Strengthening Compliance Through Leadership, Ethics, Transparency, and Cultural Capital.

The paper provides a practitioner’s perspective on the compliance deficiencies in banks, which are deep-rooted in the cultural deficit and ethical vacuum. It delves into the behavioral dimensions and suggests ways to strengthen the efficacy of compliance through leadership, ethics, transparency, and cultural capital. It underlines that compliance deficiencies arise chiefly because of the gap between stated and realized organizational ethos, ethical vacuum, and leadership conundrums. Lack of the desired tone and action from the top, and weaknesses in the ethical foundation of organizational behavior lead to a deterioration in the effectiveness of compliance. It examines what it takes to achieve and nurture cultural capital and strengthen trust and finds that knowing the theory is not sufficient and one must have a strong ethical cultural capital and sound leadership. An organizational fabric built on integrity, inclusivity, independence, ethics and transparency, though difficult to put in place and sustain, once ingrained in the organization’s bloodstream, makes it natural and spontaneous to have an effective compliance and governance system. [ABSTRACT FROM AUTHOR]