Designing compensation to operationalize compliance - a podcast by Thomas Fox

One of the areas that many companies have not paid as much attention to in their anti-corruption compliance programs is designing their compensation system to more fully operationalize compliance. However, the DOJ and SEC have long made clear that they view monetary structure for compensation, rewarding those employees who do business in compliance with their employer’s compliance program, as one of the ways to reinforce the compliance program and the message of compliance. 
There are three key questions you should ask yourself in modifying your compensation structure. First, is the change simple? Keep the compensation plan simple and even employee KISS, (Keep It Simple Sir), when designing your program. Second, is the changed aligned with your company values? As the CCO or compliance practitioner, you need to posit the most important compliance goal your entity needs to achieve. From there you should determine how your compensation program can be aligned with that goal. Third, is the effect on behavior immediate due to the change? Finally, under immediacy, it is important that such structures be put in place “immediately” but in a way that incentives employees.
Three key takeaways:

The DOJ and SEC have long advocated compensation to motivate employees into ethical and compliant behaviors.

Keep the compliance aspects of your compensation structure simple and easy for your employees to understand.

Have full transparency in the frame of your compensation structure.

Further episodes of 31 Days to a More Effective Compliance Program

Further podcasts by Thomas Fox

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