Elements of Effective Compliance Management

Corporate compliance means that corporate behavior complies with laws, regulations, internal rules and regulations, and business ethics. With the globalization and scale of business operations, compliance management has become an indispensable part of corporate management. For global companies and large companies, scientific and systematic compliance management has become an inevitable requirement for business management.  

 

It is necessary to emphasize and value effective compliance management. Enterprises can implement compliance measures or establish a compliance management system. This is the basic requirement of compliance management. These measures or management systems need to really play a role. In terms of compliance effectiveness, some “compliance management guidelines” both at home and abroad clarify the necessary elements of effective compliance and become the key criteria for government regulatory agencies, enterprises and business partners to evaluate the compliance level of specific enterprises.  

The role of management 

Business managers need to recognize the value of compliance, invest resources commensurate with the size of the company, effectively develop and implement compliance measures, and manage and operate the company in compliance. They must also provide compliance management solutions. Business managers should be directly responsible for compliance matters. In the case of a board of directors, there should be directors responsible for compliance matters. The establishment of a professional department or a compliance professional (Compliance Officer) is responsible for the specific implementation of compliance matters. The compliance officer or chief compliance officer can report compliance directly to the business manager or company director. 

 

The US Sentencing Guidebook clarifies that companies should establish compliance standards and procedures in order to prevent and stop criminal acts. The OECD Guidelines on Best Practices for Internal Control, Ethics and Compliance suggest that companies should regulate and regulate all effective entities, including subsidiaries, in order to prevent and detect bribery abroad, especially in gifts, hospitality, entertainment. Costs, customer journeys, political donations, charitable donations and sponsorships, facilitation fees and lobbying are all considered in seven areas, and appropriate penalties are in place. The Principles of Effective Compliance Management in Switzerland refer to the development of compliance organizations and compliance systems in the second effective compliance management element. The ISO 19600:2014 Compliance Management System Guide requires compliance policies to be documented and documented in a simple language for easy understanding. 

 

The US Sentencing Guidebook clarifies that organizations should adopt training and other means to communicate with company managers, senior management, company employees or distributors on compliance. The UK Bribery Act Guide 2010 clarifies that business organizations use internal training and other means to communicate internally and externally to ensure that anti-corruption policies and procedures are integrated into the organization and can be understood by relevant personnel. The OECD Guidelines for Best Practices in Internal Control, Ethics and Compliance also have similar compliance training provisions for all employees of the company. The Principles of Effective Compliance Management in Switzerland mention the importance of compliance training and education in the third “Compliance Process” of Effective Compliance Management. The ISO 19600: 2014 Compliance Management System Guide states that those with compliance obligations should effectively address these obligations. To this end, education or work experience is one way. The purpose of compliance training is to align the roles of all company employees with the company's compliance culture and compliance commitments. 

  

Compliance and communication 

      China's Compliance Management System Guide states that organizations should adopt appropriate communication methods to ensure that all employees continue to learn and understand compliance information. Communication should clearly give the organization's expectations of employees, and under what circumstances will the non-compliance be escalated to whom. For internal reports, it also reflects the smooth communication between the upper and lower levels. It can be said that internal reports and executive support are intrinsically linked to a certain extent. The US Sentencing Guidebook clearly states that companies should establish a reporting system to guide employees and agents to report violations within the company anonymously and confidentially, without fear of retaliation.  

The Principles for Effective Compliance Management in Switzerland also mentions compliance reporting and internal reporting systems in the third “Compliance Process” of effective compliance management elements. The OECD Guidelines on Best Practices for Internal Control, Ethics and Compliance state that effective compliance measures include an internal reporting system that addresses the issue of directors, employees, employees and business partners being pressured by superiors but not willing to violate Professional standards or ethics provide a reporting path for relevant personnel. The ISO 19600: 2014 Compliance Management System Guide also clarifies that the organization adopts appropriate methods, including training and education, to enable all employees to understand the expectations of the organization and the consequences of violations. 

 

Compliance, all over the world, requires the right type of commitment from management and employees. The right type of commitment is not just a commitment to work hard – it is also a commitment to ensure that a proper compliance framework is established, and compliance management systems are provided to employees.

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