In simple terms, compliance indicators are metrics used to measure the effectiveness of our compliance programs. They help us monitor, evaluate, and continuously improve our compliance practices, ensuring our companies adhere to laws, regulations, or standards (whether internal or external). Thus, indicators become a vital part of our management system and the implementation of a robust compliance program—one that truly helps mitigate risks, protect against legal penalties, and enhance the trust of customers, investors, and other stakeholders.
Considering that Compliance is essential for the integrity, reputation, and long-term success of any organization, the creation and implementation of compliance indicators is a managerial necessity that will yield good results, assist in management, and contribute to making our companies strong in the market and highly sustainable.
Therefore, in today’s content, we have selected 3 indicators that we consider essential for your compliance management system. Obviously, they are not the only necessary ones, but we aim to focus on an integrity program, both to guide today’s content and because it is a less discussed topic in the market, even though it is vital for companies and society as a whole.
To make the text more didactic, we created some acronyms to abbreviate the mentioned indicators (IDE, TRTDRE, and NSSRPI). These are not official names and were created only to facilitate their citation in certain parts of the text. Similarly, the names of the indicators should be personalized to improve acceptance within your company. With that said, let’s get started!
1. Ethics Reporting Index (ERI)
Having a functional reporting channel is one of the fundamental aspects of any integrity program. Equally important is having indicators that measure the overall effectiveness of this channel.
When it comes to the integrity program, one of the most important compliance indicators is the “Ethics Reporting Index.” A very high number of ethics-related reports can raise an alert that could mean basically two things:
- A communication error regarding the integrity program as a whole, or;
- A serious ethical risk within your organization.
Measuring this index, whether monthly, quarterly, or semi-annually (or according to your company’s needs), will provide strong support for a better understanding of your compliance management system. Likewise, understanding how your company is performing on this index will help in making important decisions regarding your company’s culture and how these reports are handled.
An interesting tip, if you want to create a more robust and effective reporting channel, is the implementation of ISO 37002 Whistleblowing Management System. This standard will provide your organization with guidance to better manage reports, allowing the creation of a safe and confidential channel, promoting integrity and transparency.
2. Response Time for Handling Ethics-Related Reports (RTHER)
While receiving reports with greater confidentiality and security is important, handling them is even more crucial. Otherwise, it would be like discovering an illness and not taking the medicine to cure it.
Therefore, it is important to monitor the time the company takes to respond to and handle the reports related to ethics. By monitoring the ERI in conjunction with the response time of these reports, we will have important information for decision-making and evaluating the integrity program.
Furthermore, we know that the severity of reports and handling can vary and may include special cases, which should also be taken into account. Critical cases can be grouped or treated separately, creating a specific and relevant indicator format for your organizational context.
3. Stakeholder Satisfaction Level Regarding the Integrity Program (SSLIP)
The third, and equally important, compliance indicator that we consider fundamental for an integrity program is the one that measures stakeholder satisfaction.
Besides helping to ensure compliance with laws and regulations, a good integrity program needs to help improve the company’s reputation, ensuring it in the long term. Reputation, in turn, is always the perception stakeholders have of the company. Thus, a good management system includes compliance indicators (metrics) that help evaluate stakeholders’ satisfaction with the company’s ethics.
It is important to note that this indicator cannot be analyzed in isolation; it will be the result of various evaluated metrics (possibly including the ERI and RTHER). The key is to understand whether stakeholders truly see a solid and effective integrity program or just a set of documents that are merely for show.
Compliance Indicators: The Key to Long-Term Sustainability and Reputation
Several ISO standards, such as 37001, 37301, and the previously mentioned 37002, can help implement good practices related to the integrity program and, of course, compliance as a whole. This will help you and your company think of new indicators and better understand how management has been acting and improving things.
However, cross-referencing the three indicators mentioned here (ERI, RTHER, and SSLIP) will provide a robust view of the maturity of your integrity program from the perspective of your stakeholders. They will lead to more in-depth analyses of your reporting channel and other fundamental factors, enabling the creation of improvement actions and also facilitating more well-founded and assertive decision-making. Analyzing them may even reveal the need to create other compliance indicators.
Finally, always remember that maintaining good performance indicators (whether related to compliance or not) is fundamental to your company’s success. Therefore, commit to monitoring and improving the pillars of your management, ensuring your company remains competitive and ethical. Be the leader who drives your processes towards a more prosperous and ethical future, making your company profitable and contributing to a stronger society!
