Active Listening as part of Governance and Risk Assessment

March 25, 2024

In our February blog post with Arctic Intelligence, we discussed the importance of listening.  See "Listening - A Critical Skill for Compliance, Corporate Governance, Risk Assessment and Risk Mitigation".

In what ways is active listening demonstrated within a well run organization having a sound culture of compliance?

Active listening is a key component of a well-run organization with a sound culture of compliance. It manifests in various ways, shaping how the organization operates, engages with its stakeholders, and fosters an environment of trust and transparency. Here are several ways active listening is demonstrated within such organizations:

1. Leadership Engagement

• Open-Door Policies: Executives and managers adopt open-door policies, encouraging employees at all levels to share ideas, concerns, and feedback without fear of retaliation.
• Regular Town Halls and Meetings: Leadership hosts frequent forums and meetings where employees can voice concerns, ask questions, and provide feedback on organizational practices, including compliance matters.  Minutes are maintained and, when decisions and actions are appropriate, team members are held accountable.

2. Stakeholder Involvement

• Customer Feedback Mechanisms: There are established channels for customers to provide feedback on products or services, including any compliance-related issues they observe or experience.
• Supplier and Partner Engagement: The organization actively listens to its suppliers and partners, incorporating their insights into operation and compliance strategies when appropriate.

3. Employee Communication Channels

• Anonymous Reporting Systems: Effective use of hotlines or online platforms that allow employees to report unethical behavior or compliance violations anonymously.
• Feedback Loops: Mechanisms are in place to ensure that feedback received through various channels is acknowledged, acted upon, and communicated back to the reporting individual, where appropriate, to close the loop.

4. Training and Development

• Interactive Compliance Training: Rather than one-way lectures, compliance training includes interactive elements such as Q&A sessions, workshops, and role-playing exercises that encourage active participation and listening.
• Continuous Learning: Feedback from training sessions is used to adapt and improve future training, ensuring it remains relevant and effective.

5. Performance Management and Recognition

• Incorporation into Performance Reviews: Listening and communication skills, particularly regarding compliance matters, are part of the criteria in performance evaluations.
• Recognition Programs: Employees who demonstrate exemplary active listening skills, especially those who contribute to identifying and solving compliance issues, are recognized and rewarded.

6. Crisis Management and Response

• Stakeholder Engagement during Crises: In times of crisis, the organization prioritizes open lines of communication with all stakeholders, actively listening to concerns and responding appropriately to maintain trust and transparency.
• Post-Crisis Reviews: After a crisis, including compliance breaches, organizations conduct thorough reviews that involve listening to affected parties to understand what went wrong and how similar incidents can be prevented in the future.

7. Advisory and Feedback Bodies

• Compliance Committees: These committees, often comprising employees from various levels and functions, meet regularly to discuss compliance issues, trends, and strategies, ensuring a broad range of perspectives are heard and considered.
• Regular Surveys: Conducting regular surveys on organizational culture, employee satisfaction, and compliance to gather broad-based feedback from employees.

In essence, a well-run organization with a sound culture of compliance integrates active listening into every facet of its operations. This approach not only helps in identifying and mitigating risks early but also fosters an environment where compliance is viewed as a collective responsibility, supported by trust, transparency, and open communication.

Partnering for Success

Arctic Intelligence provides cutting-edge technology that empowers financial institutions to conduct effective and efficient risk assessments. Their platform streamlines processes, supports compliance with regulatory requirements, and enables ongoing risk management. MSB Compliance Inc. is proud to partner with Arctic Intelligence to bring this innovative solution to the U.S. MSB and fintech market.  

Together, we are committed to helping financial institutions build a strong foundation for success – a foundation built on effective risk assessment and driven by an unwavering commitment to compliance.