In the modern era, with the ever-increasing demands of the corporate industry, the issues and challenges facing modern day professionals are also increasing with many finding it quite difficult to face such challenges head-on and overcome them. Issues and challenges are a part of life and facing them with utmost determination defines and shapes the character of an individual. This article discusses choosing between Compliance or Client which is considered to be a tough decision to be made by a professional and attempts to provide an insight into making such tough decisions a bit uncomplicated.
Modern Day Professionals typically realize themselves in an exceedingly state of affairs that demands a tricky call to be created – A state of not knowing what to decide; A state of uncertainty, hesitation or confusion. One classic example is to decide between ‘Compliance or Client’ wherein, if one chooses the former, he may end up losing the latter and vice-versa. What comes first? – is it the Client? OR is it Compliance? One may argue that Client comes first for the reason that if there is no Client, there is no question of Compliance. Counter Argument could be that if there is Compliance, there is Client. – A typical ‘Chicken and Egg’ situation. Client does come first in the dictionary but that should not be an influence in real life.
Compliance, in common parlance means the act of working in accordance with the set of laws. One should not even give a thought on compromising compliance as the cost of non-compliance is much higher than the cost of compliance. Workarounds, even though possible by letter, should be avoided as it essentially defeats the intention of the law and the lawmaker. One cannot and should not hide behind the error of a draftsman. ‘Lost in Transliteration’ is quite a thing these days!
Client, on the other hand simply wants to run his business in the quickest, easiest and the most profitable manner. Workarounds are typically quicker and easier and one might be tempted to go for it in order to impress the client and possibly maintain the relationship. In a situation calling for choosing either “Compliance” or “Client”,
professionals may simply consider the following before making a decision –
Choosing ‘Compliance’ Choosing ‘Client’
No need to worry about consequences Need to worry about consequences
More satisfaction, less tension Less satisfaction, more tension
Self-belief and inner peace Self-doubt and disbelief
Long-term sense of contentment Short-term sense of contentment
Possibility of losing client Possibility of facing regulatory action
The list can go on and on.
In the words of Thomas Jefferson – “Honesty is the first chapter in the book of wisdom.
One must constantly work towards achieving the highest possible level of compliance. Compliance not only in letter but also in spirit. As much as it is important to do the right thing, it is equally important to do it in the right manner.
For instance, providing food to a person in desperate need is a right thing to do, but, stealing from someone and providing it to the needy cannot be said that a right thing has been done in the right manner.
Good Governance or Good Corporate Governance is a key factor in the rise and fall of any business. Choosing a client over compliance is like a vicious circle; for once, a decision is made to satisfy/ impress the client, the same will be expected each and every time. As the word of mouth spreads quicker than fire, opportunities available to the professional in the future may also compel him to choose client over compliance.
Soon, this may become a way of work which will invariably lead to an inexorable end. One must remember that law is here for a purpose and there is no escape.
According to A Dictionary of Basic Legal Terms,
law is “the regime that orders human activities and relations through systematic application of the force of politically organized society, or through social pressure, backed by force, in such a society.”
Laws are enacted based on historical trends after considering the interests of all stakeholders involved and are also evolving with changing trends. It is commonly understood that the purpose of law is to promote justice. The purpose of law is to prevent injustice. It is there to prevent harm, not to encourage or mandate good. One might wonder what harm or injustice can be caused due to workarounds?
Well, defeating the intention of the law by hiding behind an error of a draftsman may be beneficial to the client in some way or the other, while the said benefit will not be available to the law-abiding competitor – an unfair advantage though it has its own risks associated with it. Current generation of laws are focusing more towards principle-based regulation than rule based as it is widely accepted that principles serve as a foundation for belief-systems and will help in improving the overall governance. Principles are the ideologies which have a much wider scope than rules and principles will always prevail over the rules as the latter can also be said to be derived based on the former.
Professionals occupy an important position in the corporate world as they are treated as experts in their chosen field and are entrusted with significant responsibilities by law. Statutory and Regulatory authorities as well as the general public rely on certifications by professionals, thus it calls for real integrity and honesty on the part of the professional. Whatever one does must stand the test of time and situation. However, there may be compelling situations or circumstances under which one might choose a client over compliance. These could among other things be coercion, financial condition or plain inability to say ‘No’. Inability to say ‘No’ is more of a psychological thing often developed by individuals due to the society or culture they are in. It can be regarded as a weakness which one can overcome by putting-in conscious efforts towards changing the mindset. Many people fail to say ‘No’ because of the fear of its consequences. Such ‘no’-averse people end up living in their shell and pleasing others at their own expense. Often, such people become so comfortable in their shell that they tend to lose their desire to break the shackles or sometimes even fail to notice their shackles and when they do notice, it might be too late. Breaking the shackles here does not mean going in all guns blazing, instead, the approach should be such that the harmony is maintained between the professional and the client. One should not be afraid of speaking out their mind or discussing issues faced by them with the ones they trust. Speaking out will always release the tension and clear the mind which will allow the individual to relax and make a better informed decision. Majority of the time, a simple ‘no’ instead of a ‘yes’ will avoid all the unforeseen hassles one might have to face in the future by acceding to the request.
Compliance almost always seems unnecessarily complex and too much at the start, however, over time, it finds its place and following the process becomes automatic – almost subconscious. It should not be seen as a burden but as a way of conducting business responsibly. Compliance is long term – benefits of which are endless and timeless. Professionals should be the flag-bearers of governance. If there is governance, there is compliance but vice-versa may not be true. Efforts should always be taken by professionals to persuade the client to choose the path of compliance. This can only be done if the professional himself firmly believes in following the path of compliance.
