Corporate Compliance and Your Businesshttps://seqqe.com/wp-content/themes/corpus/images/empty/thumbnail.jpg 150 150 webmaster webmaster https://secure.gravatar.com/avatar/a9d047212ca7f4ef81cea4a19a614c52?s=96&d=mm&r=g
The most common perception of compliance is compliance with regulations: the laws, rules and other norms of a government that detail how an organization should behave. For example,
- All registered companies must file tax returns.
- No company can bribe government officials to win business.
- Companies must protect the personal data of citizens.
- Companies should not get involved in money laundering and terrorist financing.
Governments don’t care how a company complies with the law, as long as it does.
So companies design their compliance programs to develop the “how” part. Employees must comply with internal policies and procedures.
For example, bribing government officials is illegal. Therefore, companies develop internal policies for employees that prohibit paying for luxury travel or giving gifts to government officials. Companies develop internal procedures for submitting expense reports to identify any suspicious payments that employees may attempt to make.
In other words, the laws define what must be complied with; companies establish internal procedures to achieve this compliance.
How Corporate Compliance Impacts Businesses
- Compliance can keep a company on the correct side of the law. Even when a company violates the rules (which will surely happen eventually), the existence of a compliance program will demonstrate to regulators and prosecutors that the company is trying to do the right thing. That can lead to smaller penalties (or none and only a warning).
- A compliance program can preserve the reputation of a company. Businesses can suffer serious consequences for misconduct: bad headlines, consumer boycotts, business partners cancelling contracts, and more.
- Above all, effective compliance programs make your company a more attractive partner for other companies and clients, thus creating a competitive advantage. The more effective and transparent our ethics and compliance, the lower the business risks and the risks of others when hiring us.
As challenging as compliance can be, when done right, it becomes a huge strategic advantage.