Compliance refers to the ways in which a company ensures they are following both its own internal compliance structure and all the laws and regulations that apply to its business or industry. Compliance is about more than just following the law. Compliance is often viewed as a necessary evil that hinders business, but compliance is essential to your business’s success. A good corporate compliance program will include a healthy mix of both external and internal compliance. External compliance refers to regulatory compliances – they are the steps a company takes and follows to remain compliant with state and federal laws. They are the response to the rules and regulations set for the industry. Internal compliance refers to the procedures a company follows within its own business to set a standard and maintain a certain level of quality, sometimes referred to as HR compliance. This can include a code of conduct or specific business ethics a company adheres to. The purpose of compliance goes beyond following the letter of the law.
Compliance Essentials
Compliance Is Much More Than Just Something That Facilitates Your Business: Compliance provides real value by offering the business a more comprehensive cost-benefit analysis that incorporates compliance-related costs. Most companies believe that their compliance efforts help reduce the legal cost and resolution time of regulatory issues and fines. Compliance is as much about prevention as much as it is about obeying the law. Whether you’re dealing with corporate or regulatory, the right compliance strategy can keep your company out of trouble and protect your employees.
A Lack Of Compliance Can Cost You Millions Of Dollars In Fines And Brand Damage
Fees and fines can cost a company lots of money if it’s found to be non-compliant. Customers want to believe their information is protected and that they are doing business with companies practicing legally and ethically. Compliance violations can turn customers away. The damage to brand reputation can often cost even more than those fines.
Strong Compliance Can Make Your Business More Competitive
Strong compliance slashes business risk due to unvetted partners and can empower new revenue streams in new markets as that risk is reduced. This is an advantage over competitors who lack the ability to vet third parties well.
Stay on track with changing laws and regulations
Compliance is a continuous process of scanning for changing laws and regulations, identifying the areas in which it impacts your organization, changing policy and implementing policy change, and monitoring. Making sure to identify which laws and regulations apply to your organization helps you stay on top of changes. When you’re prepared for upcoming changes, you don’t risk being overwhelmed when new legislation starts being enforced.
Ensure employees follow procedures
Company policy is not worth anything if it is not followed by employees. Make sure to communicate company policy and procedures well. Part of this is to ensure that they are well documented and readily available for reference- both digitally and physically. Furthermore, employees should be compelled to understand why policies and procedures are the way they are, or why they have changed. It may also be necessary to implement employee training on how to properly adapt procedures. And lastly, you may want to think about implementing a reward system for employees who comply and develop sanctions in case of violations.
Involve specialists to guide the implementation of compliance
Small and growing organizations may unintentionally break laws, due to a lack of knowledge or awareness of the law. To prevent this, ensure that the organization is transparent in its operations. Furthermore, it is advisable to hire specialists or involve consultants to be sure that everything is in order. This allows owners and employees to ask for advice when needed, to ensure actions and procedures are compliant.
Compliance can provide the ethical center of gravity that influences the entire organization. This is the reason compliance is the new global focus for Strategic Deals as it can make or break your company or deals.
The DocullyVDR team is a provider of a new generation secure data sharing platform designed for businesses. The team has extensive experience in working with document sharing platforms and has been assisting the Virtual Data Room community since 2019 by providing users with free information.