Our increasingly complex business environment is becoming more highly regulated than ever before. Constant refinements in safety standards, accountability, workflow and quality control could come from government, industry associations, or your own internal policies. Keeping up with regulatory compliance can be overwhelming, time-consuming and expensive.
However, as Ina Kroi, Head of Compliance Services at EASE S.A. says, “often compliance is considered as ‘not profitable’ for the companies as the time spent on this type of work is not directly chargeable to the clients and has a lot of paperwork which ‘bothers’ the clients.”
But any expense to ensure compliance is worth it. A serious breach will be penalised and could attract bad publicity. The damage to a hard-earned reputation can be hard to repair. And some breaches will bring hefty fines.
A dedicated role
Many larger organisations appoint a compliance officer to keep abreast of changes in regulations, to organise training for workers in new procedures and standards, and to ensure legal compliance in the company’s products and services. It’s a role that helps companies manage risk, project a positive reputation, and avoid expensive lawsuits.
The officer will study the full financial impact of changed regulations, recommend new internal procedures, and communicate with management. Typically a compliance officer is responsible to keep the company’s business dealings ethically sound, and on solid ground legally.
Recruitment consultancy Robert Walters refers to two levels of responsibility:
Level 1: compliance with the external rules that are imposed upon an organisation as a whole
Level 2: compliance with internal policies and procedures that are imposed to achieve compliance with the externally imposed rules
Compliance from the top down
Before engaging a compliance officer, the top levels of management need to develop a culture of compliance. “A compliant organisation could have a board that demonstrates commitment to compliance, along with the policies, culture and conduct of its people. That message is reiterated through management, so everyone is showing a commitment to compliance,” says Nathan Robinson of risk management consultants KPMG.
Knowing that compliance is expected at every level of the company, new recruits will more easily fit this environment.
Ina Kroi recommends that if the appointment of a permanent compliance officer is not possible, then at least one person should be put in charge of compliance operations. They will need training to do so.
While this may initially be costly, the long-term benefits could be the survival of your company.