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The evolution of compliance programs from “check-the box” to a human-centric, proactive approach represents a fundamental shift in corporate governance.1 The demand for greater transparency in governance has elevated the function of the program from a rule-based approach to a culture-driven motivation framework. Compliance is no longer seen as a cost center but as something that adds efficiency and reduces potential, incalculable expenditures from penalties and sanctions — not to mention the loss of productivity due to lower workforce morale when people become aware that the rules do not always apply equally to everyone.

A compliance program can be compared to an insurance policy, in that it acts as the “invisible” people insurance. Behind the scenes, compliance serves the people: employees, customers, vendors, volunteers, investors, and the community at large. For instance, the program offers a powerful layer of protection within an organization, much like an insurance policy that protects against unforeseen risks. However, the benefits of a strong compliance program are not always obvious to employees and leaders, so it is important for compliance officers who advocate quietly to regularly showcase the value with incremental achievements to maintain relevance and long-term success.

Layer of protection from unethical behavior

When effective compliance programs act proactively rather than reactively, they can protect against unethical behaviors such as discrimination, harassment, retaliation, and falsified information. This is done by establishing a foundation of written policies and procedures that clearly define unacceptable behavior and its consequences for violations, ongoing and consistent training, and anonymous reporting systems that allow employees to securely and safely report concerns. However, when an employee’s morality and ethical principles supersede or challenge established policies and procedures, it can cause significant harm to the organization’s culture. For this reason, it is imperative to have a code of conduct that highlights not only essential rules and regulations, but also core values and universal moral principles to guide employees on tough decisions in complex situations where there is no obvious “right” or “wrong” answer.

This layer of protection is elevated and only effective through leadership endorsement. Leaders must model the desired behavior through their words and actions, addressing negative or unacceptable behavior and recognizing behaviors that reinforce an inclusive environment and psychological safety in the workplace.

Assurance of fair and sustainable environment

Compliance programs can also provide assurance of a fair and sustainable environment that reinforces commitment through corporate social responsibility and people-focused business models — similar to insurance, in that there is an expectation that people will act in these same capacities. These include, but are not limited to:

• Human rights: Offering fair compensation or labor practices such as transparent and equitable pay, employee assistance programs focusing on employees’ well-being, spiritual or mental health resources, flexible work, etc. 
• Workplace safety: Providing a safe and healthy environment both physically and mentally, and setting responsibilities for employees as well as for the employer, such as keeping up with facility and equipment maintenance, mitigating hazards that may endanger employees or physical buildings, reporting unsafe conditions, conducting proper training, etc. Prioritizing safety prevents accidents, reduces costs, and improves employee morale and well-being. 
• Privacy and data security: Protecting data from unauthorized disclosure through ethical data handling and responsible use of emerging technologies, implementing privacy protections, respecting individuals’ rights, and ongoing monitoring can prevent internal or external breaches and build trust in the workplace. 
• Governance and oversight: Creating clearly written policies, procedures, and bylaws, as well as sound contract management processes. Strong governance holds individuals and organizations accountable for their actions and decisions. 
• Whistleblower/confidential reporting: Ensuring open-door communication where everyone is part of the compliance process and protections. 
• Disciplinary system: Communicating consequences and expectations; however, inconsistent disciplinary action can lead to perceived injustice, discontent, and resentment, potentially creating a culture of mistrust. A system of progressive discipline and an impartial investigation process ensures discipline is enforced fairly, equitably, and consistently. 

Protecting from unforeseen risks

Over time, a well-designed and effective compliance program builds organizational resilience by embedding ethical and moral behavior into daily business practices; it equips employees with the right tools and knowledge to create a “human firewall.”

Much like an insurance policy, empowered employees are the organization’s best safety net.

They are more agile tackling new challenges and unforeseen situations.

The success of an insurance policy, much like a compliance program, is primarily influenced by happy and engaged employees and customers and by maintaining long-term relationships, as both rely on people’s actions and attitudes to build a culture of trust, self-enforcement, and participatory adherence to established principles of loss mitigation. Nonetheless, this culture can be broken when business objectives, such as profits, are prioritized over employees’ or customers’ well-being and mutual needs, leading to discontent, poor returns on investment, and increased risky behavior.

Over time, a well-designed and effective compliance program builds organizational resilience by embedding ethical and moral behavior into daily business practices; it equips employees with the right tools and knowledge to create a “human firewall.”2

Happy employees = profitability

Ethisphere conducted a survey gathering data from the World’s Most Ethical Companies from January 2020 to 2025,3 and it showed that companies with a stronger ethical culture financially outperformed a comparable index of global companies by 7.8%.4

Table 1: Comparison of a compliance program and an insurance policy

Wow! Ethisphere looked into the companies’ compliance programs that demonstrated a positive environmental and social impact, had an equipped and prepared governance framework, and had a sound third-party management program, and rated the companies’ culture of ethics by evaluating the following three measurable efforts:

• 1. Efforts to establish ethical tone from the top to middle 
• 2. Frequency with which culture is evaluated 
• 3. Methods, outcomes, and action planning 

What does this tell us? What can we learn from those companies?

1. Tone at the top (to middle)

This would entail the following practices:

•  Lead by example 
• Empower middle management 
• Recognize and incentivize ethical behavior 
• Consistent, fair, and equitable disciplinary action — accountability 

Ethisphere data finds that the employee’s direct supervisor has the most influence on the employee’s actions and behaviors.5 A leader who listens and engages with respect and kindness will make the employee feel more comfortable talking about a challenging or compliance-related topic.

