LMS: Evolution or Extinction – 8 trends that change everything (Part 3 of 8): Compliance

Trend #3: Compliance
(Part 3 of 8)

Don’t Be Caught Unawares

Multinational and global companies deal with different regulations and various regulators around the world. Training records are nearly always reviewed during an inspection or audit by regulatory authorities to check that employees have received the appropriate training and their competencies or certifications are current and valid.

SOPs & Training Records

In environments where personnel are required to work according to written procedures, documented instructions or standard operating procedures (SOPs), there needs to be a set of guidelines that define the tasks to be done and what has to be documented to demonstrate that the activity was actually performed. If any deviations to the procedure are made, they have to be documented at the time of the deviation, not later.

Training plays an important part when implementing a new or updated SOP since the training is what teaches employees on the new procedures. This is where the learning management system (LMS) plays a vital role — being able to schedule and track the training of individuals on the SOP’s. It is critical that organizations are able to keep accurate records of individuals and their training plans.

Electronic versus Paper

There is no regulatory requirement that dictates whether organizations must use paper or electronic media to document their personnel training records; it is left to individual companies to make that decision. The major differences between the two media are:

Item Electronic Paper
Training Plan Generated in LMS, stored easily and accessible to all appropriate personnel Manually written and requires physical presence of the person to read the document
Training Class Individual signs on to a training class and is recorded in the LMS database Presence is recorded manually on an attendance sheet
Training Completion Completion is automatically recorded in the LMS database Course completion certifications have to be gathered and recorded manually
Real-time Data Always current Not always up-to-date as records are manually updated at a later point after the training is completed
Training Records Can easily view records online or printed as a report Reports have to be manually generated from certificates that have been gathered, which may be incomplete
Data Integrity Before each important operation in the LMS, an electronic signature (e-signature) is required before the operation can happen Manually signed or initialed documents are not easy to verify or prove as valid
Version Control Electronic training records are accurately updated with the  exact version of courses taken; course revisions can automatically trigger required training to maintain compliance Paper-based document control is prone to mistakes; paper records are difficult to control, may be lost/misplaced or changed without anyone knowing and version control is hard
Audits Changes made to sensitive data are audited in the database with info on the type of change, who made it and when. Changes include any creation, update or deletion of sensitive data. Physical checklists, manually recorded

Compliance-LMS3of7
LMS Compliance Considerations

  • e-signatures in audit tracking
  • competencies and certifications
  • proactive reporting, dashboards, and analytics
  • easy access to compliance content

Given the above, are compliance checklists and reactive reporting enough from a risk perspective versus true workforce readiness and proactive compliance dashboards?

This is the third of an eight-part series on LMS: Evolution or Extinction — 8 Trends that Change Everything.

Learning & Compliance: Friends or Foes?

A few weeks ago, I wrote an article for the Inside Learning Technologies magazine on the role of learning systems in compliance training (“Is your LMS compliance friendly?”) Compliance is one of those topics that rarely get enough attention as one of the key drivers in our industry.

Survey-chart
Source: Compliance Survey 2012, Brandon Hall Group.

However, a recent survey by the Brandon Hall Group found out that regulatory and company compliance combined constitute the most important learning program for organizations’ business strategy today. In addition:

– Over 65% of organizations find it critically important or very important to demonstrate learning compliance to some external regulatory agency.

– At the same time companies understand that compliance is now impacting more on their workforces with over 60% of organizations claiming that compliance requirements involve more than three quarters of employees.

Just yesterday, it was reported that the Federal Aviation Administration announced a fine of $3.5mn to the Port Authority of New York and New Jersey for failing to train its police officers to perform rescues and fight fires. In addition to the fine, the Port Authority will need to take further measures to better oversee rescue and fire-fighting training compliance. According to the settlement, at JFK airport, the Port Authority allowed 77 police officers who were untrained for their duties to work 357 shifts from early May to early June 2012.

Compliance requirements for employees and organizations place new demands on learning systems that more traditional, developmental requirements do not. Our industry nowadays seems flooded with learning and talent management systems. But for such systems to succeed in a compliance-related role, they must be able to readily adapt to changing needs, operate at enterprise software level, and offer the requisite functionality around auditing, reporting, and security.

It is important that L&D and HR departments are up-to-date with the compliance requirements specific to their business. Here are a few suggestions to make this easier:

  1. Talk to your legal team and to your compliance officer to better understand who in the organization is responsible for what.
  2. Define clear requirements and objectives for training and the technology implementation.
  3. Question your vendor and demand a software validation for the learning or talent management system. For the technical parts, don’t be afraid to ask your IT team to participate.
  4. Make compliance an ongoing part of your business via well-defined workflows, checks & balances, and actionable reporting.
  5. When it comes to training, reinforce formal compliance learning with recurring programs. These initiatives may include informal collaborations (such as forums to discuss ongoing compliance issues), on-the-job assessments (to better evaluate the effectiveness of the compliance training), and performance support (to provide easy access to compliance-related materials at the point of need).

