Steve Macvicar explains the effect that corporate misdemeanours have had on compliance training

In 2002, two relatively unknown US politicians, Paul Sarbanes and Michael Oxley, found themselves propelled onto the international stage when they were asked to draft legislation to ensure that the spate of corporate scandals then rocking American business (Enron, Worldcom etc) never happened again. The Act which now bears their name has since been described as ‘one of the most influential and controversial pieces of corporate legislation ever to have hit the statute book’.

Effective since 2004, Sarbanes-Oxley (or the Public Company Accounting Reform and Investor Protection Act, to give it its formal name) requires all publicly traded companies in the US to submit an annual report of the effectiveness of their internal accounting controls to the SEC. Any corporate officer who does not comply, or submits an inaccurate certification, is liable to receive a fine of up to $1m and ten years in prison if he or she does so mistakenly – and up to $5m and 20 years in prison if the failure is intentional. In the context of the modern globalised world, the repercussions of this act have not been confined to North America, but have been felt by virtually every multinational in the world.

An unforeseen consequence of Sarbanes- Oxley has been a step change in the demand for compliance regulation across the board. Overnight, a whole category of compliance training emerged to cover all kinds of new compliance requirements, not just in finance but also in HR and IT. Broadly speaking, compliance training is training that an organisation has to do in order to continue to function in a fully professional manner, and it almost always has a set of key external drivers:

• General legislation. A myriad of new laws include some form of compliance, from Sarbanes-Oxley through to the Employment Quality (Age) Regulations 2006. Competence in some can mean the difference between life and death. The failure to spot the danger Ian Huntley posed as a school janitor was instrumental in the Soham murders, and the subsequent Bichard enquiry put that failure down to poor understanding of the Data Protection Act and inadequate training on its provisions.

• Industry regulation. This provides powerful organisational drivers where compliance affects an organisation’s ability to trade within its industry and carry out its core business.

• Technical standards. When the financial industry recently switched to ‘chip and pin’ technologies, retail organisations faced the danger of being completely left behind if they did not rapidly retrain for their new systems.

• Professional best practice. Best practice guidelines tend to be less pressing than the dictates of industry regulation, as they are usually voluntary and carry no explicit penalties for non-compliance other than the danger of an organisation’s standing and reputation suffering. In some highly competitive markets, this can be incentive enough.

• Quality standards – such as ISO9000 and Six Sigma. The danger of losing this kind of accreditation can sound the death knell for many organisations. Compliance and e-learning One of the principal beneficiaries from Sarbanes- Oxley and all the compliance regulation that followed has been the e-learning industry – and with good reason. Where compliance needs to be rolled out across a large, dispersed workforce to a finite deadline, e-learning has three major advantages over other training and delivery methods:

• it guarantees a consistency of message, in that everybody receives exactly the same message;

• it is faster and cheaper to deliver than face-toface training in particular; and

• it is fully trackable, so that where proof of compliance is required (frequently the case), it can provide an electronic audit trail through a learning management system. It is also flexible, which is critical in two ways.

Legislation is frequently subject to last-minute changes and ongoing amendments, which can easily be disseminated electronically as and when required. Also, the emphasis required by companies in different sectors is different – and indeed, frequently differs from one company to another within a given sector, depending on a number of variables such as corporate or organisational culture and operational procedures. By adopting the ‘80-20’ rule (80 per cent generic solution and 20 per cent bespoke), e-learning can offer a cost-efficient means of tailoring what are essentially common information needs with tailored interpretations.

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