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Compliance in a crisis: challenges and opportunities for regulators during COVID-19

5 October 2020

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COVID-19 has put extra pressures on regulators and forced a re-examination of how they work, demonstrating the vital importance of functional agility, strong and consistent leadership and ongoing collaborative relationships with peers.

An ANZSOG/National Regulators Community of Practice (NRCoP) facilitated conversation on September 22 brought a group of senior regulators from a range of jurisdictions and sectors together to discuss the challenge and opportunities of Compliance in a crisis, the second of the NRCoP’s facilitated conversations.

COVID-19 has brought the benefits of regulators learning from each other into sharp focus and the initiative responds to long-standing requests by NRCoP participants for the opportunity for deeper engagement with their regulatory peers on common challenges and innovations.

The first facilitated conversation focused on Windows of opportunity in a crisis and discussed the platform which regulating in times of pandemic has provided for testing out ‘bottom drawer’ ideas, for accelerating regulators’ transition to more digital and contemporary forms of regulation, and for ceasing areas of work which have proven to be low value or redundant. Insights from the discussion can be found here.

Compliance in a crisis, canvassed three key questions in small groups:

Functional agility: How has your regulatory workforce increased/changed in response to COVID-19?
Officer deployment: How have your authorised officers been skilled up and deployed to support regulatory peers?
Joint operations: How have you worked as lead or support in joint regulatory operations?

Over the course of the discussion, several themes emerged, as did insights and lessons learned for the future. These are listed in more detail below, but key among them were:

the need to be agile across a range of dimensions, including accelerating the transition to digital
the importance of collaborating better with regulatory peers and building ongoing relationships
the need to ensure clear and consistent definitions between agencies when tasks like ‘compliance’ are shared.

Leaders and managers have been required to step up, not only to deliver crisis-driven requirements but to support a stressed workforce operating in an uncertain environment.

Despite this, there were many positives that had emerged over the past six months, as regulators reassessed their roles. There was a new awareness of the discipline of regulation as a transferable skill, and the similarities between the work of regulators in different fields, as well as the importance of the ‘right people being at the table’ when decisions are made. Finally, the pandemic has served to emphasise the commitment of regulatory teams to the public good and their mission of serving the community.

Compliance in a crisis insights
1. Agility and digital sophistication

The pandemic has put regulators’ agility and digital sophistication to the most stressful of stress tests, bringing into sharp focus what it takes to be a contemporary regulator supporting a mobile and digitally-enabled workforce. The Compliance in a crisis conversation revealed:

Remote working is relatively straightforward, or already well in place, for some areas of regulatory activity but much more challenging for others.
Participants observed differences between in-field regulator staff, who are already supported to be mobile and digital, compared to some office-based duties such as call centres and licensing, where agencies lacked preparedness and technology for remote working.
Scaling up extremely rapidly has revealed challenges around staffing, technology, how compliance tasks are carried out and with what priority.
In common with other parts of the public sector, regulators have had to relinquish doubts about recruiting and deploying staff remotely.
Decision making processes have needed to be transformed in various ways but in particular, to become more adaptable and devolved in response to rapidly changing circumstances.
There have also been many examples of innovation in the compliance space, for instance, authorised officer appointments occurring on a ‘whole of class’ basis rather than as an individual and named officer to support rapid surge deployment; and conducting remote inspections and audits.
For many, the pandemic has by necessity forced regulators to accelerate digitalisation programs, to their benefit.

2. Visible leadership

Visible leadership really matters. Although regulatory leaders can often no longer literally ‘walk the floor’, their leadership is more important than at any other time. The Compliance in a crisis conversation revealed:

Early, frequent and clear communication (internally and externally) is vital.
This is about clarity of mission and task in a fast moving, volatile and complex environment, and to ensure team members have permission and knowledge about seeking support.
Leaders need to delegate sufficiently to their managers to ensure they have the confidence to make decisions on allocating people, resources and priorities.
As the pandemic drags on, people are becoming increasingly stressed and weary; leaders need to keep focus on their own and their team’s mental health and physical wellbeing.
Leaders need to be constantly aware that particularly for people at the frontline (i.e. dealing with COVID-affected people), and unlike in natural disasters, there is no respite from the strain, as they also must deal with the constant risks to their own and their family’s health.
Equally, however, the pandemic has served to emphasise the commitment of regulatory teams to the public good and their passion to be mission-led, rather than function-led.
It will be important to continue to recognise and harness these positive motivations and behaviours even when the pandemic is behind us.
In increasingly volatile and uncertain environments, leaders need to focus on building organisational resilience and nurturing adaptive leadership to respond to external shocks more effectively. As crises become more frequent and unpredictable, these foundational values and attitudes will be increasingly called upon.

