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Double the Impact of Your Ethics and Compliance Program – Part Four of the Engaging Middle Managers Series

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Double the Impact of Your Ethics and Compliance Program – Part Four of the Engaging Middle Managers Series

This is part 4 of our Engaging Middle Managers series. Missed part 1, 2, or 3? Find Part 1: Middle Managers: The Key Messengers For Your Ethics and Compliance Training Program here, Part 2: 10 Steps to Help Middle Managers Embrace Your Ethics and Compliance Training Program here and Part 3: Doubling The Impact of Your Ethics and Compliance Program With A Liaison Network here.

Earlier this month, we had the pleasure of listening to Jeff Piposar, Director and Executive Advisor for CEB Compliance & Ethics, share how to multiply limited resources in our webinar, “Building A Scalable Compliance Infrastructure: Leveraging a Liaison Network.” He was joined by The Network’s VP of Corporate Strategy and Product Development, Jimmy Lin.

In our last post, we covered why you might want to take advantage of a liaison network and how to build the business case to get started. In today’s post, we’re going to cover how to establish the structure of your network, as well as considerations to keep in mind while staffing your network. Next week, we’ll go on to cover how to optimize the performance of your liaisons. (Can’t wait for next week? Click here to download the whole webinar today.)

Establish Structure and Staffing

There are a few critical considerations that need to be addressed before you start building your network:

  1. What do we want liaisons to do?
  2. What skills will the liaisons need to perform these duties?
  3. How many liaisons do we need?
  4. Where do we need them?
  5. Who do they report to?

As you can see, the answers to these questions will drive the overall structure of the network and who you choose to recruit.

Determining the Job Expectations and Required Skills

The graph below shows the difference between the expectations leaders had in regard to what liaisons would do and the actual activities liaisons performed. Across the ten different activities, you’ll see a bar graph with percentages and diamond icons. The percentages on each bar represent the expected amount of activity, while the diamonds represent what actually happened. As you can see, reality far exceeded the expectations in all but one activity, “Lead Local Investigations,” which was about equal to the expected level of activity. Overall, the liaisons did much more than expected.

16-ethics-and-compliance-program-liaison-activity

When you’re writing the job description, you’ll want to think about what kind of skills enable someone to successfully complete the activities you’ve defined as important for your program. Jeff provided a sample description:

17-ethics-and-compliance-program-liaison-sample

Network Size

In order to determine the most efficient size for your liaison program, you’ll need to consider your industry’s regulatory intensity, as well as the size of your company’s employee base. The ideal program size maximizes impact per liaison, avoiding the indirect costs companies incur when programs are disorganized and overstaffed or underutilized and understaffed.

20-ethics-and-compliance-program-compliance-risk-assessment

Distribution Logic

Once you’ve decided how many liaisons you need, you’ll need to determine whether you’re going to recruit business or functional staff, which seniority level to recruit from and how to distribute them across the organization.

According to CEB’s research, functional lines of business tend to serve as liaisons, particularly those with a corporate assurance background. You’re likely to find these liaisons in the HR, legal, finance and internal audit departments. In the CEB survey, 54% of liaisons came from these departments, with another 26% coming from general management, product development or manufacturing, sales and marketing. The other 20% are classified as “other” and encompass everything from IT departments to supply chain.

For an example of what this looks like, check out the chart below:

23-ethics-and-compliance-program-sample-distribution

In terms of seniority, half of participating companies did not have a seniority requirement. A quarter required a liaison to be at least a front-line manager, and another quarter required liaisons to be at least middle managers. It’s important to note that none of the companies had a liaison program that was limited only to senior managers (VPs or above). All of the companies surveyed required their liaisons to be actively in the field and engaging directly with employees.

The distribution structure is enhanced by involving middle managers, as it’s easier to distribute liaisons throughout the organization. If your liaisons are too high-level, they become too removed from local employees, and there are likely fewer divisions, making distribution difficult. If they’re too low-level, you face the opposite problem, in which it becomes difficult to distribute liaisons across so many subgroups, and the liaisons themselves may have limited influence. The graph below makes this easy to visualize.

19-ethics-and-compliance-program-distribution-layout

Time Commitment

Most companies (56%) ask for 5-10% of an employee’s time for liaison activities. 18% ask for less than 5% of an employee’s time, another 18% ask for 10-20%. Only 9% ask for more than 20% of an employee’s time. Jeff predicts that by next year, the numbers will be skewed even more heavily towards the 5% time commitment.

You may have considered establishing a service period for your liaisons. 21% of CEB’s surveyed companies chose a two year term, while 71% chose an indefinite or permanent liaison rotation length. As liaison networks become more and more prevalent, it’s likely that this will also change. Two years seems to be a popular length of time for several reasons. One year really doesn’t give the liaison enough time to truly settle in to the role and have much of an impact. A service commitment of two years, however, gives the liaison ample time to make progress within the role, but still pass the torch and move on to other career commitments.

Reporting Lines

Rounding out the structure of your compliance liaison program is the reporting component. Liaisons need to know who to report to, and you need to know who owns the program. 53% of the surveyed organizations reported to corporate compliance, while 27% reported to a local business function. Only 18% reported to local compliance.

A quarter of the programs were owned directly by a CCEO, which is not surprising for a smaller organization. Another quarter reported directly to a business unit leader, while another 21% reported to the corporate compliance staff. The rest of the liaison programs reported to a mixture of local and regional compliance staff.

In Part Five of this series, we’ll learn how to optimize performance for both individual liaisons and the liaison program as a whole. Do you have a liaison network at your company? If so, we’d love to hear your tips to success, or challenges in implementation, below in the comments.

For More Information About Ethics and Compliance Programs, Check Out These Resources:

About the Author

Pia Adolphsen, Associate Manager of Marketing Content Strategy. Pia leads content strategy at The Network. Previously, she led client advocacy and marketing initiatives in the competitive intelligence industry. She is strongly in favor of lattes, 1.0mm pens, and her Georgia Bulldogs. Connect with Pia on LinkedIn

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