Compliance: The Importance of Knowing the Rules!

The importance of compliance in a well-run business is an often overlooked subject.

When a business understands compliance, it comprehends and adheres to the laws, regulations, industry standards, and ethical guidelines relevant to its operations.

Many small operations ignore the need for company-wide compliance training. But firms of any size can benefit significantly from implementing standards and training their staff to properly follow compliance procedures.

This article covers the downstream advantages of a well-constructed compliance program and what it means when you communicate in your branding and marketing campaigns that your business understands and adheres to compliance best practices.

Compliance Focussed

What does it mean to understand compliance?

When your organization comprehends and adheres to the laws, regulations, industry standards, and ethical guidelines relevant to its operations, it fully appreciates and is committed to compliance. Your business can communicate its commitment to the following requirements to the market.

Awareness of applicable laws and regulations

A compliant business knows the laws and regulations governing its industry and location. It stays up-to-date with any changes or updates to ensure ongoing compliance.

Implementation of policies and procedures

Understanding compliance involves establishing and implementing appropriate policies, procedures, and internal controls within the organization. These measures ensure that employees and stakeholders follow the required rules and guidelines.

Ethical business practices

Compliance goes beyond legal obligations.

A business that understands compliance recognizes the importance of ethical behavior, transparency, and fairness. It strives to maintain high ethical standards in dealing with customers, employees, suppliers, and the community.

Data privacy and security

Understanding compliance in an increasingly digital world includes safeguarding sensitive data and protecting privacy. Businesses must comply with data protection laws and regulations, such as the General Data Protection Regulation (GDPR), and take appropriate measures to secure customer and employee data.

Regular audits and risk assessments

A compliant business conducts internal audits and risk assessments to identify areas of non-compliance or potential risks. It proactively addresses these issues and takes corrective actions to mitigate compliance risks.

Training and education

Businesses that understand compliance invest in training programs to educate employees about relevant laws, regulations, and company policies. This ensures that employees know their obligations and responsibilities in maintaining compliance.

Monitoring and reporting

Compliance-aware businesses establish mechanisms to monitor ongoing compliance and promptly identify any deviations or violations. They have reporting systems to address compliance concerns and take appropriate actions, such as reporting incidents or misconduct to regulatory authorities if required.

Setting Up Compliance Policies

For information on how to set up compliance policies, read our article here.

Benefits of Compliance

Reduced legal exposure

Reducing legal exposure not only results is less spending on legal fees, it also increases brand reputation. For example, in the mining industry, firms invest substantial amounts of money in compliance to reduce the risk of employee injury.

The multiple benefits include cutting down on the overall number of injuries which has a net positive effect on employees and management. Plus, there is less legal action taken against the company.

In addition, if litigation does occur, companies following industry and government standards are looked upon more favorably in a court of law. This is not exclusive to the mining industry; companies should abide by industry and government standards to minimize their legal exposure.  See our article on business laws your company needs to know.

Staff retention

Investment in compliance is also associated with higher staff retention rates.

Compliance is a product of a well-run, accountable firm — employees notice this. If your company has problems retaining valuable employees, you may want to investigate whether the systems are creating a stable, fair, and safe working environment.

Higher staff retention rates result in increased operational efficiency. Training new staff members is often a substantial cost for firms that regularly turnover staff — no matter the size of your company, you can save money by investing in retaining staff through increased compliance measures.

Increased efficiency

Compliance training can drastically increase the efficiency and profitability of your firm. Time and money are often wasted by employees who are unaware or unable to follow a standard protocol in given situations.

Rules within the workplace improve operations; if someone is discriminated against regularly at work, they will likely not be an efficient team member.

Ensuring individuals have a safe, fully functioning work environment will positively affect your overall staff output. This is one of the primary reasons it is vital to give your entire team of staff access to compliance training, not just management.

Brand reputation

Compliance assures customers your business is adhering to rules, industry guidelines and laws. Your company can use it’s investment in compliance in its PR, branding and marketing campaigns. Compliance may be what sets your business apart from its competition and enable it to secure more market share.