Regulatory Compliance Best Practices

To maintain fair, ethical business operations, companies of every size must follow laws and regulations as part of business operations.

December 29, 2020

To maintain safe, fair, ethical business operations, companies of every size in every industry must follow certain laws and regulations as part of business operations.

You can’t simply “opt out” of compliance. But the sheer volume of laws that companies need to follow make regulatory compliance challenging and complex. In addition, regulatory compliance requirements for businesses are often changing, making it feel like you are shooting at a moving target in your efforts to achieve compliance.

Failing to comply can prove costly in terms of legal and financial penalties as well as the consequences of eroding customer trust and tarnishing your reputation.

If you are wondering how to improve compliance in a company, it helps to know (and follow) regulatory compliance best practices.

1. Determine Your End Goals

Rather than jumping into your first steps towards compliance, start with where you want to end up and work your way back. In some cases, this could be a specific law or regulation you must comply with in order to operate as a business. In other cases, it might be a specific compliance area that is costing you, such as a certain fine or violation you want to reduce.

Regardless, before doing anything, start by analyzing the end result you want to achieve and identify those specific areas you want to see improved. This involves looking at your goals and objects and identifying key results that matter to your various stakeholders. It also means establishing clear metrics to measure how well you are meeting those goals and objectives.

Taking an end-game-first approach tops the list of compliance best practices. Doing so will help determine your plan and strategy throughout the process and give you a North Star to guide decisions along the way.

2. Know Your Industry’s Regulatory Environment

It may seem obvious that you should know the regulatory environment of your specific industry, but it is worth stating for a very good reason. Not every organization has the personnel or expertise to stay up to date with every piece of legislation and its requirements on them.

While some companies are fortunate enough to have a Chief Compliance Officer whose job it is to know and implement this information, many organizations do not have a CCO. However, lacking a designated CCO is no excuse, as it does not exempt you from needing to comply

with laws and regulations. This leaves you with several options. You might need to find people within your organization who can formally add these compliance responsibilities to their jobs.

You might need to hire someone new to handle them in a full-time role. Or you might need to work with an outside consultant or legal counselor to make sure you do not put your company at risk.

Regardless of which option you choose, you need someone to understand the regulations that affect your industry and oversee your internal compliance requirements.

3. Create Effective Policies and Procedures

As the lifeblood of your company, policies and procedures reflect your organizational values, provide the framework for your business operations, and offer guidance to employees. Use these written policies and procedures as a tool to help reduce your regulatory risk.

The compliance key lies in your ability to manage, distribute, and track all those policies and procedures to ensure employees know and understand them. When you tap into a policy management solution like PowerDMS, you get that ability.

PowerDMS helps you simplify the policy lifecycle with online distribution, signatures, and tracking – making compliance easier and quicker to achieve.

To better understand how this works, try this analogy. Think of your risk-mitigating policies and procedures as the bowling ball, and the ability to manage, distribute, and track those policies as the pins.

The regulatory compliance best practices, then, means getting all of these expectations and requirements in writing for employees to know and sign off on. And PowerDMS provides that streamlined tool to make this process easier and more provable if or when regulators come calling.


4. Hold Employees Accountable

Not every company requires employees to sign specific policies. But if your employees are your first line of defense against non-compliance, being able to track that they received and acknowledged those policies can help reduce your risk.

Don’t rely on outdated methods like paper sign-off sheets or email read receipts. You need a robust system that can quickly and easily track who has signed which version of which policy. This allows you to prove what your company has communicated to employees as well as what employees have acknowledged that they have received, reviewed, and understood.

5. Conduct a Compliance Audit

When following regulatory compliance best practices, a thorough audit will always serve you well.

Once you have a CCO, a consultant, or even a compliance team on board to handle risk management and compliance, they need to conduct a comprehensive review of all the regulatory compliance areas your company needs to address.

Besides assessing whether or not your business is meeting all these regulations, you need to establish a baseline of where your compliance efforts currently stand. For example, determine how many violations your company has had, how much these violations have cost you, and if you have at-risk areas that could potentially be fined.

