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Corporate Compliance

Corporate compliance

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152 views3 pages

Corporate Compliance

Corporate compliance

Uploaded by

pinakshi de
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Corporate compliance

Corporate compliance should be an essential part of your business operations, regardless of industry.
How does your business manage compliance and mitigate risk? Taking preventative measures can feel
like a hassle upfront, but it can save your organization untold costs in the long run. Corporate compliance
violations can result in fines, penalties, lawsuits, loss of reputation, and more.

What is corporate compliance in business?


The definition of compliance is “the action of complying with a command,” or “the state of meeting rules or
standards.” In the corporate world, it’s defined as the process of making sure your company and
employees follow all laws, regulations, standards, and ethical practices that apply to your organization
and industry.

Corporate compliance covers internal policies and procedures, as well as federal and state laws.
Enforcing compliance helps your company prevent and detect violations of rules, which protects your
organization from fines and lawsuits.

The compliance process should be ongoing. Many organizations establish a program to consistently and
accurately govern their compliance policies over time.

What is the purpose of a corporate compliance program?


The purpose is to protect your business. It’s as simple as that. But the return on investment could be
significant, helping you avoid waste, fraud, abuse, discrimination, and other practices that disrupt
operations and put your company at risk.

Your corporate compliance program needs to be integrated with all compliance efforts enterprise-wide,
from the management of external regulations and internal policies to comprehensive employee training.
By making sure all departments and staff are working together to maintain standards, you can mitigate
the risk of major failures and violations.

An effective program improves communication between leadership and staff. It should include a process
for creating, updating, distributing, and tracking compliance policies. After all, employees can’t be held
responsible for rules and regulations they don’t know exists.

But once they understand expectations, your staff can stay focused on your organization’s broader goals
and help operations run smoothly. What’s more, when employees are properly trained on compliance
requirements, they are more likely to recognize and report illegal or unethical activity.

Maintaining compliance equips your employees to do their jobs well, reach their career goals, and keep
customers happy. In turn, your company can achieve its goals and grow faster. In the unfortunate event
that your organization faces a lawsuit, your corporate compliance program will help in court.

As one report from Rutgers School of Law explained, “An organization that has made a robust effort to
prevent and detect violations of the law by its employees and others acting for it will be treated less
harshly than one that was indifferent to complying with the law.”

How to create a successful corporate compliance program


Very few businesses can afford to procrastinate on a corporate compliance program. Don’t let hindsight
be 20/20 for your organization. Have the foresight to take action today.

Your program should be carefully planned and implemented, with coinciding training programs to
guarantee personnel are well-versed in all areas of compliance.

Here are a few steps to establish or refine your corporate compliance program:

1. Get your leadership on board

Your corporate compliance program won’t run itself. One person should be assigned the responsibility of
managing the program day-to-day.

Depending on the size of your organization, you could have one compliance officer or several.
Regardless, those in charge of the compliance program must have the authority to enforce the rules and
hold staff at all levels accountable.

The Department of Justice created a checklist for evaluating corporate compliance programs and suggest
asking the following questions:

 How have senior leaders, through their words and actions, encouraged or discouraged the type of
misconduct in question?
 What concrete actions have they taken to demonstrate leadership in the company’s compliance
and remediation efforts?
 How does the company monitor its senior leadership’s behavior? How has senior leadership
modeled proper behavior to subordinates?

2. Conduct risk assessments

Corporate compliance is about managing risk.

To build an effective program, you need to know what compliance areas pose the highest risks to your
organization. Once you have identified these areas, you can focus your resources on addressing them.

Federal and state regulations, as well as industry standards, are constantly evolving. To avoid risk of
noncompliance, it’s important to conduct regular assessments. The Association of Corporate Counsel
(ACC) suggests conducting a risk assessment once a year.

A formal assessment process, like this one recommended by the ACC, can help your organization be
proactive about preventing corporate compliance violations:

 Audit results
 Recent litigation
 Compliance complaints
 Employee claims
 Industry enforcement trends
 Compliance policies in each risk area

3. Establish and maintain your code of conduct, policies, and standards

Your corporate compliance program needs a well-defined code of conduct. Why? Because it can help
define your program’s purpose and set expectations for behavior.
The code of conduct acts as a foundation and should explain the following key points:

 Who is responsible for managing the program


 How employees should report misconduct
 Disciplinary measures for violating of the code of conduct

4. Properly train all employees

Compliance policy and standards are useless if employees don’t follow them.

After establishing the policies and procedures for your corporate compliance program, you need to
disseminate them to every member of your staff.

Make sure company officers, employees, and third-party vendors read and sign off on all compliance
policies and procedures.

5. Improve your program with compliance management software

Creating or revising your compliance policies and training takes a lot of work. It’s an ongoing process,
requiring consistent monitoring and updates. But don’t wait until an incident has occurred to take action.

If you and your compliance officers are already busy and time constrained, it can be hard finding the right
time to implement a new program. The trick is finding compliance management software that manages it
for you.

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