Elevating compliance in a constrained environment

Amii Barnard-Bahn offers some practical tips on how to elevate the profile of compliance within the business.

In today’s business landscape, compliance professionals face a paradoxical challenge as organisational risks increase, budgets tighten and calls for deregulation grow louder. This creates a perfect storm in which compliance functions must demonstrate greater value with fewer resources. Yet within this challenge lies an opportunity: to elevate the profile and influence of compliance by becoming true strategic partners to the business.

The stewardship, clear thinking, and insight that compliance brings to an organisation has never been more critical. We need to respond quickly to changing conditions, without reacting thoughtlessly. In constrained environments, organisations tend to fall into fear-based decision-making that can lead to brand damage, legal risk, key talent departures, and regulatory enforcement when business goes bad.

Many compliance professionals can attest to a frustrating reality: executive leadership often perceives the compliance function primarily as a cost centre with little connection to organisational growth and success. We dream of more, of a day when compliance is viewed as intimately aligned with achieving the long-term interests of the organisation. This article provides practical strategies for compliance professionals at all levels to elevate their function’s profile and effectiveness despite resource constraints and deregulatory pressures.

Building influence as a business partner

To ensure compliance is a priority for your leadership team, you need ‘mindshare’. Do they listen to you? Are you asked to advise on relevant key decisions? The executive team needs to view you as an equal business partner critical to the organisation’s success.

To exert influence, you must have solid relationships with key stakeholders. Your boss, peers, team, and core internal customers are critical to your ability to influence actions, investments, and messaging across your organisation. Based on behavioural research, you must first connect and listen to other people before they will listen to you. People won’t be influenced by you if they don’t feel you are a partner.

Consider adopting the Japanese concept of nemawashi, the practice of “going around the roots” to prepare for change. Before presenting major compliance initiatives, quietly engage with stakeholders to gather input and build support through informal discussions. This approach allows you to address concerns early and enlist champions for your ideas.

For compliance professionals at different levels:

• Team members: Focus on building credibility through consistent delivery and developing expertise that makes you a valuable resource.
• Managers and team leaders: Conduct stakeholder analyses to identify key relationships and build your influence network.
• Department heads: Position compliance as a competitive advantage that enables business growth while managing risks.
• C-suite level: Integrate compliance considerations into strategic decision-making by demonstrating how compliance contributes to long-term success.

Conduct a quick self-audit of your relationships to assess your influence network. Identify the top 10 people who help you get your job done and grade your interdependence on a scale of 1-5. Look for red flags – are you taking more value than you’re giving? Is your network properly diversified? Where relationships are imbalanced, schedule regular one-on-one meetings to learn about and help stakeholders reach their goals.

The stewardship, clear thinking and insight that compliance brings to an organisation has never been more critical.

Prioritising what matters most

Very few businesses remain untouched by today’s economic pressures. Update your compliance function’s strategic plan to ensure resources align with your business’s activities and risk profile, which can shift and spike in constrained environments. For example, budget cuts may increase the risk of fraud and pressure to cut corners, while changes in work models may elevate privacy and security concerns. Simultaneously, your resources are typically reduced, leading to a perfect storm of increased risk and decreased capacity.

Take the long view. We’ve never had the resources needed to prevent all compliance risks. If your C-suite colleagues are making cuts, compliance will be expected to do its share. Verify your priorities and pick your top three areas of focus. When everyone is cutting back, you run the risk of making everything seem urgent if you have too many priorities.

As one Fortune 500 CEO put it to me, “I know compliance is important, but it’s only 20 percent of what I need to worry about.” This is a common perspective from the executive team. When leaders act as though every project is urgent, it demonstrates an inability to prioritise.

To avoid being viewed as out of touch:

1. Identify compliance areas that provide clear competitive advantages (such as data privacy or trade compliance).
2. Differentiate between mandatory regulatory requirements and value-added initiatives.
3. Develop a risk-based framework for resource allocation.
4. Have a “crisis plan” ready: know where you could cut back without sacrificing essential functions.

For example, one compliance leader negotiated with the executive team to delay a major compliance implementation by six months in exchange for a firm commitment that it would be in the next year’s budget. Have a similar plan ready so if cost reductions become necessary, you can be proactive and ensure you have a voice in the decision.

Before presenting major compliance initiatives, quietly engage with stakeholders to gather input and build support through informal discussions.