For more information, you can read the blog post from David Wentworth of The Brandon Hall Group on “The Problem with Canned Compliance” or, even better, join the webinar “Mission Critical: Managing Compliance Training in Europe” on April 16th.

CSR? Yes, but with limits . . .

I’ve always cast a skeptical eye on companies touting their corporate social responsibility (CSR) programs.

Some CSR programs are blatantly self-serving, for example, when companies that cause serious environmental damage tout “Earth Day” clean-ups or one-day-a-year tree planting outings.

It makes you wonder.

Senior executives sometimes bend CSR programs to suit their personal politics, thus begging the question: is it fair for the CEO of a publicly-listed company to use shareholder money, client goodwill and employee time to further the CEO’s favorite cause, especially if that cause involves stands or goals other stakeholders may not support?

Would it be all right for instance for a Spanish Catholic CEO to funnel his Bolsa de Madrid-listed company’s CSR resources through an ultra-orthodox Catholic business organization like Opus Dei? Or for a Jewish American CEO to deploy his NASDAQ listed company’s resources in support of Israeli charities that help Jewish settlers in the West Bank or Gaza? Is this the kind of “giving” shareholders sign up for when they buy company stock? Is this what fund managers want?

Is a company the proper vehicle for charitable or other giving in any case? Arguably, a company’s best and highest use is to help its clients, make a profit and return that profit to its shareholders via dividends, share buy-backs and revenue and profit growth that increase shareholder value over the longterm (not to mention increasing value for clients, employees and partners).

A dividend check is a powerful thing. It gives shareholders both the right and the opportunity to decide what to do with the company’s profits.

In short, why should the CEO get to decide which foundations, charities or causes shareholder and other stakeholder money goes to? Aren’t stakeholders smart enough to make their own decisions? Shouldn’t shareholders hold onto the right to collect (and spend) the fruits of their investments as they see fit? If the CEO is himself a shareholder he can always cash out and open a private foundation — like Bill Gates and Warren Buffet did.

At the same time, companies are under increasing pressure to document CSR initiatives in their responses to requests for proposals. Not having a well-documented CSR program in place can count against a company in a bid. Personally, I think this is an evil trend.

Companies should not feel they have to strong-arm their employees to “volunteer” for anything. Neither should companies have the right (or the need) to spend shareholder money on the CEO’s favorite causes. Neither should a company’s environmental policy be the product of a public relations exercise designed to impress product selection committees.

So, what should a company do? Doing nothing is not an option, not any more. CSR, in some form, is here to stay.

At NetDimensions we have thought long and hard about this issue. After discussions with our shareholders, staff and board members, we have decided we are not going to open a foundation with a fancy logo or try to push our clients into partnerships with our favorite charities. They can do that on their own if they want.

As a global company committed to producing value for our stakeholders, we’re going to keep it simple: as a next step we are joining the United Nations Global Compact. By joining, we’ll be aligning our policies with those of thousands of excellent organizations from around the world, including companies like Bloomberg, General Mills, SAS Institute, Capgemini and L’oreal.

The 10 guiding principles of the United Nations Global Compact are:

Human Rights

  • Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
  • Principle 2: make sure that they are not complicit in human rights abuses.

Labour

  • Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
  • Principle 4: the elimination of all forms of forced and compulsory labour;
  • Principle 5: the effective abolition of child labour; and
  • Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

  • Principle 7: Businesses should support a precautionary approach to environmental challenges;
  • Principle 8: undertake initiatives to promote greater environmental responsibility; and
  • Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

  • Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

We’ll do more (look for the CSR section soon to come on our company website). But we think committing to these 10 principles is a good start.

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Update 9 August 2012:

The Economist has now weighed in on the Corporate Social Responsibility issue.

Read it here.

Compliance matters

The Guardian, one of my favorite UK newspapers, just released an excellent, frightening article on Mexican drug cartels laundering money through an American bank, Wachovia. The drug money ended up in a lot of different places after winding its way through Mexican Casas de Cambio (money exchange and transfer services), the City of London and the world’s money laundering capital, Miami Florida.

One statistic that caught my eye was the amount of unchecked money Wachovia shifted from 2004 until the bank got caught out in 2010 — some US$378.4 billion, more than $4 billion of which Wachovia moved in cash. Some part of that total (the full numbers may never be known) was in effect, according to the Guardian, “no questions asked” banking services for drug dealers.

You can find the article here.