Susana Sierra is CEO of bra compliancethat collects real-time evidence on the performance of a corporate compliance program using Blockchain.
Compliance is not limited to ensuring adequate compliance with each company’s internal rules and policies, but plays a much deeper role within the organization. For example, having a strong compliance program can help prevent corporate crimes that affect a company’s revenues, avoid scandals that can damage reputation and deter current customers, and build confidence to attract new customers. In short, emphasizing compliance has become a tool to protect and improve a company’s bottom line.
An important way to protect a company’s financial performance is to avoid penalties caused by not following a compliance program. This is more common than one might think; for example, according to Stanford Law School data, corporate sanctions totaled more than $1.53 billion by 2022. Sanctions for companies that voluntarily reported averaged more than $95 million, and it was much higher ($241 million) for companies that did not voluntarily report. Currently, the US Department of Justice has a less strict policy for companies that report voluntarily their corporate crimes.
Based on my experience measuring the effectiveness of corporate compliance programs, here are seven hallmarks of a solid compliance program that can help your company improve revenue and keep your stakeholders happy.
1. Reduce operational risk.
To strengthen your compliance program, identify and mitigate potential risks in advance. By doing this, you can prevent disruptions in negotiation processes with customers or suppliers or damage to reputation as a result of violating established procedures or regulations. In addition, such preparedness could help prevent the increasingly common security threats associated with cyber-attacks, malicious hacking and ransomware, which can cripple an operation.
2. Improve efficiency.
Add an oversight layer to compliance performance. That way, your company is more likely to see opportunities to standardize processes and procedures to reduce layoffs, which should save costs and increase effectiveness. It is important to empower the compliance team to take on this proactive role.
3. Reinforce positive reputations.
All management should be committed to preventing and identifying risks so that business leaders can manage complex situations and avoid being involved in scandals caused by bad practices. Not only senior management is essential, but also middle management, as they are often responsible for monitoring the effectiveness of procedures and collecting evidence that best practices are being followed. Protecting and enhancing a company’s reputation should be a priority to increase customer and investor confidence, brand loyalty and market share.
4. Minimize fines and penalties.
If you discover an irregularity, you should immediately investigate or, if necessary, cooperate with law enforcement. Cooperate with regulators can help businesses avoid costly fines, fines, and lawsuits that could impact their bottom line. The DOJ needs an effective compliance program to negotiate Non-Prosecution (NPA) or Deferred Prosecution Agreements (DPAs) and to secure favorable economic deals.
5. Add a level of oversight to a compliance program.
Investors are more likely to trust companies that have strong oversight of their compliance programs, as this demonstrates that the company has good corporate governance, which mitigates financial or reputational risks. In the current environment – characterized by historically low levels of confidence, new and more numerous risks and sustainability concerns – investors are more demanding than ever. That’s why adding an extra layer of oversight to your company’s compliance program can be critical to your bottom line. In the case of multinationals, a well-monitored compliance program should also enable, among other things, to verify that head office policies are properly implemented and adhered to, and that training is effectively understood and delivered.
6. Improve employee morale and retention.
Promoting a positive work environment makes employees more willing to follow compliance protocols to protect the company from losses resulting from bad practices. Create a culture of integrity that permeates your company deeply, so that employees really feel like they are part of the organization and want to do everything they can to the best of their ability. This can also help reduce the costs of employee turnover and white collar crime.
7. Put integrity first.
Today’s times require us to put integrity first as customers, suppliers, investors and society at large have become more aware of the effect human activities have on the planet and have raised the moral bar as a result. It’s important to take steps to demonstrate your company’s commitment to compliance and ethical behavior. This can not only add value and differentiate you from your competitors, but also attract customers who value corporate social responsibility.
Having strong compliance programs can improve the long-term financial performance and sustainability of your business by minimizing risk, optimizing operational efficiency and fostering an ethical culture within the company – one where trust, transparency and accountability prevail to have.
Compliance is more than adhering to policies and regulations – it should be at the heart of the business and help define your company’s behavior based on progressive values.
ukbusinessupdates.com Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?
