We invite you to read the column written by our partner, Rodrigo Albagli, on the importance of compliance in companies as a result of the new Economic Crimes Law in Chile.
In September, the new law on economic crimes came into force, a regulation that has undoubtedly encouraged companies in our country to move forward with more strength and speed in the management of integrity and good practices.
Today the vast majority of large and even medium-sized companies have a crime prevention model, as many boards of directors have begun to become more actively involved in how their organizations mitigate risks and protect their most relevant and fragile asset: their reputation.
However, although progress has been made, it is very important for boards of directors to ensure that their companies have not built a merely cosmetic or “paper” prevention model, and the key to this lies in its effectiveness. This is where the company’s real willingness to move towards best practices and a strong ethical culture is revealed.
And why is this important? Firstly, because an effective risk prevention program will be the main defense that companies will have in case a crime is committed within their organization and avoid potential fines or even imprisonment.
But also, and perhaps even more importantly, because practical evidence shows that a strong culture of ethics and compliance, supported and promoted by the board of directors of companies, leads to better indicators of innovation, adaptability, employee loyalty, talent attraction, customer satisfaction and reputation, among other results.
To ensure the effectiveness of a prevention model or a compliance program there are no recipes, there is no such thing as copy-paste. Compliance is a tailor-made suit for each organization. Much will depend on your industry, size, business risks, among many other factors. However, there are common tools that all companies should include in their risk prevention programs to have a solid foundation.
First of all, it is essential to perform due diligence to identify potential risks that could turn into the commission of crimes. In this aspect, it is very important to keep in mind that it is not enough to look not only inside the organizations, but also in the ecosystem in which they move: partners, suppliers, contractors, etc.
The second key element is to train people at all levels of the organization, to create awareness of the potential risks and the consequences they may have, both at a personal level, in the case of executives, and at an organizational level. What is important in terms of effectiveness is that, rather than merely providing employees with regulatory content, an attempt is made to ensure that there is an understanding of the issues and how certain regulations or policies apply to day-to-day work, so that they influence their decision making.
It is also very important to have reliable and effective whistleblowing channels that not only allow quick action to be taken in the event of a crime being committed, but also to avoid any type of risk as far as possible. For the whistleblowing channel to be an effective tool, its responsible use must also be promoted. In this sense, some companies support this tool through campaigns that promote the correct use of these reporting lines.
Finally, it is essential that companies have a board of directors aligned with the risk prevention program. The leadership of companies today has a key role to play in supporting its development and, above all, in communicating the importance of prevention throughout the company. In addition, it is very important that the board of directors promotes continuous measurement, which not only makes it possible to visualize progress, but also to identify those aspects that need to be improved.
The leadership of companies today must play a key role so that we do not have “paper” prevention models. This will allow board members not only to fulfill their duty to act with due diligence in the supervision of business, but also to contribute to the internal improvement of the organization, which ultimately results in a country with greater probity and transparency.
