The Definitive Guide for Turning Compliance into a Profit Center

This guide examines the challenges that compliance officers face when justifying the importance and value of compliance to the business. read on to learn more about the characteristics and benefits of a well-run compliance program.

The challenge of Perception

Compliance has a reputation problem. At best, compliance feels like a nagging mother, constantly reminding you of rules and regulations. At worst, it’s an obstruction to a “smooth” (yet legally risky) business operation.

But if applied correctly, compliance can become one of your business’ key advantages. It can enhance competitiveness while also protecting the organization from expensive legal or ethical breaches. In short: compliance is an investment, not an expense.

Critical Compliance Questions

  • What are the major compliance issues currently facing the company?
  • Are there any areas where the compliance program lags behind industry best practices?
  • Are employees comfortable reporting potential ethical/ compliance infractions?
  • Where does compliance come in during any sales/merger/ operation workflow?
  • Have executives in the organization ever walked away from a business opportunity over ethical and/or compliance concerns?
  • How do executives view a compliance officer?
  • Is there anyone interfering with the creation of an effective compliance program?
  • Does the compliance officer report to anyone with conflicts of interest for the compliance program?

Evaluation and Accountability

Before any real change can take place, one must examine the business’ current state of affairs and identify areas of concern. compliance officers must ask hard questions about both the organization’s commitment to compliance and the compliance team’s standing within the organization.

If either are found lacking, then the compliance team is rendered ineffective, and the business is at serious risk of a breach. leadership must recognize and fully endorse compliance policies and their enforcement

Optimizing Standards and Controls

In order to build an effective compliance program, one needs more than a list of regulations and responsive policies to enforce. compliance officers need to strike the balance between protecting the business and giving it flexibility to operate.

Under-compliance leaves the business exposed to fines, penalties and lawsuits that result from potential breaches. These are costly and damaging, yet altogether avoidable—if compliance is given proper authority within the organization.

Over-compliance occurs less frequently but has just as much impact on the bottom line. If the business spends too much time “checking the boxes” on unnecessary conditions, it throttles operations and makes the business less competitive.

Effective Training and Education

The more familiar employees are with the relevant laws, policies, and regulations, the less time the compliance team will waste looking over their shoulders. As such, effective training is critical to maximizing compliance’s return on investment.

Live, in-person training gets better results than online or self-directed training because it promotes active discussion of potential risk scenarios and a better understanding of the context behind each rule. conduct this training regularly—once a year is normal, but it can happen more often if the industry demands it.

Ideally, employees should be familiar enough with the rules that they can function as their own compliance officers. They should be able to proactively avoid situations that would put the company at risk, and notify someone if they encounter a potential breach.

Simplifying Oversight

An effective compliance program requires several key elements in order to maximize efficiency, value and impact:

  • Centralized reference library. The compliance team needs to keep a central, public library of compliance requirements and documents. Properly tagging, sorting and indexing this library for easy browsing ensures efficient research. This allows deals to close more quickly and affords sales additional time to seek additional opportunities.
  • Delegate action items. certain compliance action items and controls are better delegated to the employees whom are most closely involved with the activity in question. A compliance- trained sales manager, for instance, can instantly approve or deal with any compliance issues his team encounters. This accelerates the response time for pushing agreements through while keeping the company protected.
  • Visualize the process. compliance management software has reporting tools that are built to help you understand where your business is lacking and lagging. With it, you can more easily detect which regulations or processes are slowing you down and which projects are exposed.
  • Document everything. The organization needs to keep a documented history of all process changes, assessments, and incident reports in the event of an audit. This audit trail needs to be in an accessible location and should be easily retrievable when the need arises.

Summary

By treating compliance as an investment rather than a cost, business leaders can build a compliance program that protects the company from legal exposure. It also creates a program that integrates with key business operations, such as sales, administration and human resources, to create competitive advantage, enhance efficiency and reduce costs.

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