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Focus on
Organizational Compliance Culture
Organizational
compliance culture:
What message is
your board and
senior management
sending
By Jeff Sinaiko
Editor’s note: Jeff Sinaiko is president of Sinaiko
Healthcare Consulting, one of the nation’s leading
independent healthcare management consulting
firms. He works with healthcare organizations
nationwide on a diverse range of compliance issues.
For more information, please e-mail
jeff@sinaikohc.com or go to www.sinaikohc.com.
This is not a test of the emergency
broadcast system (it worked just fine
in our recent earthquake, you will all
be happy to know). But, I do interrupt this
series of articles on lab compliance and auditing
to address an issue that has been weighing
heavily on my mind - compliance culture and
its determinant impact on whether an organization
can achieve compliance effectiveness.
In the July issue of Compliance Today, Scott
Kelly wrote very capably on the subject of
what compliance officers can do to maintain
a culture of compliance in their organizations.
I agree that compliance officers have
a critical role in ensuring that a compliance
program is executed, and that compliance
culture must be fostered and reinforced by
what occurs at the operating level every day.
In my column this month, I want to build
on that subject by addressing the issue of
creating a culture of compliance, which
can not be done by the compliance officers
among us, and which experience indicates is
the source of many organizations’ ongoing
struggles with compliance.
Creating a compliance culture must have at
its base the focus, example, sponsorship, and
stewardship of the board and the most senior
level executives within any organization. A
clear message must be sent to every member
of an organization through the tangible and
identifiable actions of leadership: doing the
right thing will inform all business conducted
in the organization’s name.
The compliance community focuses heavily
on the tactical – the what, how, and when
to do the myriad of tasks required to achieve
compliance effectiveness (present company
included). I’ve come to believe, however,
that all the specific activity executed under
the aegis of the compliance program can not
truly generate a compliant organization and
a culture of compliance without this serious
commitment and example set by the board
and senior management.
Any organization ultimately reflects such
examples and the priorities set, not just
through words, but most of all, through
actions. If the organization’s board and most
senior management fail to set this example
through their own actions, the message will
be clear, regardless of anything the Compliance
Office and officer do.
So, what specifically can be done on this
level First, determine what message is sent
to the organization via the board and senior
management in this regard. Ask yourself, for
example, what your organization would do
when a serious compliance issue is identified:
n What is the priority If making budget,
protecting a given physician relationship
and/or limiting the cost of addressing
the issue take precedence over diligently
addressing the issue as the organization’s
compliance officer or advisors may recommend,
what message does that send
n If the business people are allowed to
establish the priorities for how the issue is
addressed, perhaps even contrary to what
the compliance officer knows to be the
right way to address it, what message does
that send
n If the board and CEO (or other appropriate
member of senior management) are not
asking questions to assure themselves it is
being handled appropriately, and are not
involved in any of the discussions of resolution,
how seriously is the organization really
taking its compliance obligations
I am not unrealistic as to economic mandates.
We spend a huge amount of our time
assisting clients to focus on and improve
the critical elements of revenue capture and
bottom-line performance. I am not suggesting
that the organization has to spend money
indiscriminately in order to be compliant,
or that due diligence can not be applied in
evaluating options. But, at the end of the day,
the message sent by example must reflect the
foundational principle that doing the right
thing is the organization’s top priority. This
is ultimately the only way to truly build a
culture of compliance and, ultimately, to have
an effective compliance program.
There are times when these various priorities
may be at odds. What choice will your
organization make
Some concrete measures can be used as a basic
evaluation of the board’s role in compliance.
In 2004, the Federal Sentencing Guidelines
(the source of the definition of current compliance
programs) were revised to include
specific functions of the board as a de facto
eighth element of compliance programs. The
Continued on page 22
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October 2008