In business, there are specific rules and regulations that every organisation and its staff has to comply with in order to operate safely and legally. Not complying with these standards not only poses risks to organisations achieving their overall business objectives but operating as a business in general. As you can imagine, these risks could have a massive impact, so you want to identify the obligations your organisation must be in compliance with to avoid the potential risks. This is why compliance management is so important. At its core, compliance management is the process of managing the planning, organisation and execution needed to ensure compliance with laws and regulations, and in turn, mitigate the risks that would be encountered due to non-compliance.
What's Involved in Compliance Management
In order to make sure you are meeting your compliance obligations, it is first important to identify and understand the legislation, regulations or internal policies your organisation must comply with as well as which are most important to meet, as some standards are mandatory whereas others are voluntary.
Mandatory standards, like tobacco health warnings for instance, are enforced by government agencies like the Australian Competition and Consumer Commission (ACCC) and vary across industries, products and services. They must be followed to avoid legal implications. Voluntary standards, on the other hand, suggest best practice but are not legally required for your organisation to follow. Non-government bodies like Standards Australia make voluntary standards, such as motorcycle helmet safety standard AS 1698-1988 (Source: Business.gov.au).
Once you know the obligations you need to comply with, you should develop internal procedures to make sure you're in compliance, often called a compliance program. This not only makes sure you're covered but also establishes a culture of compliance in your organisation. Additionally, it is important that you consistently stay apprised of new regulations you may need to follow.
4 Key Reasons for Compliance Management
There are 4 key reasons to have compliance management efforts in place within your organisation.
1. It makes good business sense.
By managing your compliance, you will have greater visibility as to what's going on in your business as you will have to review all your products, services, procedures, human resources protocol and so on to make sure you are up to par with all regulations across each area. Plus some businesses you work with may need or want to see that you have a compliance program in place.
2. It helps your employees do their jobs and feel protected.
In understanding what needs to be done to be in compliance with certain standards, you will have to document procedures for your employees to follow. This will most likely help them do their jobs more efficiently. It will also give them the peace of mind that you are following government and/or industry protocol and have their best interests at heart.
3. You will avoid legal or financial implications.
As noted above, certain regulations set by government bodies like the Australian Securities and Investments Commission (ASIC) or the Australian Department of Agriculture are legally enforced and they will take action to address non-compliance. If you don't have a compliance management framework in place, you could face fines or legal consequences that could be detrimental to the survival of your business.
4. It solidifies and potentially enhances your brand image and reputation.
Whether you are able to comply with only your mandatory obligations or both mandatory and voluntary standards, having proof that you care about how you conduct business, the wellbeing of your employees and the safety of your products and services, to name a few, are crucial for maintaining your brand image. Not abiding by standards, like anti-bullying or privacy laws, would not bode well in the eyes of your staff, clients, customers or investors. If, on the other hand, you commit to employing certain sustainability policies to do your part in protecting Australia's environment, for example, you could boost your reputation, appealing to potential employees and attracting new customers, which would ultimately increase your business profits.
Regardless of the size of your organisation, compliance management should be non-negotiable. Even if you are a business of one, a compliance program will enable proper documentation of your business policies and processes. For larger organisations, you will be confident you are not violating any government or industry regulations and therefore effectively managing the risk of complications for your business.
Compliance management can be intimidating and overwhelming. If you're in need of assistance with your compliance risk management, don't hesitate to invest in compliance software like RiskWare's Compliance Management Module.
To learn more about how RiskWare is making the world a little less risky, visit us at RiskWare.com.au.
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