Compliance required by companies in the new era
How to prevent compliance violations
ーFocus on issues of consciousness－
ーFocus on issues of consciousness－
Objectives
"Bad information didn't come up from the field" is a common keyword in many apology press conferences for organizational wrongdoing. In those companies, the employees are excellent, diligent and, on average, highly ethical. Almost all of those companies have introduced advanced governance mechanisms and are conducting compliance education. Even so, it is important to focus on the fact that bad information does not spread within the organization and that organizational fraud cannot be prevented. In addition, the majority of companies have somehow managed to catch up on the surface of internal control, compliance, corporate governance, ESG, etc., while being swept away by the times.
We call it "pretending to act" and "making an alibi." We will not deny this completely. In reality, there are situations where you need to pretend to be doing it. On the other hand, there are many people who really want to do governance and risk management.
In this training, we will think together about whether there are weaknesses in the organization of companies and in the people who work in the companies, and if so, what they are, using the three keywords of accountability, principles, and integrity.
We will focus on the most important theme that has not been covered in compliance education so far, what is necessary for employees as a prerequisite for governance and risk management. It is also the most difficult subject.
While it is important to have a form of compliance centered on conventional legal compliance, the question of how to raise the consciousness and the new form of compliance will become extremely important in the future. This is a new perspective on compliance that has not been discussed in previous compliance training centered on legal compliance.
"Bad information didn't come up from the field" is a common keyword in many apology press conferences for organizational wrongdoing. In those companies, the employees are excellent, diligent and, on average, highly ethical. Almost all of those companies have introduced advanced governance mechanisms and are conducting compliance education. Even so, it is important to focus on the fact that bad information does not spread within the organization and that organizational fraud cannot be prevented. In addition, the majority of companies have somehow managed to catch up on the surface of internal control, compliance, corporate governance, ESG, etc., while being swept away by the times.
We call it "pretending to act" and "making an alibi." We will not deny this completely. In reality, there are situations where you need to pretend to be doing it. On the other hand, there are many people who really want to do governance and risk management.
In this training, we will think together about whether there are weaknesses in the organization of companies and in the people who work in the companies, and if so, what they are, using the three keywords of accountability, principles, and integrity.
We will focus on the most important theme that has not been covered in compliance education so far, what is necessary for employees as a prerequisite for governance and risk management. It is also the most difficult subject.
While it is important to have a form of compliance centered on conventional legal compliance, the question of how to raise the consciousness and the new form of compliance will become extremely important in the future. This is a new perspective on compliance that has not been discussed in previous compliance training centered on legal compliance.
PROGRAM
- The truth about organizational fraud that 90% of managers do not know
・Mechanism of childish organizational fraud involving a large number of people in a top-notch company
・Actually, morality alone cannot prevent systematic fraud.
・Three key words to know in order to prevent organizational fraud “Responsibility” “Accountability” “Integrity”
・Only correct information leads to correct management
・Communication tips that subordinates want to report unintentionally
・Follow the principles instead of just following the given rules - I want you to remember this, the method to make an organization that raises correct information
・The ultimate purpose of risk management in a company is not to prevent incidents from happening
・Risk management is not a job of a person in charge. But everyone.
・Risk management means "Take action first", and what you do after an incident occurs is "Clean up"
・Management by objectives and risk management are always two sides of the same coin
・Are you aware that you have no choice but to do what the auditor told you to do?
・5 ways to become a person who can manage risk, which people who know are silently doing - Summary What is the new compliance training that will be required in the coming era?
The essence of rule 「What is a rule?」
Under rules, you can only choose one.
① When you have to follow
② When you have to break
There is no time “Either will do”.
If the rule is a law, there would be almost no time when it must be broken.
However, at the corporate manual level, it is virtually impossible to create a manual that assumes every situation. However, it could be the case that something unexpected happens in the manual, people may even die if you stick to the manual.
The rules can be revised if necessary, but when the revisions cannot be in time, you have to break the rule. It would be a time when both importance and urgency are met (such as the danger of human life in front of us).
It is not “you may break“, but you have to break. “It doesn't matter if you don't break it“ is not a rule. As a result of sticking to the rules, there is no explanation if you sacrifice human life. Even if you follow the rules, you may be blamed.
The judgment on the spot may be mistaken. But it is necessary to take that risk.
Discuss with colleagues, anticipate situations where the rules should be broken, and share the readiness to violate them (although most of the discussions can come up with ideas for rule revisions and resolve them).
This way of thinking will lead to the sharing of members who "naturally follow the rules other than such situations". That is the real aim. I often hear the words "There are rules, but not everyone follows." The expression is wrong. It should be said that there are no rules. What everyone follows is called a rule, not a bunch of documents.
Continuous revision and maintenance of rules are not easy. It also leads to the elimination of the unnecessary rules , which is what it should be.
