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Compliance Monitoring Challenged by Global Pandemic

COVID-19 has disrupted almost all aspects of our lives. The inability of outside monitoring organizations, that provide assessment of employee ethical behavior has been critically disrupted. Deloitte defines a monitoring program as "the ongoing surveillance, review, and analysis of key business performance and risk indicators that allows the organization to identify potential compliance violations."

Today, monitoring may be conducted onsite or virtually. Onsite monitoring involves going to companies and accessing sensitive data to ensure compliance with the relevant legal and regulatory guidance for the industry. Trying to access and analyze an organizational culture virtually presents challenges and with many non-essential employees working from home, some aspects of monitoring have become extremely difficult. Many monitoring organizations are independent and operate in the accounting, legal, and environmental space. Quite often, corporate monitors are compliance experts appointed by regulators in conjunction with a related legal/regulatory settlement. Corporate culture is often the key barometer that monitors are observing to determine whether a company is at risk of repeat non-compliance. According to the president of the International Association of Independent Corporate Monitors, "Monitorships that are currently in process in many respects are being slowed down to almost a complete halt."

Global privacy laws have limited data sharing and lead to more onsite monitoring visitations. In addition, due to stay at home mandates and travel restrictions, virtual meetings are our 'new normal.' However, in this case, it's difficult to conduct assessments virtually. Determining how seriously employees are taking the requirements and how honestly they are answering questions is more difficult to assess in the virtual environment. One monitor stated that in an onsite visit, it was noted that the legal and compliance team had been moved to another city. The monitor noted, "That spoke volumes for how much access legal and compliance had to what was really going on in the day-to-day office."

As with evolutions in behavior and coping mechanisms, the legal and regulatory community will need to adapt to find ways to asses ethics, legal, and compliance management.

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