Diane de Saint Victor, General Counsel at ABB Ltd, talks about her experience in developing and realizing compliance-programs.
There was a time when Legal dominated compliance. Lawyers would concentrate on translating laws and regulations into internal policies. This first wave of compliance led to the establishment of policies and procedures on topics such as multinational anti-bribery and corruption laws, anti-trust and trade sanction requirements. Compliance was regulatory-driven, dictating the specific policies that employees should follow.
Then came the second wave of compliance, which saw internal teams translating the regulatory requirements into workable processes. Policies became controls in the internal business processes, designed to prevent and detect violations.
The third wave of compliance is the age of the behavioral approach. This is much more an art than a science. It aims to communicate compliance requirements in a way that enables people to understand the underlying reasoning, adopt the intent, and turn it into action by running the business in a compliant manner. This is the integrity approach.
As Diane points out: «Integrity goes beyond the rule-based compliance approach to a value-based approach. It is not about looking good but about being good. People should ask themselves: Would I tell my kids what I’ve done?»
«Since beginning our integrity approach to compliance at ABB, we have seen an increase in the reporting of possible violations. This might appear to be a contradiction but it’s not: People no longer turn a blind eye. Instead, they report on possible violations, concerns or questions. That’s a good result! Don't look the other way. This is how we think about it at ABB. In encouraging our staff to ask questions and report on concerns, we have combined safety and integrity. Both require a culture of speaking up.»
«Compliance cannot be just a department in your organization. First and foremost it is an attitude. At ABB, therefore, we changed the department name from compliance to integrity. As changing names has little impact, what’s most important is that we put integrity on the agenda of the business leaders globally. The integrity team helps local management to communicate around compliance and integrity, offering tools to discuss it with employees as part of the regular business reviews.» «We have not separated the compliance function from Legal at ABB. I provide leadership to Legal and Integrity on an integrated basis. In this capacity the function is represented on the Executive Committee of the company and has a dotted line to the Finance, Audit & Compliance Committee of the Board of Directors. ABB’s ‘Chief Integrity Officer’ reports to me and is dedicated to integrity throughout the business. Finally, integrity has a more positive connotation than compliance. Our focus on positive communication and training is important to engage actively with all employees. This is key to achieving genuine compliance behavior.»
Not everyone jumps for joy at the thought of compliance. The same old protests can be heard: «It hurts our business», «It creates bureaucracy», «Our competitors also do it this way», «You are putting the company at a competitive disadvantage», «There is no level playing field» etc. Compliance teams must take a firm line against such voices. «We are sincere about our compliance goals,» comments Diane. «We are not doing this only because we have to, we are doing it because good business is in our long-term best interest. But crucially, we also hold our business leaders accountable for compliance and integrity within their part of the organization. We are strict with disciplinary measures to enforce compliance and integrity. Without enforcement the compliance commitment becomes artificial.»
Performance evaluation can be a powerful enforcement tool. This can mean taking tough decisions – and this in itself must be recognized. Diane concludes: «We thank managers who dare to make the right decision and employees who speak up. It is a ‘we thing’: We as ABB want to do clean and good business and if we make mistakes we must learn from that. Doing our very best to avoid reoccurrence. In the end, it is not only the tone at the top that matters – it is the tone of all employees.»
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