What is a compliance dashboard?
In response to an ever-changing regulatory environment, the need for a reliable way to meet compliance initiatives is one of the few constants. Unfortunately, this need is also one of the hardest to satisfy. Keeping tabs on shifting regulations and jurisdictions is complicated and time-consuming. But, due to the threat of sanctions, fees and loss of reputation, successful businesses know the importance of remaining squarely within the bounds of compliance law.
As industries react to regulatory measures such as HIPAA, SOX and GDPR, business services have evolved to make these interactions easier to track and to manage. Chief among these technologies is the advent of the compliance dashboard. A compliance dashboard is a software solution that offers a complete overview of your organization’s compliance initiatives in an easy-to-use, interactive display.
The interactive capabilities of today’s compliance dashboards provide users with more than just a summary of performance. Dashboards help bring together disparate data sources to tell the story of a compliance program or to identify a potential problem with compliance mandates. Dashboards provide a way for users to gather and interpret data, flag deviations or anomalies, and to react to areas of noncompliance efficiently and transparently.
Corporate compliance officers use compliance dashboards to educate board members and other decision-makers on the state of compliance within the organization. Stand-alone compliance reports may get overlooked, and individual metrics can often provide misleading conclusions. Instead, compliance dashboards provide real-time information to help decision-makers identify company-wide trends and spot compliance problems before they become a real threat. Furthermore, compliance dashboards allow organizations to develop metrics for gauging a compliance initiative’s effectiveness. This can transform the compliance issue from a nest of regulations to a goal with a clearly marked path toward progress.
Compliance dashboards can also be used to monitor and react to production events in real time. Today’s compliance dashboards often connect directly to information sources, rather than an offline data warehouse. This enhanced connectivity provides users with the ability to respond immediately to issues from the dashboard screen. So, for example, users could halt production or issue alerts based on the data communicated through the dashboard. It is also possible to use the dashboard to set up automated responses, which are triggered by specific sets of process criteria.
Developing Effective Compliance Dashboards
As with so much new technology, the secret to optimal effects is successful implementation. A compliance officer developing a new dashboard has many decisions to make. Which metrics are the best to include on the dashboard? How should the metrics be grouped? How frequently should the dashboard be updated? Is it more productive to create more than one dashboard, each focused on a more specific purpose?
Sadly, there are no absolute answers to any of these questions. The truth is, each dashboard will vary, depending on the needs and demands of the industry and the organization it serves. This is one of the main reasons why flexibility and customization are such highly prized attributes when choosing a dashboard solution.
That said, compliance expert Matt Kelly offers a useful way to help think through the process. Regardless of the industry, Kelly says, there are three types of risk that consistently give corporate compliance officers and general counsel nightmares: supply chain misconduct, employee misconduct and regulatory probes.
In order to configure an effective dashboard to monitor these variables, it’s important to break each into multiple measurable data points, which, taken together, begin to form a coherent story. So, for each area, a compliance officer must tease out areas of associated risk.
For example:
Supply Chain Misconduct
- Number of third parties or business owners with unclear beneficial owners
- Number of critical suppliers with no anti-bribery training
- Number of new suppliers with incomplete due-diligence checklist
Employee Misconduct
- Compliance training completion rate
- Number of critical whistleblower allegations
- Number of exception requests for travel or entertainment
Regulatory Probes
- Number of open investigations and their nearness to completion or resolution
- A metric that can gauge potential damages or penalties associated with probes
- A metric that can categorize open probes by geography, regulator or the nature of the problem
Using Kelly’s example as a framework, you can begin to plug in the categories of risk most apropos to your organization or industry. Other possibilities may include Quality, Litigation, Government Trends or Financials. Talk to key stakeholders from across your organization to get a sense of what their most pressing risk drivers are. As an alternative way to organize your dashboard, try conceiving your risk categories in terms of structure, process and outcomes. Issues that fall under Structure might include hiring, turnover and retention. Issues that fall under Process might include compliance with industry standards and handling reports of wrongdoing or noncompliance. Issues that fall under Outcomes might focus on employee satisfaction, state or federal mandates, and any financial results of noncompliance.
Providing Context for Dashboard Data
One of the features of dashboard analytics is the possibility to create context for the raw data. These raw numbers or responses can lose meaning without some way of knowing how to gauge them. What is the goal in that area? Are our numbers trending up or down? How are we progressing from this time last year? Compliance dashboards offer the embedded analytic capabilities to provide this context, measuring current numbers against benchmarks and allowing users to examine historical activity in order to understand the movement behind the trends.
How to Use Dashboard Insights
Part of planning a successful compliance dashboard is deciding how to act on the information you gather. These insights can be used to inform a compliance committee or to assure the board of directors of the organization’s efforts. They can also bolster the results of a compliance audit, providing measurable examples of progress and effectiveness. Your dashboard’s results may also reveal areas in your organization at critical risk, providing you with the chance to rectify the situation before it becomes a costly problem.
