How to Implement and Run a Compliance Management Program
No matter what line of business you’re in, you have to ensure that your company’s behavior is compliant with a complex web of laws, regulations, and industry standards. Of all sectors, financial institutions and healthcare service providers have particularly heavy compliance burdens to contend with.
Many businesses implement and maintain compliance management programs to overcome these challenges. In this article, we cover:
- Why compliance management is important
- Seven steps to take when creating your own compliance management process
- Three challenges to successful compliance when a program is in place
- Five strategies to embed a culture of compliance in your business
Why Compliance Management Is Important
Compliance management programs are expensive. First, you have to identify where your business may be vulnerable. Second, you need to prioritize risks in order of likelihood and cost and then create specific plans to mitigate against each one.
Third, you need to introduce compliance processes into your company to check for adherence and perform them regularly. Last, you need to be ready to act when you discover instances of non-compliance.
This all costs money and takes a lot of time. But there are commercial benefits to compliance beyond not being fined or taken to court.
For one, consumers and prospective employees place more value on companies whose values and beliefs match their own. Regularly breaching compliance regulations is a guaranteed way of losing their support and goodwill.
In addition, financial service providers and investors, the parties you need to fund your growth plans, want good governance. A well-run company finds access to capital markets easier.
Being compliant keeps regulators happy too. They may be more likely to give you the benefit of the doubt if you make an error if they know you really make an effort with compliance.
7 Steps to Create Your Own Compliance Management Process
To implement a compliance monitoring and management process in your business, take the following seven steps:
- Appoint a compliance team: Fill it with people who know your business, how it operates, and the wider external environment in which you do business. Consider appointing a Chief Compliance Officer (CCO) who has ultimate responsibility for compliance management, or you may wish to hand over responsibilities department by department — for example, to a Chief Procurement Officer (CPO). Listen to what they tell you about the resources they need to do the job effectively, including hiring support staff.
- Find out where the risks are: Identify the exact regulatory requirements that apply to your business. If in doubt, take advice from government agencies, your industry association, or your firm of attorneys.
- Prioritize risks: Conduct a risk assessment on each threat you identify to determine how likely it is to occur and how much remediation would cost in the event of non-compliance. Prioritize investment in risks according to your findings.
- Empower and train your staff: Consider introducing software to automate as many of the new compliance requirements you place on staff as you can. Make training on how to use the software part of a compliance education program that involves and engages all relevant employees.
- Introduce effective internal controls: Put in place checks that the policies and procedures you introduce are being implemented correctly by your staff. An inability to monitor adherence calls into question the efficacy of your entire compliance program.
- Monitor diligently: Make adherence part of your staff performance reviews, particularly if they work in a sensitive area. But be vigilant between reviews and monitor staff and departmental performance. Regular company and departmental compliance audits will introduce accountability into your business helping to embed a culture of compliance.
- Report regularly: See the wider picture on compliance by requiring departments to report on their performance regularly. Regular reports will also help you adhere better to legal requirements like GDPR and HIPPA. You’ll be more transparent to stakeholders on issues like ESG and certification bodies like ISO. Also, in the event of a breach, your position may be easier to defend the quicker you provide a detailed report on an incident to a regulator.
3 Challenges to Successful Compliance When a Program Is in Place
Managing compliance issues is difficult. Here are the three main challenges many businesses face.
1. The Rules Are Complicated and Keep Changing
As the laws, regulations, and industry standards are subject to regular change, you may wish to consider outsourcing some of your compliance requirements.
Some specialist law firms offer this type of service. Compliance software apps are beginning to build this into their platforms too. Failing that, many regulatory authorities run email subscription services to keep organizations up to date.
2. Compliance Management Costs Money
SMBs face greater challenges in reacting to regulatory changes. You have the same legal requirements as larger companies but not the budget.
One option is to outsource as many of your compliance requirements as possible to external specialists. Or you could hire a developer who could add compliance-related business processes into software workflows.
3. Keeping Staff Alert of the Risks
Changing company culture is difficult, especially if that change means that employees have to complete more steps to do the same task than before. As part of your initial or ongoing training, demonstrate to staff how non-compliance may be a threat to their jobs and highlight what happens to non-compliant companies (like when a group of 16 U.S. financial firms was fined $1.8 billion collectively over a wide range of failures).
