Value proposition

Gartner Says Compliance Reporting Needs a Value Proposition

According to Gartner, compliance reporting needs a value proposition.

About half of employees actually believe that reporting is the right thing to do.

According to a survey conducted by Gartner, Inc.

The Gartner survey of 901 employees in April showed that in a new norm for reporting misconduct, which has been lower since the pandemic, it is important for compliance officers to understand what drives employees to report misconduct (see Figure 1).

“It may surprise many compliance managers to know that only 54% of employees believe that reporting misconduct is the right thing to do,” said chris audet, senior director, research within the Gartner Legal, Risk & Compliance practice. “Employees understand that’s what they’re supposed to do but, in many cases, they’re not sure it’ll work well for them or their teams, so they choose to keep quiet.”

Figure 1: Impact of beliefs on the likelihood of reporting misconduct

Source: Gartner (August 2022)

“Compliance managers typically focus on trust in reporting and anti-retaliation policies,” Audet said. “But often highlighting the ways a speaking culture can benefit individual employees or their teams is overlooked.” and it is the most important factor driving the decision to report.

Misconduct Reporting Factors

Compliance often assumes that employees report misconduct because it’s simply the right thing to do, and leaders tend to play on this point by emphasizing how much reporting misconduct helps the business. Yet about half of employees take a more pragmatic, rather than idealistic, approach to reporting and only pursue it if they see no harm or even personal benefit to themselves.

“Compliance managers also need to incentivize pragmatists to report,” Audet said. “Instead of assuming that all employees will be constrained by the moral value of reporting, companies need to build a value proposition for reporting. This is a change from what many compliance officers have pointed out in the past.

The value proposition – what will drive an employee’s personal responsibility to report – has three fundamental elements: trust, security and benefits. Trust and safety in reporting are areas that are regularly addressed by compliance already through things like anti-retaliation policies. But very rarely do compliance teams create or emphasize a personal benefit for the individual registrant or their teams.

The current situation is that employees have a very poor perception that reporting is beneficial to them. Only a third think reporting will lead to a better work environment or improve their team’s morale or performance. Just over one in five employees believe reporting will be good for their career.

“Addressing the reporting advantage is a big untapped opportunity for compliance leaders,” said Audet. “It’s the most important factor that motivates a sense of personal responsibility to report, but employee perceptions in this area are generally negative. This is rarely an important part of compliance teams’ speaking messages.

This content is adapted from a Gartner Executive Retreat for Chief Compliance Officers held at May 2022. Gartner clients can register for future events on the same topic and find details of all executive retreats available to them here.

Gartner customers can also learn more at: Encouraging Reporting in a hybrid world: Building a reporting value proposition. Non-customers can watch the webinar: Develop an Action Plan to Respond to the Latest Misconduct Trends.

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Media Contacts

Rob van der Meulen

Gartner

[email protected]