What is regulatory compliance? It is an important part of building a good organizational reputation.
Why compliance matters to institutions
Regulatory compliance is the organizational function that monitors adherence to applicable laws and standards and helps people understand the risks of noncompliance.
An organization needs sound corporate governance to support compliance.
The whole organization should be involved. Internal or external audit teams, an ethics committee , and a compliance officer can help ensure that operations and departments follow applicable rules.
Core functions of regulatory compliance
Three essential functions show why investing in compliance makes sense.
Risk prevention
Compliance supports the prevention of offenses and the identification of risks from violating internal or external rules. Training employees in ethics and expected conduct is important at this stage.
Detecting problems
Another function is identifying existing violations, investigating them, and responding promptly and appropriately. An ethics hotlinecan receive concerns about legal breaches or weaknesses in controls and training, helping the organization choose corrective actions.
Operational transparency and reputation
Compliance should do more than create an appearance of transparency: it should make operations genuinely transparent. That can strengthen the organization's reputation among the public, authorities, customers, suppliers, and prospective employees.
Good compliance practices
A compliance program can include these elements:
- A Code of Ethics.
- Defined internal policies.
- Corporate best practices.
- Commitments to customers and suppliers.
- An independently provided ethics hotline.
- Clear consequences for different types of violations.
Compliance can seem complex, but EthicsGlobal can advise companies of different sectors, sizes, and stages of development.
Regulatory compliance is a way of working throughout the organization, and we have experience helping companies put it into practice.