A compliance management system isn’t just necessary for financial institutions. Big and small businesses are exposed to risks. Having a risk management strategy isn’t enough. A compliance management system is required to cover ‘all bases’ when it comes to protecting your company.
A compliance management system includes controls and policies designed to keep your business out of ‘hot water’, whilst operating in a cost effective way. It needs to keep up with changes that will affect your business. A well-known piece of compliance legislation is the Data Protection Act of 1998. This act covers the storage and protection of your customer’s data.
Is your compliance management system junk?
It’s one thing to have a compliance management system, but what matters is that it’s fit for purpose.
Your compliance system needs to do the following to be up to the task of protecting your business:
Keeps employees updated about compliance responsibilities.
Includes compliance requirements into business processes.
Checks processes to make sure they are compliant.
Corrects and updates documentation as often as necessary.
Uses the power of the company’s board and management to enforce and implement compliance.
How does a compliance management system benefit you?
A compliance management system is needed to protect your business from risk. ‘Burying your head in the sand’ won’t make risks go away. When you realise the benefits of implementing a compliance system, there’ll be no turning back.
Less ‘chasing your tail’ when it comes to complying with new regulations.
Increased efficiency because processes are defined.
Clear reporting procedures.
Better chances of being awarded third-party contracts.
Improved management systems.
Efficient data reporting.
Accountability of management teams.
More successful audits.
What tools should you use?
To secure the benefits above, you can use specialised software that will allow you to integrate all of your compliance management and governance. Good compliance management software will give you a snap-shot of compliance throughout your company. It should also provide accurate and real-time reporting.
What happens if you don’t comply?
The penalties for non-compliance range from imprisonment to fines. We’re familiar with the financial institutions that no longer exist, because of non-compliance. Here are some other businesses that have flouted compliance requirements and paid the price.
Minimum wage dodgers
The government has published a press release ‘naming and shaming’ employers that have failed to comply with the national minimum wage. The list of 113 employers is plastered on the internet, showing the amount they failed to pay.
Breaking environmental rules
Babz Media has been fined £45,500 for failing to comply with environmental rules. The company was prosecuted for disregarding rules in relation to the disposal of packaging waste, batteries and electrical equipment. A senior environmental officer commented that:
It has been discovered that millions of diesel cars were fitted with devises that would ‘cheat’ the emissions tests. VW could be fined up to $18bn by The Environmental Protection Agency. Consumers and shareholders could also sue the company.
The examples above show that no matter what your size, violating compliance regulations won’t end well. A compliance management system will safeguard your business from financial penalties and reputational damage.