3. Good relationships with peers

Participants agreed that it is critical to build your relationships with other regulators in ‘peace time’, because it is too late by the time ‘war’ breaks out. The Compliance in a crisis conversation revealed:

Sharing of staff, knowledge and intelligence across regulators was much smoother where relationships of trust, value and reciprocity were already in place and not being stitched together on the run.
While differences in regulatory cultures, postures and focus (compliance versus harm prevention) are inevitable, prior relationships enabled greater identification of shared issues, experiences and roles – which in turn aided in reducing inconsistency and duplication of effort.
The pandemic has brought home to regulators how important it is to have a detailed understanding of the broader regulatory landscape in their jurisdiction and the skills and competencies of other regulators apart from one’s own. This made reaching out for a ‘surge’ workforce faster and easier.

4. Co-ordinating and collaborating

Some regulators have set up multi-agency groups as a forum for shared decision making and coordinated implementation around the pandemic and have documented and embedded them as a resource for the future. The Compliance in a crisis conversation revealed:

The pandemic has highlighted the longstanding issues of regulators needing to share intelligence – informally as a matter of course but also more formally, through MoUs (Memorandum of Understanding).
These may need to be driven bottom-up by on the ground regulatory practitioners, to overcome the reluctance of more senior and remote players.
It was also observed that effective co-ordination needs the right players at the table, to ensure both strategic insights and connection with broader government are brought together with deep operational knowledge.
When regulators come together to share tasks either across a geographic area or a sector of duty holders, it is critical to agree and document who leads and who follows, who does what and who is responsible for what.
This was already familiar territory for many regionally-based regulators, who need to rely on other regulators where they themselves lack a regional presence.

5. Recognising that regulation is a transferable skill

Regulators tend to overestimate their specialised knowledge and differences from other regulators and underestimate the degree of commonality between all regulators. The Compliance in a crisis conversation revealed:

The necessity for rapid deployment and induction of authorised officers from other regulatory agencies has strongly brought home the transferable, broadly based skills of regulatory professionals and the strengths in disciplined problem-solving and structured discretion they can bring to areas other than their own.
This in turn reinforces the rationale for the ANZSOG/NRCoP, with its focus on advancing regulatory professionalism and the regulatory craft.

6. Defining compliance

Understanding what ‘compliance’ means to different regulators in different contexts is critical to working together. The Compliance in a crisis conversation revealed:

Even when regulators are committed to working together, they need to document clearly and explicitly what ‘compliance’ and ‘non-compliance’ mean in terms of how they advise, monitor, enforce and potentially prosecute, and what protocols and approaches will govern their respective activities.

7. Maintaining core operations

There is a need to make sure we do not lose sight of business as usual. In the throes of a crisis, it is easy to forget the harm which ‘ordinary’ non-compliance can do to individuals and the community. The Compliance in a crisis conversation revealed:

Regulators have needed to ensure normal recruitment and core business operations are not neglected, creating a huge backlog for when normal transmission (‘business as usual’) resumes, and limiting the capacity to provide backfill and support for depleted and exhausted front line teams.
Critical harms are still out there, as well as new and emerging ones; their impact may be equal to, or more significant than, the pandemic.
It is also important to ensure that staff not deployed to COVID-19 related work and still on usual duties do not feel undervalued and unimportant.

Participants’ responses

Participants rated the workshop and this report at a pleasing 4.3 out of a possible 5.0 on the question of its value in exploring the topic and capturing key insights for the broader NRCoP.

In terms of the experience of the workshop, one participant commented:

‘I thought Adam [Beaumont] was particularly good at drawing out the information and identifying the commonalities between the different regulators. Prior to the discussion I had wondered how much I would have to contribute as we are such a new regulator but in fact, I felt I had a lot to contribute as well as learn. Thanks for the opportunity.’