Compliance in business can mean two things: as an “action” and as a “standard.” To fully understand what it is and why it matters in your business, you need to know the difference between these two concepts.
In this blog, we’ll identify key ideas related to regulatory compliance. We’ll begin by answering the basic question: What is compliance?
Compliance as an Action
Generally, compliance in business or in a company means adhering to government laws, health and safety standards, or data and security requirements. It is an “action” if there’s a conscious recognition of the said rules and policies. Deemed essential to the existence of a business or company, compliance becomes a necessary action.
What does this mean?
Regulatory compliance accompanies certain requirements mandated by recognized governing bodies. In this context, to comply means to meet certain requirements so that your company may run legally and safely.
This also speaks of the different responsibilities of a company. Compliant businesses are aware that they are responsible both to their employees and clients. To be non-compliant can result in serious consequences.
When you clearly meet regulatory requirements, you create a positive business reputation. And when you identify and take the necessary steps to comply with policies, relevant laws, and regulations, you can define under which program or framework your company should operate. This leads us to our next discussion.
Compliance as a Standard
Compliance becomes a standard if you have a well-designed set of rules and policies to help maintain security and stability in your company. These standards are only relevant if they are enforced properly and observed religiously within the organization. To consider it as a standard, it’s not enough that you simply adhere to laws and policies. You also need to understand whether following these rules will address the true needs of your company.
Being compliant as a business requires knowing the different types of compliance that fit your organization. One way to identify its applicability to your business is to know its relevance. In order to do this, ask the following questions:
- Does it reflect the behavior your company wants to address?
- Will it benefit certain job roles in your business? If yes, in what way?
- Will your employees be able to apply what they learn in their line of work if given a training?
- Is this type specific to your business industry?
- Will non-compliance affect your business or company?
Why Does Compliance Matter?
The main purpose of compliance is simple—this is to identify and avoid possible red flags in your business. Again, failure to comply seriously could result in costly fines or penalties in the future.
Furthermore, corporate compliance also helps your employees act responsibly. An effective program teaches your employees to treat each other well in work, promote a high level of professionalism, and uphold corporate values inside and outside their workplace. Therefore, it’s important to never take compliance for granted; for it can have a great impact on your business internally and externally. Below are some reasons why your company should take compliance seriously:
To avoid legal liabilities
No business would want to get into major legal disputes and face criminal charges due to non-compliance with the law. Aside from the fact that legal liabilities can be a big blow to your company’s reputation, they can also be an instant financial loss. Court hearings and appearances can be a colossal trouble to your business operations. To be legally compliant involves not only learning essential legislations applicable to your business, but also applying them at all costs.
As a rule of thumb, building a reputable public image is one way to successfully promote your business. If your company gets into trouble due to non-compliance, the general public might doubt your credibility. Remember, your clients’ trust and loyalty are everything to your business.
To grow productivity in your company
Earlier, it was discussed how compliance can create strong business standards. We call this internal compliance. It’s your company’s way of creating a positive working environment and a healthy culture. Employees want a workplace where they feel secured and well taken care of. This can only be achieved if the company has a clear model. This model can be a set of guidelines or policies that ensure employees and clients fairness and safety.
Facts to ponder on
In a 2020 survey conducted by Globalscape and the Ponemon Institute, it was found that:
- Regular compliance audits saved businesses $2.86 million on average.
- Hiring and utilizing in-house legal expertise saved businesses $2.27 million on average.
- Enabling governance, risk, and compliance technologies saved businesses $1.43 million on average.
- Implementing regulatory monitoring to ensure they were keeping up with regulatory changes saved businesses $1.03 million on average.
Get the Right Solution for Your Compliance Needs
Having learned all these things, you might wonder if there’s a better way to apply these in your business. There is!
As businesses change rapidly, so does the ways of being compliant. Compliance training programs and strategies are becoming more holistic and intelligent. To achieve this, companies should come up with a single, enterprise-wide solution that can manage compliance processes, reduce cost, and enhance user experience.
This isn’t too difficult to accomplish though, especially with the support of a digital platform! At Cursum, we can provide you with an all-in-one solution that includes all the necessary elements for a successful corporate compliance program. Become part of our amazing pool of partners who’ve been empowering their businesses with our smart solution.