to the minute and second. By taking some of these ideas into account and developing meaningful compliance and ethics KPI’s, my hope is our profession will not only survive but thrive in the long-run, and live up to its potential of helping corporations navigate in increasingly complex and hazardous regulatory environments. Decide what specific metrics you will measure each year and then analyze data for trends. Try for free . Furthermore, compliance leaders recognize the limits of one-dimensional statistics, such as feedback from customers and regulators or decreasing fines. Proposed by Gabor Papp in 2017, RARRA is almost identical to AARRR except it re-prioritized “Retention” over “Acquisition”: 1. . Since then, Jim has served as a compliance officer at Crompton and for five other multinational corporations, the most recent of which was as Chief Compliance Officer at Carestream Health. Using a variety of metrics also can help CCOs determine the ethics and compliance program’s future budget. You need an independent set of Outcome metrics to show whether all your efforts are yielding results. How to Measure Work Ethics & Integrity. Using technology is one way to measure the impact of a learning experience. 5. Once you have developed a reliable gauge that your management team has confidence in, encourage your management team to use it to set performance targets in a manner that would hold directors, officers and employees accountable for achieving them. Additionally, surveys can measure the strength of internal controls, identify best practices, and detect new risk areas. Deliberate time management is what developers have often problems with. And, when metrics are used to identify problems and make improvements to the learning experience, you’ll be able to increase the value of training for both learners and the business. Here are the main reasons why they are extremely using these methods: 1. CONCLUSION WHY COMPLIANCE INSIGHTS MATTER Federal Sentencing Guidelines for Organizations (FSGO) lists measuring effectiveness, that is evaluating periodically the effectiveness of the organization’s compliance and ethics program. After ethical performance measures are in place, the business owner sets goals for improving the company’s ethical performance. Many people assume that you have to choose one set of metrics over the other. Such metrics, though, favour short-term wins, shareholder demands and performance bonuses, rather than longer-term growth. by Jack Torrance. 3. Karola Karlson. Activation: what % have a “happy” initial experience? 30. Regulators in certain industries have developed industry-specific guidance. In the event you don’t already have a robust and meaningful set of compliance and ethics key performance indicators (“KPI’s”) at your company, here are a couple of things you might consider doing to remedy the situation: Just because you’ve got all of the elements of the US Organizational Sentencing Guidelines’ seven elements of and effective compliance and ethics program and have done thousands of hours of compliance training does not mean you’ve succeeded in improving your firm’s compliance and ethics performance. Jim is a frequent guest lecturer at the University of Rochester’s Simon School of Business, RIT’s Saunders School of Business, St. John Fisher College, Nazareth College and other law schools, universities and organizations around the country. A measure is a quantifiable expression of performance collected during the execution of activities. ethical behavior in the workplace as a whole is hard to measure and an attempt to quantify it should go through the use of combined Key Performance Indicators (KPI). Choose which work from home metrics you measure based on what’s most important to your company. 2. Demonstrating the effectiveness of your training is made much easier by using appropriate training metrics. Here are three ways to measure training effectiveness: Illustration – Integrated Compliance & Ethics Metrics. Rightly or wrongly,some would argue that a quantitative approach to measuring ethical behavior in a corporate entity is somehow alien to ethics and moral deliberation. Jim spent the first 17 years of his career as a criminal and civil litigator and Senior Corporate Counsel before becoming Crompton Corporation’s first Vice President, Business Ethics and Compliance in 2003. The next set of API metrics are business performance metrics. Start by engaging key stakeholders, including internal stakeholders, on the value/why questions, what success will look like and what metrics will help you understand your progress towards success. But you're forgetting to measure what matters most to overall success: ethical behavior. HOW DO YOU MEASURE EFFECTIVENESS? Sound design and execution is the foundation of effective compliance. What metrics do you wish your organization had in place for such measurement. These presentations were followed by about 45 minutes of open Q&A and discussion about the topic. Innovation is a tricky thing to measure because it is difficult to separate from business-as-usual activities such as improvement.The goal of innovation is to create new techniques and products that are an order of magnitude better than the closest competition. FTSE firms have been panned for not reporting their ethical performance - but doing good is difficult to define. Interested in how to measure CSR?See this page for a guide to our coverage.. Back in 1999, in the early days of Social Venture Network (SVN), I was the “measurement” contributor to a distinguished team that offered input into what became the very first standards for corporate social responsibility (CSR). Retention: do they come back over time? Examples of such forward-looking metrics might include a “click rate” that measures the number of employees who have read a particular policy, or tracking minor employee misconduct as an indicator of potentially more serious future misconduct. 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