This article was originally published in Dentons global in-house legal insights survey 2023 – visit the full survey and report here.

The traditional approach to compliance has been about policing environments based on expectations of regulators, often creating distrust between business and compliance professionals. This can lead to the perception that the compliance team is a barrier and a ‘business-blocker’ which can unintentionally invoke behaviors that are not in the best interest of the company and certainly undermines its efforts.

In today’s complex regulatory environment, cooperation, partnership, and common goals are far more likely to infuse corporations with ethical behavior and mission success than the old policing model. Organizations looking to leverage their compliance personnel to create a competitive advantage are looking at their programs from a more holistic perspective.

While the building blocks remain the same—including programs around risk assessments, straight-forward policies, training, reporting systems and third-party management—today’s effective compliance programs start with a deep understanding of the business mission and strategy of the organization.

Here are our top three tips to creating a culture that focuses on advancing business opportunities byfusing compliance with the business strategy:

1. Collaboration should begin at the start of the project.

Compliance needs to be at the forefront of each new business endeavor not an afterthought or a check-the-box exercise. Bringing compliance and risk assessment into the conversation from the beginning allows for a more robust conversation and understanding of the risks and rewards at the outset of an opportunity rather than creating potential barriers down the road. The business team is much more likely to see the advantage of having a strong compliance approach if they understand the risk to profitability at the outset. Likewise, a compliance team with a deep understanding of the business mission and the potential opportunity, will be focused on devising a way to advance the mission and profitability without significant risk to the organization.

2. Communicate risk in terms of the potential impact on profitability.

Compliance teams will have a far more significant impact if seen as a partner rather than a hurdle to be overcome on the path to a new market opportunity. In addition to being part of the conversation from the outset, the compliance function should focus on communicating potential risks in terms of how much profit will be lost, not just potential risk. When the business team understands the costs of violating corporate compliance policies and procedures, and the global regulations that inform them, ethical norms will inform business strategy.

3. Reward ethical behavior! Don’t just punish misconduct.

To have the greatest influence on individual behavior, the system must reward ethical behavior and penalize non-compliant behavior. This means tying bonuses to a commitment to long-term success, not just quick but questionable wins. Many organizations focus on revenue over profitability, particularly in compensation structures. This short term focus on revenue unintentionally creates an environment that rewards unethical behaviors that pump up revenue generation while undermining profitability. That inevitably, if unintentionally, encourages corrupt, unethical behavior. Rewarding truly profitable ventures rewards ethical behavior.