Compliance Management: The Importance For Businesses
When you take part in a business, it is crucial that your company and its employees comply with certain laws and standards. This is defined as compliance management. Compliance refers to following the rules that are set and compliance management is a process by which business managers organize, control, lead and plan specific activities that guarantee compliance with relevant legislation, as well as internal and external standards.
The activities that managers plan include implementing policies that ensure compliance, internal and third-party audits, preparing reports and providing official supporting documents, as well as security procedures and control. Sticking to this process is crucial as it allows employees to work in an environment where clients’ data is secured and protected and where damage to the company is prevented.
It is important to mention that there also are two approaches to compliance management, and the one you choose usually depends on the type of compliance issue that your company is facing.
The first approach to compliance management is laying down the law and becoming an enforcer. So, in this approach, it is your duty to make sure that everyone in your company knows and understands the law, and it is your job to enforce this law on a regular basis. Note that the stance that you are taking in this approach is in reality tough and has little room for compromise and flexibility, and there is definitely no room to compromise. In addition to that, it is crucial that you remember to check the contract terms carefully and make sure that they are clear to everyone in your company.
The second approach to compliance management includes leaving room for judgement calls and flexibility. Contrary to laws, which are not so negotiable, certain standards could be flexible at certain times. For instance, it is not unheard of that some standards could contradict or be inconsistent with one another. In this approach, it might be necessary to relax a certain standard by some staff members so that work can proceed with ease. Unlike the first approach where rules are clear-cut and unambiguous, in the second approach employees can deviate at certain times from the standard. This deviation, of course, is often done through a written permission. That being said, it is your duty to make sure that the contract allows such flexibility and deviations to occur and to determine what judgement calls can be made by your employees, who is authorized to do those calls, in what manner and under what circumstances.
Legal compliance is very important to your business and for its reputation, and it could save you from costly litigation and even going to jail at certain times. In addition to that, compliance with other standards is also imperative whether it is from inside your company or outside it. In order to get started with bank collection compliance management, there are certain steps that you need to follow.
First of all, you need to get a hierarchical commitment to legal compliance. You should also identify what risks are supposed to be on your compliance checklist. Following that, you should know and fully understand how companies, which are similar to yours, handle the risks on your checklist and what strategies do they follow. In addition to that, you should provide your employees with the proper compliance training, allocate responsibilities and deal with non-compliance incidents without any delays. Furthermore, it is crucial that you conduct regular audits and that you set up a system for reporting compliance, as well as for keeping records.
As a conclusion, compliance management is a process that certainly requires a lot of hard work, money and tons of efforts and commitment to be properly implemented in your business. However, by allocating responsibility, constantly following up with your employees, as well as keeping compliance as a regular on-going activity at work, you will definitely make sure that your job is a lot easier and that a lot of risk and damage to both you and your customers is prevented and avoided.
For more information and explanation on compliance management and how to properly approach it and implement it in your business, please make sure to check the following article: