Behavioural compliance: Understanding how to shape a compliant culture
03 February 2021
Our previous blog started a conversation about rethinking organisational approaches to compliance, and the importance of creating and maintaining a culture of compliance.
Corporate governance is increasingly moving away from traditional approaches and dipping into the cognitive and behavioural compliance fields. Some regulators are already starting to incorporate their learnings, such as the financial service industry's introduction of the Senior Managers and Certification Regime (SMCR). Organisations should expect more and more regulations to reflect this approach, causing tick box compliance to be insufficient in meeting minimum standards.
Understanding the behavioural factors that are at play in creating a culture of compliance is the first step to preparedness. This means that even with regulatory restraints becoming increasingly demanding, organisations will be able to ensure that the correct resources and tools are in place to embed compliance practices into their everyday work processes.
What drives human behaviour?
Decades of research into how people behave in the workplace has revealed useful insights into why people sometimes do not comply, despite knowing they are acting unethically.
Significantly, the research suggests that when people break rules, more often than not it is because there are internal incentives (generally unconscious ones) that are stronger than the external disincentive of a penalty.
Understanding the behavioural biases that occur means organisations can be better equipped to ‘de-bias’ and promote positive cultures of compliance. We take a deeper look at different examples of behavioural biases in our free Behavioural Science & Compliance e-book, which make it clear that simply telling staff to change their approach will not be successful without first understanding the barriers and motivators behind the behaviours.
Behavioural barriers to compliance
A useful starting point for organisations is to consider the behavioural barriers to compliance and consider how organisations can simplify these so it's as easy as possible for employees to comply. Extensive behavioural research has been conducted into compliance regimes and barriers to behavioural change; for example, Weaver identified the following domains acting as barriers to compliant behaviour:
|Perceived incentives to comply||Willingness to comply||Capacity to comply|
|Incentives||Information & cognition problems||Lack of awareness & understanding|
|Sanctions||Attitude & beliefs – e.g. inconvenience||Resource & autonomy problems|
By identifying organisational elements that may act as barriers to compliance, businesses can start to address how these may be mitigated. For example, understanding that non-compliance stems from a lack of awareness may encourage a greater emphasis on training and e-learning.
A delicate balance for organisations to make when addressing these barriers is to encourage compliance without stifling self-regulation. By implementing management systems that engage employees and activate their self-regulation, organisations are able to facilitate the single most effective and measurable driver of compliance behaviour. What’s more, this approach works when no one is looking.
The solution: Technology
In today's world of digital transformation, technology provides an unrivalled opportunity to create and sustain compliance throughout any organisation. From fail-safe devices in manufacturing to increased use of AI and robotics, we see a variety of ways the advanced capabilities of technology can support businesses in their ongoing plight to comply.
Software is another great tool for fostering self-regulation among employees. It functions efficiently as something people partner with to make a task easier and more effective overall, and crucially it facilitates all of the 6 core aspects crucial to creating a compliance culture: awareness, accountability, education, motivation, ownership and transparency.
Not only can technology be a key player in kick-starting a culture of compliance by systematically measuring and analysing practices and behaviours, it can also provide the route to achieve these.
It manages and eases aspects such as complying with regulations, data collection and report creation, freeing up time for managers to handle the people side of compliance.
Understanding the role of technology feeds in to understanding your choice of software and what it should achieve for your organisation: it should act as a support system and facilitator of the key behavioural aspects of compliance.
Our infographic takes a closer look at the core behavioural factors that facilitate and sustain cultures of compliance by overcoming barriers and utilising technology effectively.
For a comprehensive examination of the role technology plays in supporting behavioural compliance, and analysis of how this has been applied in practice download our free e-book.