① When you have to follow
② When you have to break
There is no time “Either will do”.
If the rule is a law, there would be almost no time when it must be broken.
However, at the corporate manual level, it is virtually impossible to create a manual that assumes every situation. However, it could be the case that something unexpected happens in the manual, people may even die if you stick to the manual.
The rules can be revised if necessary, but when the revisions cannot be in time, you have to break the rule. It would be a time when both importance and urgency are met (such as the danger of human life in front of us).
It is not “you may break“, but you have to break. “It doesn't matter if you don't break it“ is not a rule. As a result of sticking to the rules, there is no explanation if you sacrifice human life. Even if you follow the rules, you may be blamed.
The judgment on the spot may be mistaken. But it is necessary to take that risk.
Discuss with colleagues, anticipate situations where the rules should be broken, and share the readiness to violate them (although most of the discussions can come up with ideas for rule revisions and resolve them).
This way of thinking will lead to the sharing of members who "naturally follow the rules other than such situations". That is the real aim. I often hear the words "There are rules, but not everyone follows." The expression is wrong. It should be said that there are no rules. What everyone follows is called a rule, not a bunch of documents.
Continuous revision and maintenance of rules are not easy. It also leads to the elimination of the unnecessary rules , which is what it should be.
The essence of accountability
《 What is the true nature of the responsibility we have? 》
⇒Taking responsibility in the business world means suffering a loss.
The essence of a liberal economy is that you are free to do any business, and you have to suffer losses yourself.
Taking responsibility in the business world means suffering a loss. All shareholders are responsible. We, including the top management, manager and all employees "cannot take responsibility".
Let's humbly start talking from there. We cannot take "responsibility", but we are here to fulfill our "responsibility". There are two responsibilities that managers and employees should fulfill.
(1) One is "responsibility to get the job done". It's usually called just “responsibility”. All employees bear it.
(2) The other is "accountability", which is the responsibility only of the person entrusted with something.
《 Chain of accountability in corporate organization 》
The management is accountable to the shareholder/investor, and the employee entrusted the job by the management is accountable to her/his boss. This is accountability in a company, and there is a chain of accountability within the company. The requirements for maintaining the chain within the organization are (1) to give a reasonably convincing explanation to the boss and (2) to reassure the boss.
Accountability is not an explanation what you did, but to do the work you can explain. It must be done from the usual so that the person who entrusted it can be convinced and relieved.
"Report what you have done" is not enough, "do what you can report".
The ability of accountability is enhanced by OJT.
⇒Taking responsibility in the business world means suffering a loss.
The essence of a liberal economy is that you are free to do any business, and you have to suffer losses yourself.
Taking responsibility in the business world means suffering a loss. All shareholders are responsible. We, including the top management, manager and all employees "cannot take responsibility".
Let's humbly start talking from there. We cannot take "responsibility", but we are here to fulfill our "responsibility". There are two responsibilities that managers and employees should fulfill.
(1) One is "responsibility to get the job done". It's usually called just “responsibility”. All employees bear it.
(2) The other is "accountability", which is the responsibility only of the person entrusted with something.
《 Chain of accountability in corporate organization 》
The management is accountable to the shareholder/investor, and the employee entrusted the job by the management is accountable to her/his boss. This is accountability in a company, and there is a chain of accountability within the company. The requirements for maintaining the chain within the organization are (1) to give a reasonably convincing explanation to the boss and (2) to reassure the boss.
Accountability is not an explanation what you did, but to do the work you can explain. It must be done from the usual so that the person who entrusted it can be convinced and relieved.
"Report what you have done" is not enough, "do what you can report".
The ability of accountability is enhanced by OJT.
Relationship between Principle and Accountability
What are the Principles of a Liberal Economy? The answer is "Freedom and responsibility". You are free to do business, but you will suffer losses yourself.
We are using the mechanism of "Company". In order for shareholders to take responsibility, accountability by the management is a prerequisite.
What are individual company’s principles? What all employees aim for? The answer is the corporate philosophy corresponds to that.
Say what is right in light of the corporate philosophy and act.
At each workplace level, what is the principles? It can be said to be a "shared priority“ in the work place. The accountability of the members is a prerequisite so that the correct information can be exchanged.
We are using the mechanism of "Company". In order for shareholders to take responsibility, accountability by the management is a prerequisite.
What are individual company’s principles? What all employees aim for? The answer is the corporate philosophy corresponds to that.
Say what is right in light of the corporate philosophy and act.
At each workplace level, what is the principles? It can be said to be a "shared priority“ in the work place. The accountability of the members is a prerequisite so that the correct information can be exchanged.
In order for the principles to be valid within the organization (the correct opinions are valid and function), it is a prerequisite that the members have the ability of accountability.