Celebrating small wins and rewarding “great catches” rather than focusing on mistakes also positively impacts culture by boosting employees’ self-esteem and overall performance.

This relates to insurance in that, as insurance companies engage with and educate consumers, leads to people reducing risky behavior, leading to fewer claims and, in turn, they are then rewarded with smaller to no rate increases.

2. Frequency with which culture is evaluated

Culture is not static; it is dynamic. Like a flower, it requires consistent care and nourishment to blossom and stay alive. There is a funny quote from Zig Ziglar: “People often say that motivation doesn’t last. Well, neither does bathing; that’s why we recommend it daily.”

Organizations that frequently assess, evaluate, and discuss culture in the workplace, one way or another, tell us that this awareness of and focus on it are relevant and valuable to them, and that they genuinely care about it. We have seen organizations that falsely claim to be committed to ethical standards through massive marketing strategies, even as employees know it is a lie — examples like Volkswagen’s “clean diesel” scandal or IKEA illegally sourcing timber, destroying biodiversity, and violating forestry laws in Europe. Testing the frequency with which culture is evaluated in an organization is a key consideration for leaders seeking to demonstrate their commitment.

3. Methods, outcomes, and action planning

Ethisphere also looks at the organizations’ cultures by evaluating the World’s Most Ethical Companies outcomes and action planning using what they call the Ethics Quotient® (EQ) framework.6 Methods and actions are features that demonstrate whether the compliance program is truly effective and well-designed. For instance, a hotline is a critical component of compliance programs, and the outcomes of those reports and actions can tell us a lot about an organization’s speak-up culture. In other words, Ethisphere is not looking to see if the organization has a specific program or process in place, but rather how the organization is leading with that process and what makes them stand out from other organizations.7

Overall, by instilling the idea that compliance is part of everyone’s job duties, it adds an additional benefit: compliance and compliance departments’ relevance become more apparent and less of a mystery. Insurance is the same. By being part of the enforcement of policies, all benefit.

Everyone participates in the process. In the insurance industry, underwriting establishes rules and policies, then educates employees on them. Agents then educate their customers and coworkers. If the established rules and policies are violated, everyone stands to lose. This can range from violating state and federal laws governing insurance companies, which can lead to sanctions and fines being levied, to reduced premium collections, which can impact proper funding to pay claims, up to and including company solvency. Likewise, compliance departments ensure that policies are followed. But compliance departments don’t act alone. All employees are actively part of the process by reminding coworkers of the proper policies and procedures and reporting violations. As with insurance, this significantly aids in reducing violations of state and federal laws, which in turn reduces sanctions and accompanying financial penalties. This then allows funds to be properly invested in the company, its employees, and customers.

We can conclude that the World’s Most Ethical Companies have one thing in common — their focus on people for long-term success sets them apart — “they just don’t talk about ethics — they live it, lead with it, and drive measurable success through it.”8 A testament that a human-centric compliance program empowers everyone in the organization to do the right thing — not just management — and balances compassionate leadership with regulatory compliance. It reinforces universal morals and alignment with the organization’s core values and explains the ethical reasoning behind rules or regulations.9

Endnotes

1. Alan Carlise, “The Future of Compliance Is Proactive — Here’s How to Lead the Way,” Corporate Compliance Insights, February 3, 2025, https://www. corporatecomplianceinsights.com/future-compliance-proactive-how-lead-way/ . 

2. Hannah Tichansky, “The Human Firewall: Empowering Employees as a Key Line of Compliance Defense,” Gan Integrity, blog, September 2, 2025, https://www.ganintegrity. com/resources/blog/the-human-firewall-empowering-employees-as-line-of-compliance defense/ . 

3. Anne Walker, “Ethisphere Announces the 2025 World’s Most Ethical Companies,” Ethisphere, March 11, 2025, https://ethisphere.com/2025-worlds-most-ethical companies/ . 

4. Erica Salmon Byrne, “The Five-Year Ethics Premium Shows How Integrity Pays Off,” Ethisphere, March 13, 2025, https://ethisphere.com/the-five-year-ethics-premium shows-how-integrity-pays-off/ . 

5. Douglas Allen, “10 Ways to Create a Culture of Compliance,” Ethisphere, July 22, 2024, https://ethisphere.com/10-ways-to-create-a-culture-of-compliance/ . 

6. Ethisphere, “World’s Most Ethical Companies®: Want To Learn More About How To Apply?” accessed January 13, 2024, https://ethisphere.com/worlds-most-ethicalcompanies/#learn-more. 

7. Bill Coffin, “Understanding the Latest Ethics Quotient Updates,” Ethicast, podcast, episode 190, June 17, 2025, https://ethicast.castos.com/episodes/understanding-the-latest-ethics-quotient-updates . 

8. Walker, “Ethisphere Announces the 2025 World’s Most Ethical Companies.” 

9. Susan Divers and Adam Balfour, “The importance of humanizing ethics and compliance programs,” LRN Principled Podcast, season 10, episode 2, September 15, 2023, https://lrn.com/blog/the-importance-of-humanizing-ethics-and-compliance-programs . 

Takeaways

• An effective compliance program protects both people and business. 
• A people-focused compliance program drives everyone to protect the organization effortlessly. 
• Empowered employees who are effectively equipped and empowered become the organization’s first line of defense. 
• Compliance is the insurance that allows for optimal operations and outcomes. 
• And possibly the most important: Everyone is part of compliance, whether they work in a formal compliance department. This is the best insurance for all involved. 

CEP Magazine | March 2026

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