By affecting where we work, the pandemic is impacting corporate compliance and shifted the landscape. The move to an online or work-from-home model has disrupted corporate compliance processes and procedures for many businesses and organizations. However, at the same time, the remote work format has introduced new compliance challenges and potentially greater risk. To promote compliance and minimize risk, organizations must review and realign compliance policies to engage employees in remote environments.
A New Reality In Corporate Compliance
Early in the pandemic, corporate compliance leaders may have thought the situation was temporary. Also, many put off overhauling policies and procedures in the hopes that their organization would quickly return to business as usual. However, as the country faces an ongoing crisis, it seems clear that corporate compliance leaders must plan with a new reality in mind.
As David Chen, JD, affiliate faculty and Seattle University School of Law alumnus put it:
“The rapid expansion of teleworking and remote operations management occurring across the world in the wake of the COVID-19 pandemic will forever change the way companies need to address organizational compliance and ethics.”
How Covid-19 is Impacting Corporate Compliance
Unpacking Chen’s assessment, we find both challenges and opportunities for corporate compliance units. Take just one operational area, procurement, and asset purchase decisions, as an example. Also, in most organizations, this decision-making oversight process relied heavily on in-person interactions to complete due diligence and document reviews. Now, these essential functions must occur completely remotely.
“Much of the oversight built into internal controls, policies, and procedures relied heavily on in-person review and direct physical collaboration between teams,” Chen said.
Without remote-work-specific policies and processes in place, organizations open themselves up to significant violations of internal policy, regulatory, and statutory compliance. Also, at best, compliance, and review processes may be delayed by unwieldy systems that don’t quite translate to the online workspace. At worst, some steps in the process may slip through the cracks entirely. Thus, the onus falls on compliance leaders within each organization to create policies and procedures tailored to the new reality.
Overhauling Corporate Compliance for Remote Work
Nearly every aspect of corporate compliance policies and procedures could benefit from updates to meet the challenges of this new way of doing business. Therefore, the following three focus areas represent both the most pressing risks and the greatest opportunities.
Workflow & Oversight
Because compliance teams cannot gather in the same space, they may need new tools for tracking compliance reviews and completing all parts of the process. Therefore, compliance leaders should think carefully about how to track and move documents through the system. Working remotely does not necessarily mean working with less oversight, but methods of oversight must be intentional and documented, and workflows must be redesigned with a completely virtual environment in mind. Only then can all parties know their responsibilities.
Intradepartmental compliance communication and interactions with leadership, employees, and stakeholders now take place mostly online. Compliance leaders should consider the platforms and venues where these communications take place. Carefully choosing the tools and platforms for communication can minimize risk and ensure compliance.
Employees may need additional guidance on how to manage sensitive information while working from home. Compliance leaders should create processes and procedures to guide workplace interactions when the workplace includes the home.
The swiftness of the move to online operations may have left organizations open to a greater risk of fraud. One study showed a 15 percent increase in fraud in the last year. Also, compliance leaders must work closely with cybersecurity and other departments to minimize fraud risk. At the same time, they must train all members of the organization in online fraud prevention techniques.
In short, says Chen, “Direct interaction training, oversight, and fraud controls must fundamentally address the seismic shift in the way organizations do business in the twenty-first century. Forging an engaging compliance culture is more important now than ever before with the increased autonomy that comes with the shift to remote work.”
While the necessity of these changes may feel like a burden, in reality, they also represent an opportunity for organizations. Additionally, reexamining corporate compliance policies and procedures can lead to more secure and stable organizations, more efficient processes, and a reduced risk of fraud.
Addressing the Learning Curve for Corporate Compliance
For professionals who have worked in corporate compliance for a long time, these changes might create a steep learning curve. Furthermore, going beyond compliance to thrive amidst these new compliance challenges requires a willingness to rethink established ways of working.
The shift may represent an opportunity for professionals who are advancing their careers through an online MLS program. By studying online, these students become comfortable in the digital environment. At the same time, they learn the latest industry changes from instructors working in the field. Through real-life scenarios, they hone professional judgment and learn to operate within the new online landscape of corporate compliance.
Also, whether you are an old pro at working from home or you are experiencing it for the first time, our Online Master of Legal Studies in Compliance and Risk Management program will help you get more comfortable with working, learning, and collaborating in digital spaces. Lastly, get program details.