Business today is multifaceted, and new business structures are continuously emerging, and laws are always changing with the ever-changing values and views of society.
The requirements for compliance are getting more and more complex. Every industry and business has rules and regulations they have to comply with, but why should you care about compliance? You should care because there are consequences for being noncompliant in your business.
Having a reliable and comprehensive compliance program helps prevent any damage to your company’s reputation and any impact on your business’s bottom line. Knowing and staying up to date on compliance is a must for your business. Below are seven inquiries about compliance measures every business should take.
Understanding & Reviewing Compliance Requirements
Something to consider when thinking of a compliance partner is to make sure there is a clear and accurate understanding of requirements across the four categories that make up compliance, which includes:
- Statutory and regulatory compliance ̵
- Operational and financial compliance – policies and procedures that minimize organizations’ risks across different areas such as financial reporting, data governance, safety, and human resources.
- Contractual compliance – usually master service agreements, union labor contracts, or pricing, these contracts and agreements are lengthy and drafter in legal language.
- Ethical factors – this includes responsibilities toward the organization’s employees, clients, shareholders, and stakeholders. These ethical guidelines set the right tone for business conduct.
It is critical to schedule periodic reviews to make changes in compliance rules, especially since laws and regulations change periodically.
Experts in Four Compliance Areas
There needs to be compliance professional in your organization in these four compliance areas to ensure that the tasks are completed, while communicating with multiple departments to make sure all elements of the compliance program are being looked after. Having a compliance group is essential in business sectors that present legal and ethical challenges, such as the financial sector.
Meeting Compliance Training Requirements
Employees need to have a shared understanding of the compliance requirement they may be facing. Training for compliance should be ongoing, and employees record and certificates should be maintained, especially for positions that require a professional license or credential.
Establish a Compliance Planning and Reporting System
Compliance programs require a thorough planning and reporting system to be effective. Committees should have training and experience to be able to identify and plan compliance requirements for their areas, including putting in place processes and procedures, and tracking progress. Reporting regularly allows for any compliance-related issues to promptly be addressed and action taken.
Performance Measurements to Push Continual Improvement
Changes are continuous in the business environment, and there are always new risks surfacing. This is why regular assessments and performance measurements of the compliance program are essential.
Have a Method for Monitoring and Auditing Compliance
Monitor and audit activities to evaluate the compliance program. Follow-up and support need to be provided to ensure that any actions to address that noncompliance is being dealt with. Risk management and monitoring should be extended to any subcontractors or third-party vendors. The process should include screening of all vendors, programs to enforce compliance, and continually monitoring and auditing noncompliant activities and providing actions to fix these issues.
Implementing Policies and Requirements
Being compliant needs to be an active ongoing process that is everyone in the responsibilities organization. Policies should have a code of conduct in their policies and procedures, and all employees should read and acknowledged. It needs to be transparent along the organization and with employees that compliance is a practical and ongoing practice that is the responsibility of everyone.
It’s essential to partner with an excellent company that can help you in setting up compliance and implementing it. Find the best PEO companies for small business to help with dealing with human resources, and policies and procedures in your organization.