When changes to the compliance landscape occur, explain the consequences of them to your employees and train them. And make sure you reward and recognize staff whose vigilance prevented the company from accidental non-compliance.
5 Strategies to Embed a Culture of Compliance in Your Business
As much as sales, marketing, distribution, and customer care are built into your business, so should compliance. It needs to be a day-to-day activity organization-wide.
Five strategies you can use to embed compliance in your company include:
- Invest in the right compliance management system: Minimize workflow impacts by introducing customized compliance management apps to your business. If you can get them to integrate with your GRC software, even better. Not only will this help you spot new vulnerabilities faster and react to them, but staff will also appreciate the automation of monotonous manual tasks like document management, policy distribution, and data gathering.
- Build your own knowledge base: Consider building a Notion-type solution where employees can access policies, procedures, and training materials whenever a manager or trainer is not around. Add an AI chatbot to your knowledge base so that employees can get quick answers.
- Discipline errors: When an employee makes a mistake, require them to take top-up training. If they keep making mistakes, increase disciplinary actions and make them more consequential. If they just don’t get it no matter how hard you try, you need to let them go subject to employment laws. Leave staff in no doubt that the price for continual non-compliance is very high.
- Hold regular internal compliance roundtables: Monitor performance across the business at regular extended meetings that bring in the C-suite team and senior managers. Get the CCO (or the person you’ve tasked with compliance management) to describe their ongoing compliance-related challenges. Understand newer threats and how to defend against them by hiring subject matter experts like external consultants or legal counsel for these meetings. End each roundtable by setting new targets for the CCO and their team to hit between now and the next roundtable.
Introduce feedback loops: Set up your compliance management software so that it provides regular reports on the targets you set at the roundtable meeting. If progress falls behind schedule, call in your CCO to report on progress and intervene if necessary. Find a way to include feedback from employees and stakeholders on areas for potential improvement.
How to Implement and Run a Compliance Management Program
No matter what line of business you’re in, you have to ensure that your company’s behavior is compliant with a complex web of laws, regulations, and industry standards. Of all sectors, financial institutions and healthcare service providers have particularly heavy compliance burdens to contend with.
Many businesses implement and maintain compliance management programs to overcome these challenges. In this article, we cover:
- Why compliance management is important
- Seven steps to take when creating your own compliance management process
- Three challenges to successful compliance when a program is in place
- Five strategies to embed a culture of compliance in your business
Why Compliance Management Is Important
Compliance management programs are expensive. First, you have to identify where your business may be vulnerable. Second, you need to prioritize risks in order of likelihood and cost and then create specific plans to mitigate against each one.
Third, you need to introduce compliance processes into your company to check for adherence and perform them regularly. Last, you need to be ready to act when you discover instances of non-compliance.
This all costs money and takes a lot of time. But there are commercial benefits to compliance beyond not being fined or taken to court.
For one, consumers and prospective employees place more value on companies whose values and beliefs match their own. Regularly breaching compliance regulations is a guaranteed way of losing their support and goodwill.
In addition, financial service providers and investors, the parties you need to fund your growth plans, want good governance. A well-run company finds access to capital markets easier.
Being compliant keeps regulators happy too. They may be more likely to give you the benefit of the doubt if you make an error if they know you really make an effort with compliance.
7 Steps to Create Your Own Compliance Management Process
To implement a compliance monitoring and management process in your business, take the following seven steps:
- Appoint a compliance team: Fill it with people who know your business, how it operates, and the wider external environment in which you do business. Consider appointing a Chief Compliance Officer (CCO) who has ultimate responsibility for compliance management, or you may wish to hand over responsibilities department by department — for example, to a Chief Procurement Officer (CPO). Listen to what they tell you about the resources they need to do the job effectively, including hiring support staff.
- Find out where the risks are: Identify the exact regulatory requirements that apply to your business. If in doubt, take advice from government agencies, your industry association, or your firm of attorneys.
- Prioritize risks: Conduct a risk assessment on each threat you identify to determine how likely it is to occur and how much remediation would cost in the event of non-compliance. Prioritize investment in risks according to your findings.
- Empower and train your staff: Consider introducing software to automate as many of the new compliance requirements you place on staff as you can. Make training on how to use the software part of a compliance education program that involves and engages all relevant employees.
