Building a culture of compliance: 10 essential building blocks
We hear a lot about compliant cultures and their importance in today's business environment — but what does it really mean to build a culture of compliance? What does it entail? And more fundamentally, why has building a culture of compliance become even more critical as organizations navigate regulatory enforcement and distributed workforce challenges?
This comprehensive guide explains how to build sustainable compliance cultures that withstand regulatory scrutiny and workforce transformation:
- Why compliance culture has become mission-critical for organizational survival
- Current challenges facing compliance teams in distributed work environments
- 10 essential building blocks that create lasting compliance cultures across all organizational levels
- Technology solutions that scale compliance culture from growing companies to global enterprises
Why building a culture of compliance has become mission-critical
Today's compliance situation presents extraordinary challenges that make cultural transformation essential for organizational survival. The SEC achieved record-setting $8.2 billion in financial remedies in fiscal year 2024, despite filing 26% fewer total enforcement actions compared to 2023. This dramatic shift toward higher-penalty enforcement means that compliance failures now carry substantially greater financial consequences.
This enforcement intensity reflects a broader trend across all regulatory agencies. The total monetary penalties across all covered enforcement agencies reached $24.6 billion in 2024, representing a 22.2% increase from the previous year. This represents organizational failures that could have been prevented through effective compliance cultures.
Meanwhile, the regulatory environment itself is becoming increasingly complex. Recent SEC updates include mandatory cybersecurity disclosure standards under Item 408(b) of Regulation S-K. Organizations must now disclose insider trading policies or provide detailed explanations for non-adoption. These expanding obligations require organizations to leverage both technology and cultural transformation to stay ahead of compliance challenges.
Adding to this complexity, public perception and corporate reputations are increasingly defined by a company's ethical performance. Whether you are trying to comply with external legislative requirements, industry-specific regulations, or internally mandated standards, many businesses struggle to keep up with evolving obligations while managing distributed workforces.
The convergence of these factors — higher penalties, expanding regulations, and heightened stakeholder expectations — makes one thing clear: compliance must be embedded within the business culture. An overlay of compliant activity cannot redeem a fundamentally flawed culture. We need to rethink our approach to put compliance front and center in business strategy. But among their numerous responsibilities, how can businesses achieve this and create a true culture of compliance?
Current challenges in building compliance cultures
Organizations face several challenges when building compliance cultures in today's work environment. The shift to remote and hybrid work has fundamentally changed how compliance teams engage with employees and maintain ethical standards.
The first challenge is visibility. Remote work makes it harder to spot compliance issues before they become problems. You can't rely on hallway conversations, visual cues, or the informal oversight that naturally occurs when people work in the same location. Compliance teams lose the early warning signals that help prevent small issues from becoming major violations.
Second, traditional training approaches fall short with distributed teams. Generic online modules feel disconnected from real work situations, and employees often treat them as boxes to check rather than meaningful learning experiences. The technology barriers that affect training accessibility compound this problem, as not everyone has the same comfort level or resources for digital learning.
Third, employee engagement has declined significantly. According to Gallup, U.S. employee engagement reached an 11-year low in 2024. Disengaged employees are less likely to internalize compliance principles or speak up about potential issues. They go through the motions but don't develop the judgment needed for ethical decision-making in ambiguous situations.
The challenge goes beyond just maintaining compliance — it's building cultures where people make good decisions even when no one is watching. This requires different approaches than the conference room training and policy distribution that worked in traditional office environments.
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How is sustained commitment to compliance created? What can businesses do to foster genuine compliant cultures that withstand regulatory scrutiny and workforce transformation? We have identified ten key enablers that have proven effective:
1. Set the tone from the top with measurable accountability
The board and senior leaders aren't just responsible for compliance oversight and best practices — they must demonstrate active commitment through their actions and resource allocation. Leadership credibility becomes even more critical when managing distributed teams, where modeling behavior has less direct impact.
Board members must model the behaviors they espouse while ensuring compensation reflects behaviors aligned with corporate values. They need to ask probing questions about compliance culture effectiveness, especially regarding remote work environments and technology adoption. The importance of "doing as I do" when it comes to leader actions cannot be underestimated, particularly when face-to-face interaction is limited.
2. Engage employees from the start with scenario-based approaches
Compliance culture requires embedding ethics, business integrity, and corporate values from the onboarding process through career development. However, traditional training approaches prove insufficient for distributed workforces and disengaged employees.
Effective compliance culture building requires moving beyond one-size-fits-all training approaches to create engaging, scenario-based experiences that help employees understand how compliance principles apply to their specific roles and daily decision-making processes. This approach becomes particularly critical when managing multi-generational, distributed teams.
