Every organization should always be compliant and updated with the evolving standards, requirements and regulations. However, this requires a full commitment from the management.
Compliance is the ability of an organization to meet its legal obligations, usually to protect the safety, welfare and health of other people. The growth of a business comes with compliance that is becoming more complicated. A growing company expects more responsibilities with their employees, benefits, payroll, wages and safety. Here’s why regulatory compliance is important to any business:
To Minimize the Risk of Legal Issues
Complying with government regulations decreases the risk of hefty penalties, business closures and lawsuits. A company that fails to meet compliance requirements may obtain a warning and an opportunity to fix the issue. But sometimes they may face expensive sanctions.
Improve Operational Efficiency
A company that follows security and safety rules prevents injuries, building evacuations and fires which can harm their profitability. Also, rules on employee harassment and discrimination help in creating a better working environment for workers. In turn, this results in more productivity in the workplace.
Increase the Potential to Retain Workers
A lot of compliance problems deal with worker protection. Employees who feel safe and secured in their workplace will want to stay. Failing to take steps to make sure nobody harasses or discriminates at work prevents losing valuable people. To increase employee awareness of your legal compliance obligations, consider including procedures and policies in the employee handbook which mirror these obligations.
Although everybody, regardless of the industry, is looking to improve returns on investments, some people consider compliance in the contest of operational efficiency. However, incorporate compliance into the core business operations instead of a separate function or department can lead to more efficient tasks.
Moreover, good compliance helps in driving better results more efficiently while minimizing risk. Compliance teams must work within their own business and offer counsel to clients based on the expertise they have developed.
Every company deals with operational, financial, strategic and other risks of which intensity tends to vary by industry. For instance, compliance risks in the biopharmaceutical business continue throughout the entire product lifecycle. These risks are compounded in businesses that operate globally as they require compliance with various national regulatory policies and anti-corruption laws.
As good compliance has business value, companies must focus on building great compliance programs and structures that vary depending on the structure, scope and size of their business.