Compliance and the COVID-19 Pandemic€¦ · Survey respondents expressed signiﬁcant concerns about an increased risk of compliance failures as a result of the pandemic. The assessment

Compliance and the COVID-19 Pandemic

June 2020

A survey by the Society of Corporate Compliance and Ethics & Health Care Compliance Association

corporatecompliance.org • hcca-info.org

corporatecompliance.org • hcca-info.org 1


IntroductionThe COVID-19 pandemic has upended countless organizations and how people work. Supply chains have been disrupted, operations have slowed or stopped, and large segments of the workforce have turned their homes into offices.

Compliance programs have also felt the impact. Teams have had to adjust the way they work to ensure that regulatory mandates are still met—all while staying on top of the myriad regulation changes meant to address the pandemic.

To assess the impact of the pandemic on compliance programs, the Society of Corporate Compliance and Ethics & Health Care Compliance Association fielded a survey in May 2020. More than 300 responses were received.

Executive SummaryCompliance professionals have significantly changed their work habits as a result of the pandemic. They have had to adjust to working remotely, and they report that the transition has gone well. Despite the change, interactions with other departments in the organization have stayed steady or increased, reducing fears that compliance might be sidelined.

At the same time, two worrying signs have emerged. Budgets for many are already under pressure, and a significant number of respondents reported an increase in inquiries to the compliance team.



Key FindingsLike so many other professions, compliance has seen a dramatic shift to remote work. Although 78% of respondents reported that they were now exclusively or mostly working remotely, not every industry was similarly affected. In healthcare, 37% of respondents reported that they were exclusively working remotely; but outside of healthcare the number was significantly higher at 59%.

CURRENT WORK LOCATION

Society of Corporate Compliance and Ethics • corporatecompliance.org

On balance, compliance professionals reported that the transi4on in working environments had gone be9er than expected.


0%

15%

30%

45%

60%

Exclusively working from the office

Mostly working from the office

Mostly working remotely

Exclusively working remotely

59%

25%

6%9%

37%33%

15%15%

49%

29%

10%12%

Overall Healthcare Non-Healthcare

0%

13%

25%

38%

50%

Much better than expected

Somewhat better than expected

About as expected

Somewhat worse than expected

Much worse than expected

1%2%

33%29%

35%

1%5%

48%

22%25%

1%3%

40%

26%30%




On balance, compliance professionals reported that the transition in working environments had gone better than expected. Overall, 40% reported the transition had gone as expected. Another 26% reported it going somewhat better than expected, and 30% reported that it had gone much better than expected. Only 4% expressed the view that the transition had gone worse than expected. Once again, there were differences among industries: 47% of healthcare respondents said the transition had gone much or somewhat better than expected, and 64% of those outside of healthcare gave the same responses.

TRANSITION IN WORK LOCATION


On balance, compliance professionals reported that the transi4on in working environments had gone be9er than expected.


0%

15%

30%

45%

60%

Exclusively working from the office

Mostly working from the office

Mostly working remotely

Exclusively working remotely

59%

25%

6%9%

37%33%

15%15%

49%

29%

10%12%


0%

13%

25%

38%

50%

Much better than expected

Somewhat better than expected

About as expected

Somewhat worse than expected

Much worse than expected

1%2%

33%29%

35%

1%5%

48%

22%25%

1%3%

40%

26%30%




The pandemic has seen a reported increase in the number of inquiries to the compliance team. Across industries, 36% reported that there has been a somewhat or large increase in inquiries, compared to just 27% showing a decrease. Notably, the healthcare respondents were much more likely to report an increase (42%) than those outside of healthcare (30%).

CHANGE IN NUMBER OF COMPLIANCE INQUIRIES

The pandemic has seen a reported increase in the number of inquiries to the compliance team.


In general, the pandemic has not hurt compliance’s collabora4on with other departments, In somecases, interac4on has increased. 47% reported increased collabora3on with leadership, 43% reported an increase with human resources, and 37% reported the same for their rela3onship with legal. On the nega3ve side, 18% reported decreased collabora3on with internal audit.


