Earlier this year the Novel Corona Virus 19 (COVID-19) began to spread across the world significantly impacting lives, businesses, and communities. This virus was something that most did not anticipate and for many would require working in earnest to reduce its spread and its effects.
The first set of measures widely known as “flattening the curve” focused on shutting down non-essential businesses and large group meetings to slow down transmission. Additional measures such as hand washing, social distancing, and wearing of masks soon followed to further control the virus. Many have lost their livelihoods and others unfortunately their lives as a result of the virus.
When disasters like this strike we often look to insurance for relief to soften the blow. The first thing we do is check our insurance policy in hopes that we might be covered. This was the case for the CEO of the Shaw Festival Theatres in Niagara-on-the-Lake, Canada earlier this year. Imagine his surprise when he discovered that he was covered for COVID-19 and as a result would be able to keep 500 employed during the pandemic.
Was this a case of good luck or good planning? Let’s find out.
Peter Jennings, CEO of the Shaw Festival, about three years ago engaged in a risk analysis with his CFO to address possible disruptions during the theatre season. The Festival had experienced cases in the past of something as innocuous as a “stomach bug” take out a whole theatre troupe for weeks on end. So they decided to take out an insurance policy against these kinds of threats. Their policy was not perfect but fortunately for them and for the 500 employed it was comprehensive enough to cover them for “pandemics” that would include COVID-19.
For Peter Jennings, the comprehensiveness of his insurance policy provided the means for him to meet his stakeholder obligations specifically those connected with the livelihoods of those who depended on continued operations. In similar ways, the comprehensiveness of compliance is often a deciding factor for how effective organizations will be at weathering the storms associated with compliance risk.
To explore these concepts we begin a new series this week entitled, “Comprehensive Compliance.” Today, we start with an overview of what it means and why it is so important for businesses today.
Defining Comprehensive Compliance
Let’s first look at a few definitions for the word “comprehensive”
- complete and including everything that is necessary
- covering completely or broadly
- insurance, covering or providing broad protection against loss
We can see from these definitions that comprehensiveness does not mean perfect, or everything. Instead, it communicates the idea of providing enough of what you need. Determining what is needed and how much protection is enough is an important risk evaluation activity and something we will discuss in future articles.
When it comes to “compliance” we usually mean the act of complying or conformance with respect to obligations. In larger terms this means staying between the lines and as such avoiding loss of the things we are trying to protect or achieve such as financial, reputation, health & safety, environmental, quality, and regulatory objectives to name a few.
When we connect the concepts of comprehensiveness and compliance together, we add a measure of effectiveness. Compliance acts as insurance or margin against the effects of uncertainty on mission objectives. In this role compliance not only helps organizations stay out of ditches but also helps to cushion the blow providing resilience to carry on in the presence of disruption –small or large. The level of comprehensiveness is a leading indicator of how effective your compliance is likely to be at creating resilience.
Road to Resilience
CEOs like Peter Jennings would most likely rather not hear that a pandemic is now at their front door. However, when these situations and other like them come up what they do want to hear is, “don’t worry we’re covered.” This is something that all compliance functions should be able to say and a question that you might ask of your compliance, “are we covered?”
Organizations with adequate coverage have fewer vulnerabilities and greater resilience to deal with threats to their business. Fortunately for Peter Jennings and the Shaw Festival their good planning and preparedness were effective to keep their business operational in the presence of a pandemic and serves as a reminder of the value of being proactive.
Over the next several weeks we will take a deep dive into the nature of comprehensive compliance as we unpack:
- Three of the top challenges facing companies who choose to be more comprehensive with their compliance.
- Three essential capabilities that organizations need to have to achieve comprehensive compliance.
- Three outcomes that every company needs which are all created by managing compliance more comprehensively.
- And other topics.
If you want to be proactive or cannot wait, we created The Comprehensive Compliance Scorecard™ to help you assess your compliance right now. This scorecard will give you a head start and a heads up of what’s coming. You can complete the scorecard here and if requested by you will be followed up by one of our compliance experts to go over your results.
Stay tuned for our next article in this series.