Cliques in organisations aren’t just irritating social dynamics. They’re a compliance problem. When a few people form an inner circle, the controls and reporting structures you’ve spent time building start to bend around them.
Information Gets Stuck
Compliance relies on full and timely information. Cliques filter it. If updates only circulate within the group, the record becomes patchy, and reporting gets distorted. Gaps like that don’t stay hidden from regulators for long.
Speak-Up Culture Erodes
Policies and whistleblowing hotlines don’t mean much if people believe raising concerns will get them frozen out. Where cliques dominate, people outside the circle think twice before flagging an issue—especially if the clique is close to management. That silence is risk in its purest form.
Conflicts and Favouritism
Inner circles skew decision-making. Promotions, oversight roles, even risk assessments can tilt toward protecting “our own.” The result is conflicts of interest hidden in plain sight. Regulators now expect independence and transparency in governance. Cliques chip away at both.
The “Not My Fault” Culture
Cliques are fertile ground for blame-shifting. Mistakes are minimised, pushed onto outsiders, or buried within the group. That “not my fault” culture cuts directly against regulatory expectations of individual accountability. It’s the opposite of what directors’ duties, fit and proper tests, and personal attestations are built on.
When Bullies Project
Cliques often shelter bullies. And when bullies project their own shortcomings onto others—labeling outsiders as “difficult” or “non-compliant”—the compliance risk multiplies. Real breaches can be masked, while false narratives shape decisions and reporting.
This is where procedural fairness matters. Compliance means being transparent about the source of accusations and giving the right of response. Without that, cliques weaponise innuendo, and decisions get made on whispers instead of evidence. Regulators view that as bias and a breakdown in governance.
Culture Counts with Regulators
Supervisors now measure culture as much as compliance. Visible in-groups and out-groups tell a story: tone from the top is weak, controls aren’t embedded, fairness is lip service. In enforcement cases, cliques have been treated as evidence of poor governance.
Reputational Fallout
Cliques also drive HR complaints, bullying, exclusion, discrimination. Once those stories surface, they undermine claims of integrity and respect. It’s hard to hold external trust if you can’t hold internal trust.
Bottom Line
Cliques aren’t harmless. They block information, undermine controls, protect conflicts, project blame, and breed a “not my fault” mindset. When they override procedural fairness, the risks compound.
The fix isn’t banning friendships. It’s making sure the organisation’s culture rewards openness, accountability, and fairness, values that leave no oxygen for inner circles to quietly run the show.