Why "Compliance Culture" Misses the Point—And What to Focus on Instead

In most organizations, culture gets sliced into competing priorities. HR talks about high-performance culture. Quality focuses on quality culture. Safety owns safety culture. And Ethics and Compliance get compliance culture. 

In the latest episode of the Leading Transformational Change podcast I sat down with Stephen Nguyen, Chief Compliance Officer at GE HealthCare Pharmaceutical Diagnostics with. Stephen thinks this fragmentation is a fundamental mistake. The real work isn't building a compliance culture—it's building a company culture where integrity is fundamental to how business gets done. 

It's easier said than done, but it's a perspective earned through over two decades leading international ethics and compliance programs across incredibly demanding and high-stakes environments in pharma and medical devices: Eli Lilly, AbbVie, Medday, and now GE HealthCare. 

I met Stephen at HETHICO, a European conference for ethics in the pharmaceutical and medtech industry, where I was privileged to speak about how to build cultures that enable performance with integrity. Talking to Stephen, I felt an immediate kinship in our shared view on the vital importance of building cultural health. Cultural health means cultivating an environment where people can perform, thrive, and act with integrity—where vital values like performance, accountability, quality, safety, and integrity aren't disjointed goals but different elements of the same whole. This aligns the culture-building objectives of the executive team, HR, Ethics & Compliance, and Quality functions around a shared vision. 

It's all about people 

What makes Stephen's approach powerful is his conviction that ethics and compliance isn't ultimately about processes, tools, or policies (even though they are of course important)—it's all about people. And when you start from that premise, everything changes. 

When compliance becomes about people rather than checkboxes, you stop satisfying yourself with statements like "we'll install the right compliance culture." Instead, you start doing the harder work of understanding what integrity means for each employee in their daily reality—and what might hinder it. 

Surprise is the enemy 

One of Stephen's core principles is deceptively simple: "In compliance, surprise is the enemy." I believe that is true not only for compliance, but for the entire C-suite.  

No organization is perfect. Every company has gaps. But the worst-case scenario isn't having problems—it's being blindsided by problems you didn't know existed. When you're surprised, you can only be defensive. You can't be preventative. 

This is where the quality of speak-up becomes critical. It's a vital sign of cultural health. As Stephen puts it: "If we're capable to really get the sound of reality on the ground, we are definitely in a much better place." 

But getting that reality requires more than a hotline and a policy. It requires trust—and trust requires action. Too often people have learned that speaking up doesn’t matter. "If people are elevating concerns and we do nothing about that, after some time they will stop. They will simply stop." 

The trust equation 

When I asked Stephen about the most important habit for leaders building cultural health, he pointed to something called the trust equation: credibility plus reliability plus intimacy, divided by self-orientation. 

"The more you are credible, the more you create trust," Stephen explains. "Reliability—if I'm speaking and doing nothing, we have to walk the talk. Intimacy—I need to understand your problem. And divided by self-orientation—if I'm just looking at my own goals, I will not install trust." 

This equation captures why ethics and compliance can't be about rule enforcement. It has to be about creating conditions for healthy dialogue. It requires understanding the pressures people face in the field—recognizing that what delivering results looks like in South Africa might be very different from headquarters in Germany. 

Beyond the grey zones 

In highly regulated industries, there's pressure to create clear black-and-white rules. But as Stephen notes, "when most of our discussion is in the grey, we need to accept some kind of vulnerability." 

That vulnerability—the willingness to acknowledge complexity, to have honest conversations about dilemmas, to admit mistakes—is what makes integrity possible under pressure. Without it, you're left with people navigating ethical complexity alone, hoping they'll make the right choice. 

Stephen's final encouragement is simple but profound: "At the end of the day, if we apply some human principles—empathy, dialogue, communication—we are already in a very good place." Because ethics and compliance isn't philosophical. It's about helping the business perform with integrity. And that starts with recognizing it's all about people. 

Listen to my full conversation with Stephen Nguyen in the Leading Transformational Change podcast to explore these insights in greater depth, including why he believes compliance can be a competitive advantage and how to build ownership at every level of your organization.