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Monday, September 23, 2019

Corporate Commentary

Building a Successful Compliance Program

Corporate Executive

Developing a comprehensive compliance program is necessary to thrive in a highly regulated business environment. It provides internal controls that guide the actions of all the stakeholders within the organization, thus preventing violation of regulatory rules and standards.

Regardless of the industry, you should ensure that you have an effective compliance program that encourages ethical conduct among the employees, enhances adherence to the existing laws, and prevents fines due to violations of regulatory requirements. For example, the Payment Card Industry Data Security Standard (PCI DSS) requires that you protect the sensitive data of cardholders. If you fail to comply, you’re likely to pay massive fines that may lead to failure of your business!

The compliance program boosts your customers’ confidence, thus helping you to build your brand and reputation.

What’s a Compliance Program?

The complexities arising from the handling of big data and integration of the internet of things (IoT) in business operations has invoked regulatory bodies to develop laws that govern the operations of organizations in different industries. This action helps in protecting the customers from fraudulent activities which would compromise their safety.

Your organization should develop a compliance program to ensure that it abides by the requirements of all the regulatory bodies. This program contains the procedures, policies, and mechanisms aimed at preventing, detecting, and mitigating violations.

A Comprehensive Approach to Designing a Compliance Program

When developing a compliance program, it’s necessary that you consider both the internal and external factors that may affect organizational operations. A comprehensive compliance program should include the following:

  1. Definition of Scope and Objectives
  2. Code of ethics
  3. Internal actions to prevent risks/fraud
  4. External regulations
  5. Objectives of financial reporting

Also, your compliance program should be designed to maximize the output of your organization while minimizing the expenses.

Steps of Building a Compliance Program

The process of developing a compliance program should always be multi-sectoral. It involves all the stakeholders in your organization to ensure that it’s all-inclusive and guarantee easy implementation. Here are the critical steps that you should follow:

  1. Define Your Desired Results
    This is the step that will determine the methods that you’ll apply in designing a comprehensive compliance program. As such, you should take your time to think through what you desire to achieve by developing the program. It’s advisable that you consult professionals and stakeholders to ensure that the final document will aid in meeting all the regulatory requirements.
  2. Involve Internal and External Experts
    You should create a conducive environment for employees to contribute to the process. Let them give crucial hints of areas that expose the organization to risks and suggest mitigation measures. This way, you’ll spot the hard-to-identify loopholes in your organization, thus helping you in developing a highly applicable compliance program.
    Also, the external vigilance will be crucial in your research on legal hurdles, competitors’ profiles, and the latest developments in the industry. When you gather all this information, you’ll be equipped to develop a compliance program that will protect your organization from legal battles in the future.
  3. Define Objectives and Align Controls
    Once you’ve researched and identified what you need to achieve with the compliance program, it’s time to develop the objectives. You should always ensure that you use simple language that all the employees will understand. The intention should be to ensure that every employee is involved in the process to reduce resistance.
    When you have clear objectives, you should then develop the policies, guidelines, and actions aimed at preventing and mitigating various risks (identifies during the 1st and 2nd steps).  All these policies should align with the objectives to eliminate redundancy. Ensure that you concentrate on the regulations of your specific industry. For example, if you’re in the healthcare sector, you should consider the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
  4. Develop an Assessment Framework
    How will you assess the efficiency of the program? You should institute internal auditing and monitoring processes to determine the effectiveness of the compliance program. This should be an ongoing process to make sure that you eventually get the best measuring tool.
  5. Compile the Document and Enhance Understandability
    Once you’ve addressed all the risks and identified viable mitigation processes, you need to compile the document. However, you should involve all the stakeholders! Ensure that each individual understands the role they should play in the implementation phase.
  6. Train and Communicate
    You should regularly educate all the stakeholders on the details of the compliance program. This will ensure flawless implementation and guaranteed efficiency. Whenever a stakeholder raises a concern, you should address it immediately to seal all the security loopholes in the organization.
  7. Measure Performance
    Regularly generate reports that will brief the stakeholders of the progress, new developments, and changes in risk dynamics.

Developing a compliance program is a necessary ingredient in ensuring a conducive working environment. Your organization should have a framework that will guide the compliance with all regulatory and legal requirements. Follow this article to get the tips on how to develop an implementable compliance program!


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Boris Dzhingarov
Boris Dzhingarov, founder of Cryptoext, graduated from the University of National and World Economy (UNWE) in Sofia, Bulgaria with a Bachelor's degree in marketing.
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