Definition of Compliance Management
Compliance management is a continuous process of monitoring and evaluating company processes and regulations to ensure their compliance with requirements of the regulator, legislation, standards, norms or customer requirements. In a broader sense, it also includes the monitoring and evaluation of internal regulations and their interrelationships. Compliance management is part of the so-called GRC (Governance, Risk & Compliance).
Why is compliance important for companies
- Compliance prevents companies from penalties, fines and lawsuits.
- Failure to comply with requirements can lead to fines, loss of license or certificates, threats to corporate security, or jeopardize the functioning of the organization as a whole.
- Ability to Operate: Complying with certain laws is a requirement of doing business. If your company misses the mark, the government may force your business to dissolve.
- Money Savings: Businesses that don’t address certain requirements can get hit with fees and tax penalties.
- Fewer Legal Issues: Following laws naturally protects your company from trouble with governing bodies. Many internal policies you might set make legal compliance easier too.
- Greater Ability to Work: Companies that accept government contracts or work with many large companies are expected to have and follow corporate compliance policies. They won’t work with any entity that doesn’t have them.
- Improved Safety: The Occupational Safety and Health Act (OSHA) provides specific requirements businesses must follow to create a safe work environment.
- Ethical Operations: One aspect of corporate compliance is equality and ethical treatment of employees. While this is a legal concern, the policies you set internally will help you meet requirements and create a culture of diversity.
- Increased Employee Happiness: Employees are happier when they feel safe and included at work. Retention gets a boost too.
- Better PR/ Reputation: When your business nails corporate compliance, there’s less room for public relations disasters and more opportunities for your organization to shine as an ethical, conscientious entity that other businesses want to partner with and people want to work for.
What areas of compliance management in an organization include
- Corporate compliance can include a number of areas where compliance must be achieved and then demonstrated
- Corporate regulations, such as guidelines and work procedures, encompass everything else
- Processes must work in practice as specified in the regulations, compliance is demonstrated by the company through various audits (e.g. ISO 9001 compliance)
- The organization must maintain company certifications and accreditations and continuously meet and comply with their terms and conditions
- At the employee level, it is important to ensure the qualification requirements of individual employees, compliance is demonstrated by personal certificates
- Workplace, equipment and facilities must be operated in accordance with the requirements (Declaration of Conformity, operation and maintenance in accordance with the requirements), compliance is demonstrated by the company through equipment documentation and proper maintenance
The most common areas and market segment where compliance is essential
- Compliance in the area of privacy and personal data protection (e.g. GDPR, HIPAA)
- Financial and tax compliance, compliance of financial institutions and companies
- Environmental compliance
- Technology compliance with supply chain requirements or standards
- Information technology compliance
- IT security compliance
- Anti-corruption compliance
- Labor relations compliance, equal opportunities and non-discrimination
What quality compliance management an organization needs
Compliance management also includes the correction of identified deficiencies and is close to risk management by its very nature. It also uses similar methods of working. It typically includes the following areas of activity:
- Keeping an overview of all the requirements that the organization has to comply with
- Monitoring requirements and changes to them (legislation, standards, norms)
- Monitoring the compliance of company processes with these requirements
- Identifying compliance gaps
- Designing and implementing corrective actions