Cracks in the System: Signs Your Ethics and Compliance Systems Need Attention

Not all compliance failures are dramatic scandals; some failures unfold slowly with small warning signs that something is awry. These signs can go unnoticed and never get addressed, especially in busy environments where teams focus on day-to-day operations. Spotting these warning signs makes all the difference for ethics and compliance professionals.

Here are a few signs that could indicate your organization’s compliance systems are operating under strain:

1. High Turnover in Sensitive Areas

   Resignations and reassignments in finance, procurement, or compliance could be more than a staffing issue. The turnover may reflect a lack of ethics or a toxic internal culture. If it is hard to fill key roles, then it is time to understand this dynamic and create solutions to ensure a lower turnover rate.

2. Incidents Are Reported but Not Investigated

   A whistleblower and reporting channel is only as strong and credible as the response system. If incidents are reported but never resolved, it signals that integrity is not a priority. 

3. A Culture of Silence

   A program cannot be effective if staff do not speak up or fear retaliation. A culture of silence and fear will impede transparency and allow misconduct to operate in the shadows.

4. Lack of Traceability

   Missing documentation and unclear audit trails are signs of a severe weakness in internal controls. Accountability weakens when it is difficult to trace decisions and financial flows.

5. Excel is Doing Too Much

   Spreadsheets are powerful tools. However, they are not the backbone of a compliance program. If spreadsheets are multitasking as compliance reporting, due diligence tracking, and risk monitoring tools, it is a sign that your integrity systems lack controls and integration.

Pay Attention to the Warning Signs

These signs alone do not indicate that your compliance program is failing, but they do point to system gaps that need attention. As you address these gaps, ask these questions:

• Do these issues make up a pattern, or are they isolated?

• Are staff confident enough to report concerns and that action will be taken?

• Do you need new tools that address your current risks?

Integrity can erode slowly over time. It can start with small cracks that widen over time. Paying attention to these small cracks will allow compliance leadership to reinforce ethics culture or revamp outdated systems. The best compliance programs create environments where misconduct is less likely to happen, and paying attention to these early warning signs can ensure that your integrity programs function at a high level.

Michele Crymes

Anti-Corruption and Governance Expert