This baseline can also serve as a rationale for additional funding or personnel. For example, it makes sense to purchase a new piece of software or hire a CCO if it costs less than the fines would be for non-compliance.

6. Build a Comprehensive Document Repository

Take the guesswork out of where your company houses its critical documents. Everyone in the company should know exactly where to look for any compliance information they need to do their jobs.

The volume and complexity of compliance information can prove challenging to understand and retain. Relying on memory is a recipe for failure. Instead, employees need an easy-to-use resource that allows them to search for and find the information they need quickly and accurately.

Storing critical compliance documents in a binder is an outdated approach to document management. And cobbling together a system of spreadsheets and shared files often leaves gaps and plenty of room for errors.

You need to be sure that only the most up-to-date and accurate information exists in your document management system. Plus, this repository needs to allow employees the ability to search from anywhere, whether they are at work, at home, or out in the field.

PowerDMS gives you a secure, cloud-based platform that allows you to control the access and version history of your documents. Plus, it tracks a complete audit trail so you can trust that employees are seeing the right version every time they view it.

7. Track Violations (and Costs)

Similar to (but different from) the audit, the ongoing monitoring and tracking of violations serve as another compliance best practice. To get control of regulatory compliance, you need to keep tabs on recurring and one-off violations to reduce (and hopefully eliminate) the chance that they will happen again.

You also want to monitor the costs associated with these violations to see the impact that non-compliance is having on your company’s bottom line, productivity, level of customer trust, and reputation.

Like the audit, tracking violations and costs offers a good way to prove out the ROI of additional risk mitigation measures. It can also help with holding employees accountable.

This does not mean you need to punish employees for every violation. But, on the whole, if you can show a specific cost associated with these problem areas, it is easier to motivate change to be able to improve and reduce risk.

8. Compliance Training

If policies provide the first line of defense, training serves up the second – especially when your compliance training aligns with your policies. By training to your policies, you reinforce the behaviors and processes that will be the most effective.

Doing so also helps increase comprehension and awareness in employees.

Another good tip? Offer ongoing training rather than one all-day workshop or marathon classroom course. Offering educational nuggets through 15-minute sessions delivered online can increase compliance without interrupting performance or availability.

With PowerDMS, you can connect these training courses to your specific policies or any other important document you store in our software. This means that not only are your policies never out of date, but neither is your training if you tie it to policies.

In this way, policies and training are always working together to form a complete compliance solution rather than a patchwork system of efforts.


9. Communicate Clearly and Regularly

Written policies can serve as a powerful tool for regulatory compliance, but if your employees don’t know about them, these policies might as well not even exist. That is why it is critical for your leadership and those responsible for compliance need to communicate that information (clearly, frequently, and consistently) throughout the company.

Policies and procedures cannot live in silos and leaders cannot assume that one memo or directive can fix the compliance issue.

If you want to put regulatory compliance best practices to work in your organization, employee communication must play a vital role.

Communicating what the issues are, what they mean for individual employees, and what needs to be done to correct them offer some of the most effective ways to fix problems and create a culture of compliance.

10. Regularly Review Your Compliance Program

Like any good program or plan, reviewing your efforts on a regular basis helps spot weaknesses you can improve upon and strengths you can capitalize on. At a minimum, you should perform a review of your compliance program annually.

However, in some cases (such as certain fields or regulatory bodies), the review might need to be done more often than that.

But regularly looking over your plans, your documents, your training, and your violations – and evaluating if everything is still current and effective – offers a perfect last step for compliance best practices. For more compliance best practices guidelines, check out our in-depth article here. 

By conducting a regular review, you can see what’s working, what’s not, and implement any chances your company needs to stay in compliance.

With PowerDMS, you can set reminders and assignments so the review happens on your schedule (proactively) rather than in response to a violation (reactively). Plus, it ensures the review never falls through the cracks.

Managing your compliance efforts can be complex and time-consuming. Turn to PowerDMS as a tool to help get your compliance management and documentation organized and to simplify and streamline your efforts to stay in compliance.

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