Discover essential insights into compliance management, from identifying legal requirements to implementing controls that ensure adherence to regulations and safeguard the company’s reputation.
Compliance management is the systematic process organizations follow to ensure adherence to laws, regulations, standards, and ethics. It involves identifying requirements applicable to the industry, developing strategies that align with internal policies, implementing measures to meet goals, and continuous monitoring to address noncompliances. Compliance efforts should occur throughout the organization’s lifespan and be regularly reviewed to remain up-to-date as regulations and standards evolve.
Regulations and standards play a crucial role in protecting people and their environment. While some companies find these as impediments to their operations and profit, there is no denying their significance.
The key to success is collaborating with government agencies and industry leaders and creating compliance-related methodologies to abide by the rules that shape the business landscape. Here are the top reasons why compliance management is vital for organizations:
World-renowned Edinburgh Airport and highly acclaimed restaurateur Trippas White Group understand the importance of operating within the legal framework despite its stringency. By upholding best practices, maintaining quality in every single workflow, and utilizing a digital solution that streamlines compliance tasks, these companies ensure safety, security, sustainability, and customer satisfaction.
The first step in compliance management is understanding its key components. These are essentials when creating a framework the organization can use to guide them when executing compliance-related tasks.
This is the foundation of compliance management as it outlines the rules, guidelines, and expectations so employees can ensure lawful and ethical conduct. Policies provide clear instructions on compliance-related matters, including workplace safety, data privacy, and anti-corruption. Procedures detail the steps workers need to follow so they can abide by operational and ethical guidelines.
Policies and procedures should be well-written and clearly defined as these standardize organizational behavior and provide a reference point for employees when navigating complex compliance issues.
This process involves identifying, analyzing, and evaluating potential risks that may impact the organization’s operations. By conducting risk assessments, managers can understand the risks better through quantitative and qualitative analysis and prioritize their resources and efforts. Here are some factors to consider:
Training programs are essential so employees can fulfill their obligations effectively. These inform employees about relevant laws, regulations, internal policies, and the consequences of noncompliance.
Compliance training should be targeted, depending on the industry, the location of the operations, and the workplace culture. Despite the gravity of the subject, companies should deliver engaging courses to increase participation from workers, subsequently empowering them to make informed choices while they execute their daily duties.
Companies should be able to track compliance activities, detect potential violations, and take corrective actions as needed.
Regular monitoring involves reviewing compliance processes. It ascertains that every team member follows the established policies and procedures. Reporting mechanisms allow employees to speak up when they observe negligence or outright violations, confidentially or not, without fear of retaliation.
By establishing a robust monitoring and reporting system in place, managers acquire timely insights into the company’s performance and intervene proactively to address issues before they escalate.
Internal controls are procedures implemented to mitigate risks, ensuring compliance with regulations and standards. These are three main classifications to take note of:
By establishing robust internal control frameworks, organizations can reduce the likelihood of compliance breaches, enhance operational efficiency, and demonstrate accountability to stakeholders.
Empower your team with SafetyCulture to perform checks, train staff, report issues, and automate tasks with our digital platform.
There is an inordinate amount of laws and standards that govern companies across industries. Some are straightforward. Others are more complex. All of them undergo changes as the business landscape evolves. Knowing which applies to the company is a critical step in developing the company’s compliance management system.
Regulatory challenges are inevitable. However, with a firm foundation and carefully thought-out systems, the company can comply with these laws and sail through regular audits. These best practices can also help:
Regulations are necessary because these protect stakeholders and their environment and promote a fair business environment. No one disputes the challenges companies may face, but by implementing the best practices, they can successfully foster a culture of compliance within the organization. Partner with SafetyCulture (formerly iAuditor) to develop robust compliance systems and execute the necessary workflows:
Everyone in the organization plays a pivotal role in ensuring alignment with legal and regulatory requirements. Large conglomerates with global operations usually form a team that oversees company-wide efforts, including interpreting and integrating relevant laws into the internal policies and procedures, assessing risks, submitting documentation, and identifying areas for improvement.
Although only a few get reported, Harvard Business Review states that cases of corporate misconduct occur too often despite establishing compliance systems. While there are many reasons for failure (e.g., lack of monitoring, reporting, and evaluation systems), many experts zoomed in on the lack of targeted and engaging employee training. When workers perceive compliance as merely ticking boxes of what to do or not to do, they will never put their training into practice.
Expanding the company’s operations in other countries comes with numerous compliance risks. Conducting research on region-specific requirements (e.g., localized rules, language laws, security protocols) is the first step. Aligning the organization’s values with the culture and expectations of their second home will also help considerably.
While these two are closely related, they are completely disparate concepts. Compliance, focusing on adherence to laws, aims to prevent violations and consequent penalties. On the other hand, risk management seeks to minimize the overall impact of uncertainties. By working on the latter, companies can accomplish the former more efficiently.
Eunice Arcilla Caburao
SafetyCulture Content ContributorEunice Caburao is a content contributor for SafetyCulture. A registered nurse, theater stage manager, Ultimate Frisbee athlete, and mother, she has written a wide range of topics for over a decade. Eunice draws upon her rich, multidisciplinary background to create informative articles about emerging topics on health, safety, and workplace efficiency.
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