Compliance is one of the most important aspects of an organization. In simple terms, compliance simply means conforming to a standard, rule, mandate, standard or rule. In more technical terms, regulatory compliance refers to the objective that organizations hope to attain in their attempts to ensure that they know and take proper steps to comply with applicable laws, rules, policies and regulations pertaining to their industry. This is one of the most important elements within the business environment today. A company must make sure that it adheres to all applicable laws and standards if it wishes to remain a leading player both domestically and abroad.
Compliance usually involves ensuring that all procedures, policies and procedures are in line with the regulations governing the specific industry in which the company operates. In addition to this, it also entails ensuring that the business processes follow set rules and procedures. Ultimately, regulatory compliance protects the interests of both parties – the company in question and the government officials who regulate and enforce these regulations.
Compliance can be achieved through a combination of processes and activities. The processes include making sure that appropriate policies and procedures are in place, checks and balances in place, risk assessments performed on a regular basis, audits and reviews, and compliance monitoring. However, even after these activities have been put into place, in some cases a systematic approach is still required. In order to achieve successful and effective compliance, first place should be given to effective risk assessments.
The risks are then assessed according to their importance, potential impact, their potential costs and benefits. The next step involves the identification of controls that would best address these risks. Next, the controls should be tested to determine their suitability, effectiveness and efficiency. Finally, all risks should be controlled or avoided.
Corporate compliance programs are often designed to protect the interests of third parties as well as to maintain adequate levels of productivity. This means that although the primary objective is to achieve compliance, the secondary objective is also to ensure the quality and safety of the workplace. Some companies have tried to use a variety of strategies to achieve both goals simultaneously. For example, some organizations create a culture of trust and competence within the company, while others attempt to create an environment where trust is completely absent.
This approach has the potential to create significant cost savings and a workforce which are significantly more productive. However, in order to make this work, internal controls and assessments must be well developed and regularly reviewed. A company needs a force multiplier! Its internal controls and assessments must allow for the generation of superior results. A good compliance officer will know how to do this.