Making the business case for compliance

Once you’ve established your influence and priorities, it’s time to advocate for them. Engage key stakeholders in discussing your core strategy and incorporate their feedback, with the ultimate goal of gaining their sponsorship (especially the CFO, keeper of the corporate purse, and HR, steward of corporate culture).

Place compliance priorities in the context of overall business strategy. Stay abreast of industry news, emerging risks, and of how compliance enables your business to focus on execution without costly disruptions from regulatory actions, litigation, or reputational damage.

Better compliance practices please more customers and help companies gain business. This is especially true for specific regulatory areas such as data privacy and export controls. During my tenure leading USPharma compliance at McKesson, our team collaborated with the IT department on a pilot project to secure ISO 27001 IT security certification for a business unit. The results exceeded expectations – our business partners were pleasantly surprised by the enthusiastic customer response. Sales improved noticeably, prompting the team to feature their newly-acquired security certification prominently across their marketing materials.

When presenting your business case, speak and write concisely in language your stakeholders value. Mirror the terminology your executive team uses and avoid compliance jargon. Organisations that have not experienced a major compliance failure often lack the depth of experience to heed warnings at face value – they need convincing.

To make compliance more strategic:

1. Position compliance as a competitive advantage that drives business growth
2. Make compliance more proactive by providing early-stage advisory input
3. Use your unique vantage point to deliver predictive insights that improve efficiency
4. Quantify the value of compliance in business terms (cost avoidance, risk reduction, operational efficiency)

Remember that, in the end, the compliance programme is as strategic as the CEO and board believe it is. And to quote Carla Harris: “Perception is the co-pilot to reality.” Envision how you want compliance to be perceived in an ideal world, then design backwards to achieve that outcome.

Leading through challenging times

In a constrained environment, it’s valuable to be the inspirational leader everyone wants to follow. For compliance professionals, this is critical because we know that to have an ethical culture, the message needs to be carried forward by frontline management. Employees are most impacted by how their direct manager assigns tasks and evaluates performance.

To inspire others, share a clear, concise message that ties compliance to your organisation’s purpose. Ask yourself: what problems do customers pay you to solve, and how is ethics part of your brand promise? Employees need to connect with meaning in their work, especially during challenging times.

Organisations have a natural tendency to resist change and stay as they are. To ensure lasting business change, leverage change management principles:

1. Establish a sense of urgency: Organisations won’t substantially change unless there’s a burning platform. Quantify what will happen if the change is not implemented.
2. Create the guiding coalition: Conduct a stakeholder analysis. Who is impacted by your project? Invite key representatives to be co-sponsors or advisors.
3. Communicate your vision and strategy: In one sentence, explain your vision of the future state and why employees should care. For big changes, enlist communications professionals to help with messaging.
4. Empower employees and generate short-term wins: Create feedback loops to monitor how your change is taking hold. Find cheerleaders for your change and empower them to help you. Measure and celebrate progress.
5. Sustain the change: Plan for the aftermath of implementation to make sure the change sticks. Listen to suggestions for improvements and be willing to adjust.

An important element of leadership is maintaining gravitas. Be aware of your presence and its impact on others (emotions are contagious!). Stay centred in the storm – you want to be the calm presence everyone gravitates toward during uncertain times.

Find the heroes – the employees doing the right thing when no one is watching – and show appreciation. Too frequently, compliance professionals are trained to find everything wrong in a situation. We are sometimes blind to how this approach impacts others who don’t share this professional mandate.

When you lead with gratitude and focus on positive intent, it demonstrates your desire to be helpful, and this helps others align with your leadership, even in challenging times.

Quantify the value of compliance in business terms (cost avoidance, risk reduction, operation efficiency).

A holistic partner

These are times when compliance leadership is needed, and will likely be tested. Having influential partnerships, maintaining focus on key priorities, making a compelling business case, inspiring employees, and staying positive are the keys to success.

By positioning compliance as a strategic business partner rather than a cost centre, you can elevate its profile even in an environment of budgetary pressure and deregulation. Remember that constraints often spark innovation: this challenging period presents an opportunity to redefine how compliance creates value for your organisation.

In an ideal world, the compliance officer will sit on the executive team and be viewed as a holistic partner with contributions that go beyond the walls of compliance, improving operations, increasing sales, and promoting customer loyalty. With the right business knowledge, relationships, and perceptions of your function, what is possible? Don’t limit yourself to what is. Instead, consider what could be.

Through thoughtful leadership and strategic positioning, compliance professionals at all levels can ensure that their organisations move forward both successfully and ethically, proving that strong compliance isn’t just a regulatory necessity but a competitive advantage.