Why is Corporate Compliance Important?
With such abundant talk about so many various forms of compliance, it’s no wonder there’s so much confusion circulating out there. Think about it: you’re sitting in a meeting, and someone starts rattling off about a new workman’s comp law that just passed. Immediately you think, “I’ll need to find corporate standard X and the updated regulatory standard Y, and then change the corresponding policies and procedures, then I’ll need to re-distribute the updated policy to our staff to assure we’ll be in full compliance.” Then you find yourself wondering, “Why does there have to be separate types of compliance to adhere to? What’s really the difference?”
Don’t worry. You’re not the only one wondering! Fortunately, there’s a great deal of information to highlight the reasons why.
First, let’s take a look at how Merriam-Webster defines the following:
Compliance (n.) – the act or process of complying to a proposal, or regimen; conformity in fulfilling official requirements, such as a specification, policy, standard, or law
The following definitions clarify the similarities and differences.
Corporate compliance (n.) – comprises the observance of statutory and company regulations on lawful and responsible conduct by the company, its employees, and its management and supervisory bodies
Regulatory compliance (n.) – describes the goal that corporations or public agencies aspire to in their efforts to ensure that personnel are aware of and take steps to comply with relevant laws and regulations
As noted above, regulatory compliance is in place to pave the way from a legality standpoint, and to make personnel aware of all company regulations. These standards ensure personnel are adhering to the overarching goals established by your organization, while also abiding by the laws and stipulations set forth by the local, state, and national governments.
Corporate compliance refers distinctly to the upholding of your company’s character and the ways personnel are expected to behave. The outcome inevitably affects the success of both the individuals and the organization as a whole. Basically, this is a form of internal maintenance to ensure someone within your organization is keeping a watchful eye on the overall adherence to company policies, pertinent laws, etc.
A corporate compliance program is not an area that can afford to be an afterthought, or lacking altogether. The program should be well planned and implemented, with coinciding training programs to guarantee personnel are well versed in all areas of compliance.
It’s also important to paint a very vivid picture of your organization’s roles and responsibilities, from the maintenance engineer to the CEO. Without a clear picture of the desired corporate structure, organizations open the door to potentially elevated risk, inappropriate behavior, increased liability, and unruliness.
Here are a few vital aspects to incorporate in a successful corporate compliance program:
• Policies – state the plans and rules to abide by
• Procedures – dictate the methods and means to following established policies
• Standards – outline how tasks should be completed
• Laws – legal constituents that cover all applicable laws that must be abided by
• Objectives – cover the aim or general goals of your organization
• Expectations – summarize how personnel should conduct themselves in the workplace
• Obligations – cover the courses of action personnel must take
All in all, regulatory and corporate compliance are allies, and it’s imperative that they support one another. These two programs promote integrity and ethics in the workplace, by covering all legal and ethical bases. Although it may seem a bit confusing in the beginning, if you address all of the aforementioned aspects, you’ll be able to assemble all the pieces of an effective corporate compliance puzzle effortlessly and in no time.
For additional information on managing your corporate compliance program, check out our Policy Management FAQs.