COVID-19: Using technology to address compliance

Authors: Ricardo Caiado and Ana Júlia Andrade Vaz de Lima

Source: DLA Piper

At this writing, more than 2.5 million people around the world have been infected with COVID-19, and more than 172,120 people in at least 177 different countries have died.^[1] The rapid transmission of COVID-19 and the possible collapse of public health systems worldwide portends a new reality: more than 3.9 billion people, half of the world population, have been advised to stay at home to prevent the spread of the virus.^[2]

Confronted with this situation, companies quickly adjusted to the new reality so their employees can maintain their activities remotely. Technology, which had long been seen as essential to business operations, became even more essential in the new reality. Meetings have been held on online platforms, lectures have been given in the form of webinars, and other day-to-day activities have been switched to digital tools, all to keep corporate activities ongoing at distance. If remote work was a distant plan for some companies, today it is a necessary reality, and tomorrow it may be the norm.

How can compliance routines be improved in view of the lessons learned from today’s need for social distancing via technology?

Compliance, as a structured mechanism aiming at preventing, detecting, and responding to wrongdoing, can and should have technology as an ally. This article presents ideas on how technology can support and improve relevant pillars of an effective compliance program.

1. Tone from the top and interactions with the compliance officer

The COVID-19 crisis presents economic challenges for all companies, with a consequent increase in integrity risks, from drops in sales to tough negotiations with companies in the supply chain.  To ensure that businesses go forward ethically and legally, it is more important than ever to set a proper tone from the top.

Upper management can improve support to compliance functions through email communications and speeches in online meetings and by taking part in online training sessions. Clear support from a company’s leaders strengthens the continuity of the company’s ethical standards.

The compliance officer remains the axis around which the compliance program revolves. This officer’s actions must be intensified when working remotely by conducting communication initiatives, training sessions and one-on-one meetings. Online communication tools can be a great substitute for the shop floor and the physical office, serving to keep the compliance officer close and accessible for all employees.

2. Corporate profile and risk assessment

The identification of the corporate profile and the mapping of integrity risks help ensure a compliance program is compatible with the corporation. The new realities created by COVID-19 demand an update of both the corporate profile and the integrity risks matrix to enable the execution of new compliance routines.

Some examples of new risks that have arisen during the pandemic and that deserve the attention of the compliance team are (i) greater interactions with public officials;^[3] (ii) emergency direct hiring of goods and services, without a typical bidding process;^[4] (iii) emergency retention of new third parties; and (iv) leak or loss of corporate information during the remote work period.

The compliance officer can count on the help of technology to identify and tackle the new risks by (i) providing online trainings to employees involved in interactions with public agents; (ii) conducting integrity due diligences on potential new clients, business partners, and third parties via online platforms and databases; and (iii) enhancing online monitoring routines on the use of corporate devices and accounts, payments and accounting systems and records.

3. Communication and training

Today’s distancing has been much more physical than social. People continue to take part in social events – for instance, attending “live” classes, lectures and even concerts remotely from home. Communication and training can be similarly present and effective. Communication can be done via email, messages in screen saver images, and even through online games and other lighter formats.

It is important to ensure there is no loss of productivity as a result of these training and communication activities. For this purpose, training can be carried out on days with less demand or at alternative times, or in smaller groups drawn from different sectors to maintain the expected productivity.

Training sessions can also be conducted through distance learning platforms or via videoconference. Online tests can be applied to allow the assessment of employees’ adherence to the compliance program. Online training and tests benefit the company by helping it track its commitment to the compliance program’s effectiveness.

4. Reporting channels

Reporting channels can continue to function as a tool for the identification of risk and potential wrongdoing. It is possible that employees may feel more comfortable making complaints during the social distancing period, especially if the reporting channel is available through online platforms. Companies can use email and internal websites to reinforce the existence of reporting channels and reiterate their non-retaliation rules against whistleblowers.

Companies are advised to bear in mind that allegations may increase as a result of COVID-19. For example, there may be complaints about employees violating stay-at-home orders or misusing corporate devices and accounts. We encourage such allegations to be prioritized to try to stop illicit activities and to remediate any issues swiftly.

5. Internal investigations and disciplinary measures

Internal investigations can be maintained despite the limitations of social distancing. Companies are urged to consult internal and external professionals to develop secure ways to preserve evidence stored in corporate systems and devices. New applications allow remote evidence gathering, a good solution for cases in which a relevant device for a specific investigation is in the possession of an employee working from home.

Interviews require special attention due to the business continuity and security considerations involved. COVID-19 poses many risks to businesses and employees, undermining employee morale. Remote interviews conducted as part of an internal investigations may aggravate this negative scenario and harm employee performance. On the other hand, remote interviews demand more precautions to ensure their effectiveness and confidentiality.

It is advisable, therefore, to (i) identify and conduct only interviews that cannot be postponed; (ii) make sure the remote interview is conducted in a secure and tested online platform; (iii) instruct the interviewee to find a private space, attend the interview alone, and keep it confidential; and (iv) allow the interviewee to present additional information after the interview.

Employees can be informed of disciplinary measures by videoconference. In this setting, companies are advised to request that the employee digitally sign any related documents or confirm the measures by email.

6. Monitoring

Regular monitoring benefits the company by helping identifying deficiencies, weaknesses, and opportunities to optimize the compliance program.^[5] The compliance officer can ensure that internal controls are maintained and strengthened by implementing, for example, payment blocks and double approvals.

Online surveillance of corporate devices can be enhanced and properly communicated to employees. This is a good opportunity to verify that all employees have signed informed consents regarding such monitoring. If not, companies are encouraged to secure such consents.

We live in a time of great change, but also of great learning. The COVID-19 pandemic has changed the way we interact and, particularly, the way we work. Thanks to technology, many of us have remained connected and active during this unprecedented isolation. The companies that most effectively use technology as an ally in their compliance programs will be more prepared for the post-pandemic world.

 

If you have any questions regarding these issues and their implications, please contact the authors or your DLA Piper relationship attorney.

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This information does not, and is not intended to, constitute legal advice.  All information, content, and materials are for general informational purposes only.  No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.  

The authors are partner and associate in Campos Mello Advogados, an independent law firm in Brazil in cooperation with DLA Piper.