Compliance +

Spent the day at Canary Wharf in London. My, my the place has changed. When I was last there the sense was one of emptiness and lonliness (shows how long ago that was), but today the place was buzzing. Particularly since there were lots of smokers on the pavement. In its earliest days of course this development by the Reichmann brothers had its problems and the media was particularly unfriendly. But I distinctly remember remarking at the time that I could see no reason why it would not be an outstanding success. And so time has proved me right.

On the way back on the train I was pondering the desire of many, many blue-chips to not achieve ‘just compliance’ but to be seen and to act at a level way above ‘minimum standards’. What struck me is that this conflates compliance with business performance. It assumes that there is a direct relation between ‘compliance +’ and exceptional performance. That compliance is a causal factor in performance.

Few, if any, seem to question this underlying assumption. Gilt edged compliance is seen as a good thing, whether is positively impacts business objectives or not.

What I think is needed is a smarter approach. An understanding of what legislative requirements are a contributory factor in improved performance and to target these whilst allowing minimum compliance standards to persist in other areas. All regulatory demands cannot be created equal and cannot all be equally important in driving performance. But not easy.

Therefore, corporates take note. Stop seeing compliance as a performance opportunity. Instead be selective.

Update: Scott Mitchell over at OCEG makes the simple point that the “law does not demand anything beyond effectiveness”, but that a compliance programs performance is the “degree to which it delivers business outcomes beyond legal and regulatory requirements”. Exactly.