Your business, whether large or small; and regardless of the industry it operates in, is charged with operating ethically and in a compliant manner, a task placed upon compliance officers. The needs and burdens placed on the compliance profession, will never fully be satisfied or dissipate. In fact, they seem to increase, as portrayed by the ever-changing legislation and regulations you need to stay up-to-date with.
As a compliance officer, you are aware of the value of having a strong compliance program to mitigate risks in your business. However, what is observed less, is that these compliance programs not only protect your business from risk, but actually benefit your business.
While there may be increasing costs in compliance - particularly where there is a new compliance requirement, update, or other system required, there are several advantages to doing business the right way and the weighting per benefit varies depending on the industry you operate in.
No business wants to face criminal charges for not obeying the law and as such, this is perhaps, the most important benefit of compliance in your business.
With so many different regulations and laws governing how your business should operate in terms of the environment - managing finances, your employees’ and customers’ personal information to name but a few - your business needs a strong compliance function.
With proper compliance management that monitors all the compliance guidelines, issues, cases and projects, you help your company to stay on the right side of the law. One exemplary way to manage your compliance function, is to use the Generally Accepted Compliance Practice © (GACP) framework which consists of principles, standards and guidelines that act as a benchmark for compliance best practice that you should apply.
All companies face significant strategic risks. These range from the operational to the financial and are exacerbated in highly regulated industries.
Remaining compliant means you can avoid legal troubles and fines which can cost your business millions. Not only will this negatively affect the business’ cash flow, but its operations as well.
There is also the reputational cost to the company that you need to consider. Although not a quantifiable cost, the public attention and negative perceptions will adversely affect business. Not to mention any disruption that comes from investigations, recalls, and corrective actions. Good compliance reduces organisational reputational risk.
In addition, a report by Marsh & McLennan Companies indicates that regulators are pursuing cases of negligence where the Chief Compliance Officer was neither involved in, nor aware of the wrongdoing. CCOs are increasingly concerned that their personal assets may be at risk if regulators pursue them for unintentional wrongful conduct 1.
An effective and efficient compliance program is fully integrated into a broader risk management program and will curtail the risks your business and staff may face if you’re found noncompliant.
Your compliance program should be strong enough to help prevent errors or failures before they occur. Subsequently any errors that do occur can be detected early and corrected.
When you eliminate the need to repeat tasks, your business operates more efficiently by saving time and money, contributing to your company’s bottom line.
When cutting duplication and streamlining functions, roles and activities, the result is a more efficiently run business.
The more you embed a culture of compliance into your business operations, the more efficient tasks become. Operating personnel take greater ownership of compliance, which helps spread the culture further.
In turn, compliance becomes everyone’s business, reducing the need for a larger “compliance police force” at the end of the chain. When employees are checking their work to ensure compliance, it becomes a more efficient, real-time process, rather than an after-the-fact review and clean-up process.
In addition, the compliance function also shines a light on activities that may be inefficient, more frequent than necessary, or simply inconsistent with your company’s mission and purpose. This results in making better business decisions and important savings, that can get diverted and invested into more meaningful programs.
When you have a clear, effective and broadly communicated compliance program in place, you convey a message that your compliance is a top priority for your company to key stakeholders and regulators. Not only does it show your commitment to doing business the right way, but also demonstrates your expertise related to all relevant laws and regulations.
The perception of your company will be a favourable one. Customers, employees, vendors and other stakeholders who acknowledge your commitment to compliance, have a higher overall feeling of trust, that your business conducts itself with the highest ethical standards. This leads to brand loyalty.
An added advantage is that if you’re known for always following clear policies and guidelines and abiding by high ethical standards and practices, you may even receive a good reputation with the regulators.
Most mission statements and value propositions include information about corporate responsibility. They not only address external laws and regulations, but also the company’s internal policies and guidelines as well.
Therefore, when properly designed, your compliance program will help your company act in a way that is guided by your values and will help attain your organisational goal.
Job seekers look for companies that are virtuous and display good values in the industries they operate in. With a strong compliance function and a good reputation, your company benefits by being able to attract and retain great talent. In turn, this lowers your turnover and recruitments costs.
Achieve greater productivity with compliance
The best compliance professionals not only have to be experts in their field, but must be outstanding communicators to ensure they can effectively influence and motivate colleagues.
With the right compliance tools and membership to the Compliance Institute of Southern Africa, your company can achieve all the aforementioned benefits and work towards higher productivity and increased brand loyalty.
Register as a member of the Compliance Institute of Southern Africa today and Demonstrate specialty skills in compliance and risk.