- Introduce effective internal controls: Put in place checks that the policies and procedures you introduce are being implemented correctly by your staff. An inability to monitor adherence calls into question the efficacy of your entire compliance program.
- Monitor diligently: Make adherence part of your staff performance reviews, particularly if they work in a sensitive area. But be vigilant between reviews and monitor staff and departmental performance. Regular company and departmental compliance audits will introduce accountability into your business helping to embed a culture of compliance.
- Report regularly: See the wider picture on compliance by requiring departments to report on their performance regularly. Regular reports will also help you adhere better to legal requirements like GDPR and HIPPA. You’ll be more transparent to stakeholders on issues like ESG and certification bodies like ISO. Also, in the event of a breach, your position may be easier to defend the quicker you provide a detailed report on an incident to a regulator.
3 Challenges to Successful Compliance When a Program Is in Place
Managing compliance issues is difficult. Here are the three main challenges many businesses face.
1. The Rules Are Complicated and Keep Changing
As the laws, regulations, and industry standards are subject to regular change, you may wish to consider outsourcing some of your compliance requirements.
Some specialist law firms offer this type of service. Compliance software apps are beginning to build this into their platforms too. Failing that, many regulatory authorities run email subscription services to keep organizations up to date.
2. Compliance Management Costs Money
SMBs face greater challenges in reacting to regulatory changes. You have the same legal requirements as larger companies but not the budget.
One option is to outsource as many of your compliance requirements as possible to external specialists. Or you could hire a developer who could add compliance-related business processes into software workflows.
3. Keeping Staff Alert of the Risks
Changing company culture is difficult, especially if that change means that employees have to complete more steps to do the same task than before. As part of your initial or ongoing training, demonstrate to staff how non-compliance may be a threat to their jobs and highlight what happens to non-compliant companies (like when a group of 16 U.S. financial firms was fined $1.8 billion collectively over a wide range of failures).
When changes to the compliance landscape occur, explain the consequences of them to your employees and train them. And make sure you reward and recognize staff whose vigilance prevented the company from accidental non-compliance.
5 Strategies to Embed a Culture of Compliance in Your Business
As much as sales, marketing, distribution, and customer care are built into your business, so should compliance. It needs to be a day-to-day activity organization-wide.
Five strategies you can use to embed compliance in your company include:
- Invest in the right compliance management system: Minimize workflow impacts by introducing customized compliance management apps to your business. If you can get them to integrate with your GRC software, even better. Not only will this help you spot new vulnerabilities faster and react to them, but staff will also appreciate the automation of monotonous manual tasks like document management, policy distribution, and data gathering.
- Build your own knowledge base: Consider building a Notion-type solution where employees can access policies, procedures, and training materials whenever a manager or trainer is not around. Add an AI chatbot to your knowledge base so that employees can get quick answers.
- Discipline errors: When an employee makes a mistake, require them to take top-up training. If they keep making mistakes, increase disciplinary actions and make them more consequential. If they just don’t get it no matter how hard you try, you need to let them go subject to employment laws. Leave staff in no doubt that the price for continual non-compliance is very high.
- Hold regular internal compliance roundtables: Monitor performance across the business at regular extended meetings that bring in the C-suite team and senior managers. Get the CCO (or the person you’ve tasked with compliance management) to describe their ongoing compliance-related challenges. Understand newer threats and how to defend against them by hiring subject matter experts like external consultants or legal counsel for these meetings. End each roundtable by setting new targets for the CCO and their team to hit between now and the next roundtable.
Introduce feedback loops: Set up your compliance management software so that it provides regular reports on the targets you set at the roundtable meeting. If progress falls behind schedule, call in your CCO to report on progress and intervene if necessary. Find a way to include feedback from employees and stakeholders on areas for potential improvement.
Integrating Certa Into Your Compliance Management Program
From regulations to sanctions, use Certa to strengthen your compliance management initiatives at every stage.
With Certa, you can:
- Automate compliance checks and internal audits to ensure compliance status.
- Monitor compliance activities in real-time to receive notifications on potential issues before they become problems.
- Centralize compliance data to make it easier to manage and analyze for senior management.
- Train employees on how to ensure they are compliant in their roles.
- Ensure better collaboration and communication between employees responsible for compliance risk management.
- Communicate better with stakeholders and regulators with customizable dashboards and reports.
Talk with our experts today to get started.
