Global Compliance and Global Cultural Difference
A report published by Control Risks titled ‘International Business Attitudes to Corruption’ succinctly highlighted some of the extreme challenges faced by Compliance Officers within global organisations.
As regulators increasingly extend their global reach whilst at the same time anti-corruption laws become ever more comprehensive, Global Compliance comes face-to-face with culturally differing norms around the world.
The report points out that an over reliance on a belief that centrally driven compliance programmes will be understood and actively implemented in all parts of the globe can produce a dangerous disconnect between the perceived effectiveness of any programme and the actual reality on the ground. The danger is that the process looks comprehensive and watertight at HQ but leaks like a sieve when it lands in different geographies. This can lead to an increase in non-compliance – thereby unwittingly exacerbating the problems.
Why might this disconnect occur and is it a process or a people problem?
I think the answer comes in one particular sentence in the Control Risks report which says that ‘you need to really know who you are dealing with at every stage of your value chain, what motivates them, how they behave and how to forge compliant and collaborative working relationships’.
In reality this sentence is saying that you need to have a comprehensive understanding of the cultural drivers and expectations of the people you are interfacing with around the world and how those things will impact on the way in which your compliance programme lands. That’s a tall order and requires a huge degree of global cultural fluency – a degree of cultural fluency that is possibly quite rare in global compliance departments. In my experience some compliance professionals shy away from looking at the cultural nuances of all of this because it simply makes their jobs more difficult. It may indeed make their jobs more difficult but without the requisite amount of global cultural knowledge, their jobs are actually impossible!
If, for example, your cultural background is one where corruption is so endemic it is as much a part of life as buying bread, where it is considered very bad behaviour if you don’t try to manipulate the system for the benefit of your family, friends or tribe and where it is an insult not to lavish extravagant entertainment on a potential client – then being presented a new programme or process from a faraway head office is unlikely to change your perception of what the world looks like.
How do we address the difficulty of trying to shoehorn a benchmark set of compliance principles into a world in which vast swathes of people simply ‘don’t get it’ or are just not interested? We want to be ‘global’ but rail against it when the local comes through strongly. We want people to be fully integrated into the local market place so we can compete effectively but complain when people act as the locals act. We want people to be able to compete against the local competition who do not have to conform to the policies of an alien Head Office which might be counter-cultural in that location.
The answer to this has to be education – both at Head Office and throughout the international network – but this education has to go way, way beyond the typical compliance e-learning programme (which is often seen as a backside covering exercise anyway). The education has to be designed to help people develop a global mindset where all parts of a global organisation can see where the other parts are coming from. Globalisation is a mindset, not a word. Compliance is also a mindset, not a word (and certainly not a set of processes).
As Control Risks put it ‘you need to really know who you are dealing with at every stage of your value chain, what motivates them, how they behave and how to forge compliant and collaborative working relationships’.