Clearly convey organizational expectations around compliance to employees, suppliers, and stakeholders early in relationships. Use interactive scenario-based training that engages employees in realistic situations rather than generic compliance content. This approach proves particularly effective for multi-generational workforces with varying technology comfort levels.
3. Make the compliance team accessible and data-driven
Bring corporate ethics and values to life through authentic engagement and practical insights. Your employees can read policies and processes independently, but speaking about them and sharing real-life stories makes compliance relevant and approachable.
Make it easy for people to ask compliance questions before they make decisions, not after problems occur. Set up regular office hours, respond quickly to inquiries, and create simple ways for people to get guidance. When someone asks a question, treat it as an opportunity to build understanding rather than test knowledge.
"Process owner engagement is not just taking instructions and running with them. We listen, we engage, we get process owners involved so they feel like they're a part of it. And when we deliver 100% of what they want, they love it and they want more of it. Keeping your owners engaged and part of the process is super important," says Brad Karn, Manager of Financial Data Analytics at Mercy Health.
Use real examples from your organization when training or discussing compliance issues. Instead of generic case studies, explain how compliance principles apply to actual decisions your teams face. This helps people recognize similar situations and know when to seek guidance.
4. Embed compliance in everything you do
As employees develop within their roles, compliance must form a central part of the organizational learning strategy. Chief compliance officers should collaborate closely with human resources teams to integrate compliance-related issues into orientation and leadership programs.
Technology enables broader reach and more flexible engagement options. Virtual learning sessions can accommodate more participants than physical meeting rooms, and recorded content allows people to learn at times that work for their schedules. Technology has helped compliance teams reach distributed audiences while maintaining personal connections through interactive features and follow-up discussions.
However, employee engagement requires attention to well-being alongside compliance education. Digital fatigue and isolation can erode employees’ willingness to participate in a compliance culture. Consider implementing Zoom-free days, allowing camera-optional participation, and encouraging outdoor meetings when possible. Well-being initiatives support compliance culture effectiveness by maintaining employee connection to organizational values.
5. Guide strategic decisions without dictating operational details
Compliance leaders must balance crisis response with strategic guidance, avoiding conflicts of interest while supporting business objectives. When unexpected situations arise, compliance teams naturally become go-to resources for solutions, but this creates potential complications.
The most effective approach involves asking strategic questions rather than providing operational answers. By asking the right questions, compliance leaders can ensure operational teams understand requirements while allowing them to determine implementation approaches. This maintains proper oversight boundaries while supporting effective decision-making.
Consider yourself a "translator" between legal requirements and business operations, helping teams figure out optimal solutions independently. Evaluate proposed approaches not just for legal compliance — which should be the minimum standard — but also for alignment with corporate values and ethical principles.
6. Implement clear compliance processes
Regulation tells us what we must do, but not how to accomplish objectives effectively. Compliance leaders must bring structure and framework to processes while integrating with existing operational systems.
Process design matters significantly in today's environment. Compliance cannot function as a standalone activity — it must integrate with operations, audit, risk management, and governance processes. Enterprise risk management strategies dovetail with governance, risk, and compliance approaches to form integrated frameworks for addressing organizational threats.
Make compliance an integral component of audit, risk, and governance processes. Position it as part of your comprehensive corporate strategy rather than a separate function. This integration becomes particularly important when managing complex regulatory requirements across distributed organizations.
7. Create continuous feedback loops and improvement cycles
Sustainable compliance cultures require ongoing assessment and refinement. Organizations must establish mechanisms for collecting feedback from employees, stakeholders, and external partners about compliance program effectiveness and cultural alignment.
Regular pulse surveys, anonymous reporting channels, and structured feedback sessions help identify gaps between intended compliance culture and actual employee experiences. This intelligence enables compliance teams to adjust approaches based on real-world effectiveness rather than assumptions.
"Everyone has a role to play in risk management. You don't have to be a risk professional; you can be on a school board, in a nonprofit, or in a large corporation. It's something everyone should be doing, looking at the risks and the future," says Amanda Carty, Managing Director of Strategic Market Solutions at Diligent.
Implement quarterly compliance culture assessments that measure both behavioral indicators and outcome metrics. Track employee participation in voluntary compliance activities, quality of compliance-related questions and discussions, and proactive risk identification by non-compliance staff members.
8. Build cross-functional compliance partnerships
Effective compliance cultures transcend organizational silos. Compliance leaders must cultivate partnerships with human resources, legal, audit, risk management, and operations teams to create integrated approaches that reinforce compliance principles across all business functions.
Cross-functional partnerships enable compliance teams to leverage existing relationships and communication channels while avoiding duplicative efforts. HR partnerships ensure compliance considerations are integrated into performance management, compensation decisions, and career development planning.
