Certification Stragglers

Being a CCO can be a rewarding job, but it has its share of frustrations. You work hard to communicate the importance of your firm’s compliance program and think you’re communicating effectively. Still, a subset of employees consistently returns certifications or other required information after the deadline. Worse, some may still have not yet completed.

So, what are you doing wrong? Chances are you’re not doing anything wrong. Nearly every firm has to follow up with stragglers at some point. Having said that, some firms seem to be more effective at curtailing repeat behavior when it comes to turning in certifications past the deadline.

Here are some of the tactics financial services firms have found helpful in stopping (or slowing) stragglers’ activity:

Educate Employees

First, look at your communications and messaging around certifications. While instructions and requirements may be clear to compliance professionals, a sales director or operations associate may not fully understand their obligations.

Help employees understand that your firm’s certification requirements are there because your firm must comply with industry rules and regulations. In other words, make it clear that you are not arbitrarily making up compliance requirements like certifications just for fun. When employees can see their role in helping ensure the organization remains in compliance, they may be more attuned to certification – and other compliance – deadlines.

From a practical standpoint, remind employees about the mechanics of completing certifications, telling them how to get into the system if they are not regular users, and how to reset their passwords, if necessary.

Start Early

When you know that certain employees are likely to drag their feet with their certification responses, start the process earlier for them. Some firms find that moving stragglers into a separate group for reporting purposes and using an earlier completion timeline can help them manage behavior and encourage more timely responses.

Document the Behavior

After your deadline has come and gone, keep track of stragglers. Review completion reports regularly to identify who is in compliance with deadlines and who isn’t. Don’t be surprised if you see the same names reappear on consecutive quarters’ reports.

Documenting when someone is late with their response, how many days overdue it is, and how frequently the offender is late can help you determine what level of further action is appropriate.

Let stragglers know that their non-completion has been recognized and recorded (share the information noted in the above paragraph), and that compliance will take appropriate action as identified in your policies and procedures.

Speak to the Employee’s Manager

If your attempts to get a certification response from an employee aren’t giving you the results you want, you might find that speaking to his or her direct supervisor will help. If the direct supervisor doesn’t act on your request (if, for example, the direct supervisor is also on your list of stragglers), elevate the issue to the department head or next-level manager.

Let employees know upfront that delays in responding will be escalated up the chain of command, and embed those notifications in the process. Sometimes, simply copying a first-line supervisor on reminder notices or suggesting you might involve higher-level managers is enough to prompt swift action and ensure future certifications are returned on time.

Hold a Face to Face Meeting

When system reminders, email notifications and phone calls aren’t doing the trick, meeting with the employee face-to-face can help them understand that you’re serious about enforcing your deadlines. Of course, this isn’t always possible when workers are geographically dispersed, but it can be an effective tool where feasible.

Impose Penalties / Reduce Privileges

Unfortunately, it may be necessary to impose penalties for non-compliance or repeat offenders. Some employees will take advantage of policies without any teeth, knowing there are no repercussions for failing to follow the rules.

Making the penalty fit the crime can be an effective tool for certifications stragglers. For example, if an employee is late with his or her quarterly certification about personal trading, an appropriate penalty might be to restrict their trading privileges until the certification is returned. Or lock them out of their T&E reimbursement software until they are in compliance.

Before designing and implementing penalties (or incentive programs), run your ideas upline to get buy-in from senior management. And, of course, be sure to check with legal counsel to ensure your ideas aren’t inadvertently violating labor laws or other regulations.

Try Various Approaches; Adopt What Works

Regulators expect your firm’s policies and procedures to address your requirements under applicable securities laws. In turn, they expect you to enforce those policies and procedures.

As you can see, there is not any one universal way to deal with stragglers effectively; what works for one firm may not work well for another. However, it is important to make sure you address the problem or risk leaving your firm vulnerable to misconduct from your employees, and to charges that you failed to adequately enforce your compliance program.


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