To have a “jaundiced view” of something implies a perspective that is tinged with distrust, prejudice, or negativity, often shaped by prior adverse experiences. In most cases, this leads one to focus disproportionately on negative aspects. In the context of compliance risk, this jaundiced view can arise from business stakeholders’ reluctance to accept compliance programs or their misperceptions produced by encounters with inadequately managed past compliance initiatives. This perception may be further exacerbated when compliance officers and senior management fail to effectively communicate and promote the compliance program as a vital enabler of business objectives.
Recognizing that individuals’ experiences with compliance programs significantly influence their perceptions of compliance risk is, therefore, pertinent and to be taken seriously. A common error among compliance professionals is prioritizing compliance risk over other critical business needs or risks, thereby misaligning the compliance function with the organization’s overall strategy. Compliance officers must understand that compliance risk, while significant, is not the sole danger facing the business. Addressing compliance risk at the expense of exposing the organization to greater litigation risk or breaches of contract does not effectively resolve underlying challenges. Rather, one of compliance’s fundamental roles is to promote business assurance and maintain value; if compliance measures that are aimed at mitigating a risk inadvertently trigger another, this diminishes overall risk management effectiveness. An insular focus by compliance officers, neglecting the interconnectedness of various risks and responsibilities, can foster a skewed perception of compliance risk, reinforcing the jaundiced view.
The following factors contribute to fostering a jaundiced view of compliance risk:
1. Distrust Among Stakeholders: There exists a pervasive skepticism among employees and other stakeholders regarding top management’s authentic commitment to the compliance program. This disconnect is often noticeable when the declarations made by leadership are not substantiated by aligned actions and behaviors, leading to a perception of insincerity.
2. Misapplication of Compliance Programs: When compliance initiatives are misused to undermine or negatively impact the interests of employees or stakeholders, it creates a sense of injustice and a perception of inequity. This perception can severely damage trust in the compliance function.
3. Prioritization of Business Interests Over Compliance: A recurring theme is the tendency for business interests to overshadow compliance objectives. This is evident when compliance policies are routinely bypassed through waivers, derogations, or informal agreements, fostering an environment where compliance is viewed as secondary to profit-driven goals.
4. Subjectivity in Compliance Enforcement: Compliance enforcement that lacks objectivity and consistency, often relying on the compliance officer’s judgment or interpretation, can lead to perceptions of bias and inequity. This is particularly problematic in systems that are not firmly rooted in established rules or standards.
5. Ineffective Communication of Compliance Policies: A significant barrier to compliance effectiveness is the inadequate communication of policies and procedures. Ambiguity, insufficient awareness, and unclear messaging can lead to misunderstanding and noncompliance, further entrenching a negative perception of the compliance framework.
By addressing these factors comprehensively, organizations can work towards dispelling the jaundiced view of compliance risk, fostering a healthier perception that sees compliance not as an obstacle but as a crucial partner in achieving business success.
