Compliance means acting according to someone's will. In the business context, it means obeying laws, regulations, regulations, etc. For easy reading, we will use the term "standards" to refer to these regulations and controls applicable to a company.
At this point, you may think it shouldn't be a surprise that companies need to follow standards. After all, we live in society and almost every aspect of social life is standardized in some way. Here lies the importance of understanding compliance as a discipline, a business activity.
Well, compliance as an activity within companies aims to ensure that the standards to which the company is subject are actively met, know what standards are applicable, understand the requirements and ensure that they are followed.
Making your employees, partners, suppliers and all those who participate in some way in running your business behave in this way is challenging but possible. At the current time of the industry, this is required and expected.
Importance of compliance for companies
Every business involves risk. Company managers know very well the factors that can bring success or failure to that type of business. The management of companies invests time and money to understand and foresee these factors, be it the price of raw materials, seasonality, sales cycle and receipts, the cost of storage and freight and countless others.
This set of risks is commonly called business risks. The risk of non-compliance (compliance risk) is also present in any enterprise and generally materializes in the form of fines, penalties, legal problems, damage to the company's image and reputation, and other situations that can, in extreme cases, cause the company to ruin.
It is necessary to manage the risk of compliance with the same discipline as the other business risks. Something that can bring great financial or reputational damage should not be overlooked.
It is important to select a system capable of meeting local and global regulatory requirements if your company is operating in multiple countries.
A good compliance system enables companies to develop detailed testing plans that are appropriate to their organization and regulatory requirements. These can be shared as needed with any authorized persons. In addition, they should include adjustable alerts to remind users of regulatory deadlines such as recurring information that should be submitted to some regulatory body.
Hamilton Lindley is a Texas business professional who leads teams on investigations, compliance, and litigation management. He has a bachelors in entrepreneurship and a juris doctor in law from Baylor University. Hamilton has three children and a wife of 20 years. They live in Waco, Texas. Hamilton enjoys camping, hiking, hunting, and fishing. Hamilton Lindley believes in continuous improvement and information flow. His team manages $2.5 billion in revenue compliance for more than 4,000 franchise owners across the world.