Legal partnerships help distinguish between minimal legal requirements and ethical best practices, ensuring compliance culture addresses both regulatory mandates and values-based decision making. Operations partnerships ensure compliance requirements are built into workflow design rather than added as afterthoughts.
9. Demonstrate compliance culture value through business outcomes
Compliance culture initiatives must demonstrate measurable business value to sustain organizational investment and leadership support. Connect compliance culture metrics to business outcomes such as operational efficiency, risk mitigation, stakeholder confidence, and competitive advantage.
Track metrics that matter to business leaders:
- Reduced regulatory penalties
- Faster response times to compliance issues
- Improved audit results
- Enhanced stakeholder confidence scores
- Decreased time-to-resolution for ethical concerns
Present these metrics in business language that demonstrates return on investment.
10. Leverage advanced technology for efficiency and insight
Technology has become essential for maintaining compliance culture effectiveness across distributed workforces and managing regulatory complexity cost-effectively.
The PwC Global Compliance Survey 2025 demonstrates measurable returns on compliance technology investments:
- Better visibility of risks and risk management activities (64% of respondents)
- Faster identification and proactive response to compliance issues (53%)
- Higher quality and more insightful reporting (48%)
- Increased productivity and cost savings (43%)
Technology enables compliance teams to maintain visibility, sustain engagement, and retain oversight of key issues while supporting team well-being through virtual connection methods. Online meetings have become alternatives to informal check-ins, helping ensure that teams manage stress and workload effectively.
Choose technology solutions that help compliance teams become more efficient while ensuring compliance metrics are accurate and reliable. The right technology supports an embedded culture of compliance through comprehensive, actionable data.
How Diligent's solutions transform compliance culture
Building sustainable compliance cultures requires more than good intentions — it demands technology infrastructure that operationalizes ethical principles into daily workflows. Organizations need solutions that automate routine compliance tasks, provide real-time insights, and enable teams to focus on culture building rather than administrative overhead.
With this objective in mind, Diligent provides:
- Policy Manager that simplifies policy governance from creation to compliance, automating attestations and ensuring policies stay current with evolving regulations while maintaining audit-ready documentation.
- Third-Party Manager that proactively manages risk across your entire vendor ecosystem, using AI-powered screening and monitoring to protect your reputation through comprehensive due diligence workflows.
- Compliance Ethics Training that builds cultures of integrity through 4,000+ pieces of science-backed microlearning content in 60+ languages, making compliance education engaging and memorable for distributed teams.
- Diligent One Platform that unifies board management, compliance, risk, audit, and ethics tools in an integrated solution, enabling one-click reporting and allowing leadership to shift from manual to strategic tasks.
- Whistleblowing software that modernizes whistleblowing and case management with AI-powered intake, secure anonymous reporting, and streamlined investigations that speed up resolution.
- Due Diligence solutions that scale risk-based decisions through AI reports, analyst-led investigations, and enhanced due diligence, ensuring you uncover hidden risks while meeting regulatory expectations.
This technology foundation enables compliance teams to shift from administrative tasks to strategic culture building, creating the sustainable behavioral changes that withstand regulatory scrutiny and workforce transformation.
Ready to transform your compliance culture with AI-powered governance? Schedule a demo to see how Diligent can help you build sustainable compliance excellence that scales with your organization's growth.
FAQs about building a solid compliance culture
What is the most important element for building a strong compliance culture?
Setting the tone from the top remains the foundational element, but it must be combined with measurable accountability and data-driven insights. Leadership commitment must be demonstrated through resource allocation, visible behavior modeling, and consistent messaging across all organizational levels, especially in distributed work environments.
How do remote and hybrid work arrangements affect compliance culture?
Remote work creates unique challenges, including reduced oversight, difficulty building culture without in-person reinforcement, and technology barriers. Successful organizations address these through scenario-based training, comprehensive policy management for hybrid environments, multi-modal content delivery, and technology solutions that maintain engagement and visibility.
What role does technology play in compliance culture?
Technology has evolved from a supporting tool to an essential enabler of compliance culture. AI-powered solutions help compliance teams focus on strategic culture-building activities while maintaining comprehensive oversight. The key is choosing solutions that enhance human engagement rather than replacing it.
How can organizations measure compliance culture effectiveness?
Effective measurement combines quantitative metrics (training completion, incident reporting, audit results) with qualitative indicators (employee survey responses, leadership feedback, stakeholder confidence). Data-driven approaches help compliance leaders understand culture gaps and demonstrate ROI from culture investments.
What are the biggest compliance culture risks organizations face in 2025?
The primary risks include failing to adapt traditional approaches for distributed workforces, underestimating the impact of employee disengagement on compliance effectiveness, and inadequate technology integration. Organizations also risk significant financial penalties — with enforcement averaging higher per-violation costs — if culture failures lead to compliance breakdowns.
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