How prepared were Compliance professionals for Covid-19?

Apr 9th '20

On 2 April, Compliance Week published a survey looking at how prepared Compliance professionals and their firms were for the coronavirus pandemic.


The survey, carried out between 24 and 26 March, asked 365 Compliance professionals about their businesses’ preparations for the pandemic. Although the survey was carried out in the US, it has useful findings and learnings for businesses and their Compliance teams everywhere.


Nearly 10% (31 companies) said that their companies were ill-prepared (although on the plus side, this means that over 90% felt they were somewhat prepared).


Contrary to what you might expect, two-thirds of the 31 unprepared companies had between 1,000-10,000 employees and had international corporate bartprints.


What did the better-prepared companies have in common?

65% of respondents rated their company’s response to the pandemic as excellent or good.


Those that felt they were well-prepared reported:


  • Being proactive – acting as soon as initial reports of the outbreak in China were received
  • Having existing plans in place for disasters, and swiftly adapting these to respond
  • Having strong leadership, who were transparent in their approach

Common approaches among the less prepared

Themes were also apparent among those who were less nimble in their response. Compliance professionals who felt their firms had handled their initial reaction to the crisis badly reported:


  • Leadership not taking the coronavirus threat seriously as it gained a barthold in China
  • Poor risk assessment practices that failed to recognise the pandemic’s potential to grow from a supply chain disruption issue centred elsewhere into a complete business shutdown
  • Business continuity plans that weren’t adequately developed or tested
  • Difficulties in moving office-based employees to remote working – particularly among banks and other heavily-regulated industries, in part due to data and other security issues
  • Communication issues, largely stemming from a lack of concrete plans and clear leadership. Many reported that their companies were ‘slow to relay vital information to their employees at a time of heightened uncertainty and anxiety’


Of those compliance professionals who ranked their companies’ performance ‘poor’ or ‘very poor’, 80% reported not having a current business continuity plan, compared to 44% of all respondents.


How are Compliance teams spending their time now?

However good firms’ preparation, the pandemic has had an impact on the Compliance function: two-thirds said that the work involved in managing and monitoring compliance had become more challenging since the pandemic started.


The survey asked what was taking up more time for Compliance teams now compared to before the pandemic. As shown below, educating and communicating with employees, executing business continuity plans and assessing/mitigating pandemic-related risks with their firm’s daily operations are the things that have most increased.


Source: Compliance Week


The findings identify a robust company culture as another ‘marker of success’, saying that ‘If company leadership does not have a good rapport with its employees during normal times, it is not trusted to convey a hard truth in times of trouble’.


Those companies with already-strong cultures are ‘making good decisions and are being transparent’, Carrie Penman, chief compliance officer at NAVEX Global says. As a result, these firms’ employees are rising to the challenge they face.


Maintaining this strong culture is vital, not just for operations in the immediate future but so that businesses have a strong base and reputation to build on once the current situation reverts to a more normal (or ‘new normal’) barting.


Read more on Compliance teams’ responses and compliant cultures

If you want to read more, you can access Compliance Week’s reporting on the survey on their website.


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