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You probably instinctively know at least some of the importance of keeping your organisation compliant with the wealth of applicable internal and external regulations and policies. After all, laws and regulations are put in place for a reason, or several reasons – including to better protect those who engage with your business, and to preserve the integrity of your industry.
But there are also a lot of such laws and rules out there, and it can seem at times as if they are constantly proliferating.
So, what are the best ways to effectively manage the compliance risks that apply to your organisation, now and in the future, without becoming overwhelmed?
What is the end goal?
It might seem obvious what the ‘end goal’ is when you are looking to manage compliance risks; you will be doing everything possible to ensure your organisation is well-informed on the rules and regulations to which it is subject right now, including any new ones coming on stream.
Sure enough, you should have processes in place for assessing your business’s current state of compliance, and putting in place actions if it is noticed that you are at risk of falling out of compliance.
But in today’s world, it is becoming increasingly acknowledged that organisations must be more proactive, rather than largely reactive, in their management of compliance risks.
So, you should be looking to build an integrated and risk-intelligent compliance model for your organisation. By that, we mean one that allows you to keep compliance risks in check at every level of your organisation, and that therefore doesn’t expose your business to bigger risks than necessary.
Start with a risk assessment
In order to start managing your company’s compliance risks without wasting resources, you will need to begin by undertaking a risk assessment.
This will help identify what your own organisation’s compliance risks actually are, and the extent of those risks, so that you can devote the greatest focus to those areas of your organisation that present the most significant risk.
Take action in response to any significant findings
Of course, if anything emerges from your risk assessment that poses an ‘emergency’ risk concern, this ought to be tackled first, with informed and tailored action.
But you will also need to look up and down your organisation, including at those aspects that might not seem to present the greatest risk now, but which could prove more challenging to manage in the future.
This is likely to involve creating and putting in place the right policies and procedures, and assigning responsibility to certain team members, to help ensure your organisation takes that aforementioned proactive approach to keeping on top of its compliance obligations.
Be mindful of compliance risks from third parties
One of the biggest areas of compliance risk for almost any organisation, is its dealings with third parties. Of course, the exact level and nature of compliance risk that your own business’s engagement with third parties presents will depend on such factors as your company’s size and type. But given that even the smallest firms will deal with third parties to at least some degree, this is an area of your organisation’s compliance risk management that you simply cannot avoid.
So, don’t avoid it! Ensure that your business carries out at least some due diligence on every third party it engages with. You may not have been aware, for example, that most bribery legislation around the world treats companies as liable for bribes that intermediaries pay to national officials.
But in addition to being thorough, your business’s due diligence processes will need to be as streamlined, efficient, and straightforward as possible for your employees to manage.
Understand the latest policies
When we refer here to ‘policies’, we are not just talking about the ‘letter of the law’ – whatever rules and regulations apply to your organisation right now – but also about relevant bodies’ policies in relation to enforcing those rules and regulations.
You will probably be aware that managing compliance risks means having to keep up to date with the latest laws and rules when it comes to such matters as data protection, anti-corruption, export control, and many more. This is especially true if you are seeking to manage such high standards as ISO Compliance.
But does your business also keep itself informed on the associated guidance and enforcement policies issued by regulators – and just as crucially, does it understand them?
A given enforcement agency, after all, might exercise significant discretion in terms of the circumstances in which it investigates and takes action against an organisation for the breach of rules. Being knowledgeable about this must be another key component of your company’s compliance risk management.
Build a culture of ethics and compliance
We touched above on the importance of your business not being merely reactive to whatever the latest rules, regulations and policies are that have been implemented by the relevant regulators and enforcement bodies.
One reason why being merely reactive can be a problem, is that it doesn’t necessarily help your organisation to ‘futureproof’ its compliance risk management approaches in a fast-changing world.
There can be a tendency for some firms to get lost in the intricate and complex details of how to achieve compliance in a particular area, or with a specific rule. But what your organisation also needs to be doing, is developing an all-encompassing culture of compliance and ethics.
Personnel at every level of your organisation should be great believers in the importance of compliance, for reasons beyond simply wishing to avoid being penalised for a breach.
And that culture needs to be created and disseminated from the top, with senior leaders driving the embedding of compliance and ethics into the core of the business, instead of simply treating compliance risk management as a tick-box exercise.
Ensure people feel that they can speak up
Another reason why your organisation should place a great emphasis on building a strong ethics and compliance culture, is because this can often prove the ‘last line of defence’ within many organisations when other compliance safeguards fail.
Take a moment to think about human nature; even with a lot of well-intentioned and carefully considered rules and procedures in place for managing your business’s compliance risks, if a crucial individual employee is less-than-well intentioned, they could have a lot of power to circumvent your company’s internal controls.
And when that does happen, you will want other people within your organisation to feel that they can speak up if they do see signs of misconduct by other staff. If, instead, they fear that they could lose their jobs or be marginalised within your company as a consequence of blowing the whistle, this could pose immense compliance risks to your business.
Continuously monitor and update your compliance efforts
You will probably feel you know already that compliance management is not a mere ‘tackle it once, and it’s done’ process. However, amid the rush and pressures of your organisation’s day-to-day operations, it can be easy to allow the ongoing monitoring and updating of your business’s compliance efforts to fall by the wayside.
Yes, by this point you will have hopefully written up well-judged internal policies, and put in place processes that are ‘built to last’. But you will also need to evaluate your company’s policies and procedures on a regular basis, so that you can be sure they are still making the desired impact.
Your risk assessment, for example, should be a ‘living’ document that can be continually and easily updated in line with the changing compliance risk situation for your business, instead of being left marooned and abandoned in a spreadsheet.
There may also be times when it seems right to elevate your business’s existing compliance arrangements – for example, if you are looking to acquire another company or enter a new high-risk market. Again, you will need to have a strategy for assessing and implementing this.
Free up time and resources using automation and software
If all the above tasks seem like they would be difficult and overwhelming ones to keep on top of, this is precisely why you would be well-advised to look carefully at the specialised software solutions on the market that could greatly help you to free up crucial business time and resources.
Our own Vision Pro platform incorporates various features that can be instrumental in making your business’s compliance risk management simpler and less stressful. These range from an easy-to-use and clear dashboard and the ability to assign audits to various assets, to auto notifications when a potential compliance risk on your premises needs to be addressed, and modules covering such specific areas of risk as fire safety, legionella, and asbestos management.
Would you like to learn more about how Vision Pro could aid your compliance efforts, and even book a demo? If so, we would be delighted to hear from you; please don’t hesitate to call us today.