While every business understands the critical nature of regulatory compliance, we frequently hear about compliance violations and massive fines levied by regulatory bodies. Enforcing regulatory compliance is a challenging task because it requires compliance from every stakeholder in the business process. The employee dealing with customers on the front line must be aware of the organization's compliance requirements, but they are only the first line of defense. Then it becomes their manager's responsibility, then the compliance departments, and finally upper management's.
If even one stakeholder in the process gets it wrong or overlooks an issue, non-compliance results. Organizations can take steps to prevent these errors and improve compliance.
The first step is to make compliance more accessible.
While training and development are critical for enforcing regulatory compliance, accessibility to compliance is just as critical. Employees may occasionally forget or require reference to compliance-related rules and documents. Any organization seeking increased compliance must ensure that such information and data are readily accessible at all points in the business process where compliance is critical.
Step 2: Promoting and facilitating compliance consulting
Organizations must enhance communication between their compliance departments and frontline employees. The front line of many organizations views the compliance department as the unit that regulates them. This perception arises because the compliance department contacts a frontline employee only to train and then to correct their errors. If the relationship is one of consulting, the efficiency of regulatory compliance increases. The frontline personnel should have the option of seeking assistance or advice from the compliance department at any time.
Step 3: Anonymous questionnaires
If multiple attempts to change the organization's compliance culture fail, management must investigate. Surveys are an excellent way to collect data, but there are two caveats: they should be anonymous, and they should focus on the culture rather than on individuals. Anonymity enables people to be candid without fear of losing their jobs.
The questions should be about the culture rather than about other employees, because when people provide negative feedback about other employees, they feel as though they are jeopardizing the other employee's career. This may make them feel accused and cause them to withhold an honest response. The solution is to ask non-blaming questions. Rather than asking "have you observed any of your colleagues flouting compliance requirements", the proper question is "how frequently do you observe non-compliant behavior within the department or organization".
Step 4: Demonstrate compliance
Compliance's invisibility is a significant impediment to improving regulatory compliance. Organizations are unable to detect issues as they develop and instead learn about them months later during an audit. This allows for the issues to grow and become significant. Additionally, management lacks a holistic view of compliance – they are unable to see the current state of compliance and compliance issues and therefore must rely on manual reports generated on request.
Visibility is why compliance software is critical for regulatory compliance improvement. When a compliance management system is implemented, management and compliance personnel gain a real-time view of the organization's compliance status. If a compliance issue arises, it becomes immediately visible to all interested parties and can be resolved immediately.
Step 5: Automate controls
There is no reason to rely solely on the vigilance of all participants in the business process. A more effective approach is to automate the business process. Additionally, compliance management systems are capable of detecting compliance violations. For instance, if a critical step in the compliance process is skipped, the system immediately flags the non-compliance. It is preferable to delegate regulatory compliance strategies to compliance professionals and to automate monitoring and tracking tasks.
These 5 steps can help a business bring about not just a temporary change but a permanent improvement in the way it manages regulatory compliance. It is important to focus on the short-term goals of regulatory compliance, but short-term goals can only bring short term benefits. Focusing on structural issues is complicated and requires a lot of effort, but the structural improvements that are made because of the focus result in long-term benefits. Creating the right foundation for regulatory compliance can help a business for the next decade or even more.
Compliance management technology is a great way for organizations to introduce a paradigm shift in the way they manage compliance. The cost of the technology has significantly decreased over the past few weeks, resulting the technology being easier to procure for small businesses. Any business that is serious about regulatory compliance should look at the available compliance management solutions and understand what those solutions can do for the organization and how they can help them achieve their corporate vision.