Your compass for the next 12 months
The E&C and GRC industries will experience the most disruption in their short history in 2018. As organizations strain to keep pace with the cultural and regulatory impact on risk management, ethics and compliance, and corporate culture this year, we will see a reactive and proactive evolution in the programs adopted to meet these new challenges and opportunities.
Reactively, organizations will acknowledge the need to evolve how they measure the effectiveness of their ethics, compliance, and risk programs. Proactively, we anticipate significant regulatory, technological, and cultural trends that will force organizations to adapt and adjust how they plan to affect and model behavior change across all organizational levels.
Increased awareness around sexual misconduct will undeniably force organizations to look at their cultures, how they handle whistleblowing claims, and how they govern employees' social media use. The prominence and rising value of Bitcoin and other cryptocurrencies, as well as the looming presence of the General Data Protection Regulation (GDPR) in May, will change how ethics and compliance departments educate their colleagues on key risk areas.
Here are SAI Global's ethics and compliance, corporate culture, and risk management trends & predictions for 2018:
- Ethics and compliance programs will make a significant leap in user experience and user interface. Programs will continue to evolve into more personalized experiences for employees and adopt elements from mainstream technology, like curation and playlists similar to what we see in Netflix, Spotify, and Apple Music.
- Whistleblowers in organizations around the world will feel empowered to speak up more than ever throughout 2018, knowing they have support from the global community and media. Companies will need to react to this trend by putting in place protocols and processes to handle accusations at a much larger scale than ever before, while also evaluating if their employees trust these processes enough to come forward and speak up without the fear of retaliation.
- Increasing dialogue relating to sexual harassment and misconduct will force organizations to look beyond training programs on these topics to a more comprehensive and culture-centric approach to changing behavior.
- In light of the attention on unethical corporate behavior and the growing importance of culture and values as a differentiator, members of the C-suite will spend the next twelve months establishing themselves as ethical leaders and role models for their industry peers.
- Organizations will change their definition of 'program effectiveness' and look to developing a deeper understanding of culture and behavior. A more accurate, holistic and universal way of measuring behavior, culture, risk, and compliance in organizations will seek to answer the question: is what we're doing actually working; and how can we change it if it's not?
- The effects of the EU's GDPR will reach far and wide across all industries and geographies. This new regulation will be especially influential for Facebook, Twitter, and other prolific, global media companies that rely so much on user data for customized experiences and targeted advertising.
- The first formal Bitcoin regulation will be passed in 2018, but not before at least one prominent news story of high-stakes cryptocurrency-fueled bribery or corruption makes major headlines. Organizations will begin to incorporate training around Bitcoin and other cryptocurrencies into their anti-money laundering (AML) and anti-bribery and anti-corruption (ABAC) ethics and compliance programs.
- This will be the year of a unified approach to risk. We'll see fundamental changes to the design and intent of internal governance structures within organizations. Deeper investment into resources and technology will help create a connected view of risk across all departments, such as cloud-based risk management solutions.
The urgency and necessity of risk and compliance functions working together, and the role those functions play in the C-suite, will force movement in both human and technology-driven innovation to succeed in today's environment. Technology has changed our behavior and will continue to push organizations to leverage new tools to help drive and measure outcomes, both cultural and regulatory.
We'll face these challenges together and will share more of our thoughts on these topics in the coming weeks.
To read more on the proactive and reactive evolution facing our industry, download 'The Future of Ethics, Compliance, Risk, and Corporate Culture: 8 Trends and Predictions for 2018' from SAI Global.