0%

13%

25%

38%

50%

A large increase Somewhat of an increase

About the same number

Somewhat of a decrease

A large decrease

3%

22%

45%

22%

8%6%

23%

29%27%

15%

4%

23%

38%

24%

11%


0%

20%

40%

60%

80%

Legal Human Resources

Internal Audit

Business Unit (including patient

care team)

Leadership The Board

13%13%14%18%

8%5%

72%

41%

50%

68%

49%

59%

16%

47%

36%

15%

43%37%

Increase Stay the Same Decrease



In general, the pandemic has not hurt compliance’s collaboration with other departments. In some cases, interaction has increased. 47% reported increased collaboration with leadership, 43% reported an increase with human resources, and 37% reported the same for their relationship with legal. On the negative side, 18% reported decreased collaboration with internal audit.

COLLABORATION RATES

The pandemic has seen a reported increase in the number of inquiries to the compliance team.


In general, the pandemic has not hurt compliance’s collabora4on with other departments, In somecases, interac4on has increased. 47% reported increased collabora3on with leadership, 43% reported an increase with human resources, and 37% reported the same for their rela3onship with legal. On the nega3ve side, 18% reported decreased collabora3on with internal audit.


0%

13%

25%

38%

50%

A large increase Somewhat of an increase

About the same number

Somewhat of a decrease

A large decrease

3%

22%

45%

22%

8%6%

23%

29%27%

15%

4%

23%

38%

24%

11%


0%

20%

40%

60%

80%

Legal Human Resources

Internal Audit

Business Unit (including patient

care team)

Leadership The Board

13%13%14%18%

8%5%

72%

41%

50%

68%

49%

59%

16%

47%

36%

15%

43%37%

Increase Stay the Same Decrease



Survey respondents expressed significant concerns about an increased risk of compliance failures as a result of the pandemic. The assessment that the pandemic somewhat increased the risk of failures was shared by 67% of respondents, and another 10% felt it greatly increased.

RISK OF COMPLIANCE FAILURES



In a troubling—but not unexpected—development, budgets are star4ng to feel pressure.


0%

18%

35%

53%

70%

Greatly increases the risk

Somewhat increases the risk

No effect Somewhat decreases

the risk

Greatly decreases

the risk

1%4%

23%

66%

6%2%3%

13%

68%

15%

1%3%

18%

67%

10%


0%

18%

35%

53%

70%

Increased greatly

Increased slightly

Not changed significantly

Reduced somewhat

Reduced a great deal

11%

20%

62%

5%2%

15%

25%

53%

5%2%

13%

23%

57%

5%2%




In a troubling—but not unexpected—development, budgets are starting to feel pressure. Compliance budgets, including staffing, have been somewhat reduced according to 23% of survey respondents. Another 13% reported they had been reduced a great deal.

BUDGET CHANGE



In a troubling—but not unexpected—development, budgets are star4ng to feel pressure.


0%

18%

35%

53%

70%

Greatly increases the risk

Somewhat increases the risk

No effect Somewhat decreases

the risk

Greatly decreases

the risk

1%4%

23%

66%

6%2%3%

13%

68%

15%

1%3%

18%

67%

10%


0%

18%

35%

53%

70%

Increased greatly

Increased slightly

Not changed significantly

Reduced somewhat

Reduced a great deal

11%

20%

62%

5%2%

15%

25%

53%

5%2%

13%

23%

57%

5%2%




Conclusions/Implicationsy Although the transition to the pandemic model of business has gone well so far, there are some dark clouds on the horizon. It is heartening to see that the transition in work environments has worked well for the most part and that compliance is so integrated into the business. However, an increased number of inquiries could be a sign of significant compliance challenges in the future.

y While healthcare professionals have reported some differences in their experiences compared to other industries it is to be expected. Sitting on the front lines of this crisis, healthcare professionals have confronted greater stresses and are less likely to be working remotely.

y The level of interaction with other teams demonstrates that compliance departments have become much more integrated into their organizations. A crisis can expose cracks in an organization and those that may be marginalized can feel even more so. In the case of compliance, despite dramatic changes, the data indicate that relationships with other parts of the enterprise are as strong as or stronger than before.

MethodologySurvey responses were solicited and collected during May 2020 from compliance and ethics professionals in the database of the Society of Corporate Compliance and Ethics & Health Care Compliance Association. Responses were collected and analyzed using SurveyGizmo, a web-based, third-party system. A total of 343 responses were collected.

Documents

Compliance and the COVID-19 Pandemic€¦ · Survey respondents expressed signiﬁcant concerns about an increased risk of compliance failures as a result of the pandemic. The assessment