As professionals, we are regularly required to ‘sign off’ on something. This may be in the context of our role in an organisation (e.g. certifying our business’ compliance with a data privacy regulation), or it may be in an individual capacity (e.g. certifying our compliance with the Code of Conduct in our annual Actuaries Institute membership renewal).
In either situation, we can all appreciate the temptation to view the sign off as routine and fail to apply much thought to the process. As we start to navigate our way into the new year, this may be a good time to reflect on the risks associated with this mentality and commit to an elevated mindset in 2022.
We appreciate the contributing problems here:
- Most of us are time-poor and can only allocate limited thinking time to ‘compliance tasks’.
- We love problem-solving and exploring the complexity and the compliance tasks don’t readily fit with our model of a great day at work.
- We might view the task in isolation rather than as an important part of a larger framework or a valuable process.
- We may interpret the task through the restricted lens of an individual rather than in the context of our organisation or our contribution to society.
At the same time, we may not appreciate the serious risks involved with taking a narrow, procedural approach. What are the potential consequences if we don’t bring our whole self to the task?
Let’s think about the sign offs related to our role in an organisation. What might happen if we don’t know or don’t care about the scenario that we are certifying? Consider, for example, the anti-money laundering legislation and the attestations required in a large bank. A narrow, perfunctory approval ignores the important purpose of the law. The reality is that our society is dependent on identifying money laundering to prevent financial transactions with criminal connections. If the bank employees fail their important task, then they may be seen as facilitators of criminal behaviour, as we saw with the recent Westpac scandal. It is usually a lot more damaging than the financial impact of the fine. Who wants to be accused of supporting child exploitation?
Let’s think about the sign offs related to our individual responsibilities. Most of us are required to remain up to date with legislation and ‘in house training’ provides a convenient means of learning about our personal responsibility (e.g. discrimination, bullying, harassment). What if we don’t see this as a genuine learning opportunity? We may inadvertently fall foul of the law through our ignorance with consequent damage to our individual reputation. What if “everyone does that”? The damage may manifest as financial and reputational damage to the organisation as KPMG recently experienced. It may also manifest in a fine, an Actuaries Institute disciplinary proceeding or even criminal charges for individuals.
How can we address the problems and limit the risks of ‘box-ticking’? Perhaps the solution lies in ‘bringing our whole self’ to the task.
One helpful step might be to understand how the specific task fits in with the package of activities and responsibilities that constitute our role. Consider the example of undertaking CPD. The narrow focus is a requirement to complete 100 points per annum which doesn’t seem very inspiring. The holistic perspective is that ongoing learning is a key element of being a professional – and an element that we should respect and enjoy. Even if it is a refresher (e.g. re-reading the Code of Conduct) or, as another example, retaking your organisation’s online training on the Trade Practices Act, things are changing so rapidly that you will probably benefit from new insights in the light of change.
Another helpful step is being curious and inquisitive. If you are not sure about the purpose of a particular sign off, then ask someone. Understanding the context is not only important for providing the correct approval but may enhance the sense of the value of our contribution. This may also improve the quality of the outcome for you and other stakeholders.
Putting those two steps together, we suggest that people who are undertaking the task with a clear reason will put a higher store on both the activity and the result. They will probably enjoy the task more as well. Those people who are good at this may also benefit from challenging their subconscious bias through their full engagement.
For actuaries who have responsibility for designing approval processes, you have an important role in ensuring that the process supports such engagement. Key elements to the process will be:
- a clear communication of the purpose and the context of the sign off;
- an outline of the benefits of undertaking the task, both for the signer and for others; and
- an activity which, by nature, encourages critical thinking
Let’s be responsible professionals when it comes to our commitment to compliance.
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