Generally, professionals are the ones who provide ‘solutions’ to clients and also vouch for a change in overall governance culture. Efforts taken by the professionals will help not only the client but also the overall industry culture. Even if the mindset of a single client shifts towards compliance due to the efforts of the professional, it is a job well done. It is important to also understand the point of view of the client as well, what could be the reason that is compelling him in the first place to avoid following the law in letter and spirit? Maybe, the reasons could be genuine difficulties in following it, here it is the professional who needs to explain to the client and possibly make him understand that genuine difficulties can always be raised at appropriate levels for consideration and request for necessary clarification(s)/ amendment(s), as required. Once people start to appreciate being compliant and work consciously towards it, a new era will begin. A shift in the mindset from ‘getting things done’ to ‘getting things done in the right manner’ is the need of the hour. What cannot be done directly cannot be done indirectly as well. Similarly, the general consensus that, what is not proscribed is prescribed i.e. if it is not prohibited by law, it can be done also needs a re-visit. This shift in mindset is by no means unachievable, it only requires constant and tireless collective effort to be put into it – Easier said than done though!
Compliance may be divided into Statutory/ Regulatory Compliance and Internal Compliance. The former is what is prescribed while the latter is what one develops over time to inter-alia achieve the former. Internal Compliance may be kept stricter than the prescribed ones so that the Statutory/ Regulatory Compliance will automatically be taken care of by following internal compliance. Being well governed in itself will reduce the risk of non-compliance and the further risk of penalties etc., for such non-compliance. With the recent wave of Start-ups all over the world including in India, which are essentially by young entrepreneurs, professionals must take the opportunity to inculcate the culture of good governance and the importance of compliance in them. Compliance in letter as well as in spirit; as they are the ones who will define the governance culture of the industry in future. This is because they are new in the industry and their mind is an absolute clear slate as regards compliance and governance. Whatever is inculcated in them at the very beginning, will most likely be carried by them forever and has a good chance of being passed-on to the future generations. A seed will be sowed, benefits of which will be reaped in the future.
As discussed at the beginning, choosing compliance over client may lead to the professional losing a client and this fear of losing a client could very well compel one to compromise compliance. A client may be lost but there will be many more waiting to be connected with someone who is firm on compliance. Why does one fear to lose a client? Basic answer to that is loss of client means loss of business which in-turn means loss of income and which in-turn can have numerous further effects in life; in short, loss of client leads to a ripple effect, the impact of which might be overwhelming. Tough decisions are a part and parcel of life – professional as well as personal. Everyone has to make some or the other tough decision in life. Youngsters face a tough decision of selecting a career path – should it be Commerce, Science, Arts or any other field. Some think it through all by themselves, some speak to elders for their guidance while some just go with their heart. It is all about the mindset and selecting the path about which one feels confident enough and has an interest in. Changing the career path midway is also a tough decision to make, it can be regarded as being tougher than selecting the path in the first place itself as selecting a new path means making a fresh start altogether. After putting-in all the time and efforts into one field and switching fields later on demands quite some courage but it is a decision which will help the individual be happier and satisfied with how things are going around him.
Compliance or Client can be regarded as similar to the frequently discussed topic of Substance or Form in the context of Corporate Governance. Should one choose the substance or the form is a tough decision for some while it may be not so tough for others. This can primarily be attributed to the mindset of an individual. However, there should not be a question of choosing substance or form as both of them have an equally important part to play in Corporate Governance. Almost everything every time finally boils down to the mindset. If the mind is in a good place, decisions will definitely be a lot easier to make. Choosing Compliance over Client is not enough. Level of compliance is also to be taken into consideration. Compliance may be treated as ‘apparent compliance’ or ‘absolute compliance’. Apparent compliance is what the client is looking for whereas absolute compliance is what the professional should be emphasizing on. Choosing compliance at the level of apparent compliance essentially means choosing client under the veil of choosing compliance. This will only provide a perfunctory sense of satisfaction to the professional of having chosen compliance over client but the reality is the complete opposite.
Whenever one is faced with a tough decision to be made, one must think through it and avoid making a decision i n a hasty manner. One may consider asking the following
5 questions before making a tough decision:
- Will I regret my decision in the future?
- Is it really worth it?
- Do I really need to do this?
- What am I gaining out of it?
- Is it in sync with my ethics and values?
Answers to these questions should ideally solve the puzzle and make the decision much easier to make. Although, each question is equally important, the question on ethics and values can be given additional weightage as one can simply answer the said question, avoid the first four, and still be able to solve the puzzle.
CONCLUSION
“In the end you should always do the right thing even if it is hard.” – Nicholas Sparks
To do the right thing, in the first place, one needs to decide between what is right and what is wrong. What may be the right thing for one may not be the right thing for the other as right or wrong can be subjective and can also depend on the perspective of an individual.
In other words, the conscience of an individual which influences one’s behaviour has to be in the right place. Doing a wrong thing firmly believing it to be the correct thing cannot possibly justify the fact of having done something wrong. In the context of Compliance or Client, there should not be a question of choosing between the two as both play an equally important part and the professional should wholeheartedly attempt to maintain synchronization between both; and by doing so the professional can be rest assured that he has put-in his contribution towards achieving the greater good.