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5 Best Practices For Successful Compliance Management

Compliance management is getting more challenging. Not only are legislators and governments around the world imposing more regulations, but the expectations placed on compliance leadership to manage an expanding scope of compliance oversight is growing every day. The periphery of compliance – including ethics, diversity, ESG, and risk management – asks ever more of compliance leaders who are seeking to best manage, scale, and address compliance demands efficiently and effectively.

Compliance management is centered on ensuring that an organization is aligned to and conforms to applicable laws, regulations, and organizational ethics, standards, and policies. Yet, the best compliance programs do more than just align an organization to the letter of the law or specific legal requirements. They have the capacity to demonstrate that an organization is well-run, ethical, can be trusted by its employees, customers, partners, community, and regulators. When compliance programs are seen as beyond the specifics of a regulation and reflect an organization’s commitment to responsible business practices, ethical cultures, and organizational integrity, they become a vehicle for sustained growth and profitability.

Holistically, an organization’s compliance program helps facilitate and represent the organization’s workplace culture, values, and reputation, as well as its broad business risks. Noncompliance and its potential to harm relationships with employees, partners, customers, and the market is a significant risk that should be viewed within the scope of an organization’s risk management approach. And as part of a broader GRC program, with deep connections across governance, risk management, and compliance, program leaders can gain unprecedented risk visibility, reporting, and actionability. In an increasingly volatile world, best practices necessitate increased data sharing, centralized management, and program performance measures and accountability.

Nearly half of the survey respondents--44%--identified compliance assessments, control testing, and policy and process updates as the main compliance management challenges they are facing.

MetricStream’s 2021 State of the Compliance Survey Report

Rising Up to the Challenge of Compliance Management

Virtually all organizations need compliance strategies in place to determine potential compliance risks, identify pathways to manage and mitigate them, and define future compliance needs and courses of action. Any business that seeks to assure buyers, investors, partners, and employees of its legitimacy and integrity should have a demonstrable compliance program that’s aligned to and current with regulations and expectations. The most efficient means to ensure alignment with regulatory requirements, policy updates, employee attestations, and reductions in potential compliance gaps or violations is the acquisition and application of purpose-built compliance management software.

Technologies built to ensure efficient and effective compliance, regulatory update, policy, and procedure alignment enable businesses to identify, prioritize, investigate, and address compliance vulnerabilities and violations before they morph into broader or destructive events. With a rapidly evolving regulatory environment, multiple technology options, and sometimes contrasting enforcement agency guidelines, it is important to define best practices and steps to ensure they are put in place.

Five Best Practices for Prioritizing and Building an Effective Ethics and Compliance Program

1. Be Proactive in Managing Compliance and Ethics

An organization’s readiness to handle compliance issues is critical as it may impact organizational strategies, employee morale and retention, reputation, brand value and profitability. To that end, successful businesses need to be proactive in terms of establishing compliance controls and processes, defining accountability, and centrally managing compliance programs so they are easily accessible to all stakeholders. Being proactive also requires compliance professionals to collaborate with other departments – risk management, legal, HR, and audit – to best manage compliance processes, controls, templates, and timelines. This approach gives the compliance team comprehensive visibility into organizational compliance performance and requirements, so they can perform regular or ad-hoc assessments to minimize violations and enforcement actions.

2. Adopt and Communicate an Ethical Profile

An ethical workplace culture with defined standards and expectations helps an organization operate effectively and efficiently. The foundation of an effective ethics and compliance program is a strong and well-communicated code of conduct, which may most closely represent organizational standards, values, and culture through core policies, procedures, and behavioral expectations. When the organization has multiple subsidiaries or third parties spread across divisions and geographies, code and policy development should consider local cultures, customs, and sensitivities to ensure applicability and commitment. This helps minimize gaps or loopholes in compliance practices. Automated tools can add further value by simplifying the process of policy development, approval, distribution, attestation, and management.

3. Train Employees on Compliance Policies

Organizations cannot fully comply with regulations if its employees do not follow organizational policies and procedures. Investing in employee training as regulatory changes and policy updates necessitate is a best practice. Employees need to understand and commit to the organization’s culture and its ethical boundaries, and depending on specific roles and locations, to additional compliance requirements. Technology plays an important role in the creation, legal alignment, learning management systems, tracking, and validation of ethics and compliance training. Many organizations must deliver multiple compliance training courses to align with applicable regulations.

4. Integrate Hotlines with the Compliance Program

Many organizations have made whistleblower hotlines available to employees to enable them to report ethical and compliance concerns, including unethical behaviors, harassment, corruption, fraud, discrimination, and other episodes of misconduct. In the United States, any publicly traded company is required to have a hotline in place, as well as the compliance management tools necessary to manage investigations, review and close cases, and to transparently demonstrate ethical and equitable enforcement.

Most hotlines enable anonymous reporting and follow up, along with the means to triangulate reporting and data. Integrating hotlines with the company’s compliance program is a best practice – even where it’s not legally required – to help identify and manage conduct issues, as well as to assure employees of a responsive and non-retaliatory approach to hotline reporting.

5. Adopt a Risk-Based Approach to Compliance Management

A risk-based approach to compliance and ethics management involves identifying, scoring, and surfacing high priority risks within the organization. As a best practice, risk-based compliance programs enable organizations to capture, consolidate, and centralize risk management based on standards, controls, and measures. By applying a risk based approach across the business, GRC professionals can both showcase best practices in spotlighting the most severe compliance risks from across the business and demonstrate actions taken to actively reduce issues, violations, investigations and fines. Based on the risk rating, organizations can effectively plan control testing, protect the organization from compliance risks, and ensure program defensibility.

How MetricStream Can Help

Few organizations can comply with rules and regulations overnight while adapting to a continuous stream of new regulations. Compliance is a mix of science and art, with obligations to align an organization to a dynamic and complex regulatory environment and an ability to define and enact policies and procedures that ensure a positive culture of ethics and compliance. By leveraging solutions built to streamline regulatory adaptation, policy development, training and issue management, an organization can deliver exceptional compliance programs that can express its values and commitment to ethics into its reputation, market, community, and regulatory environment. A strong compliance program is a strategic investment that pays both qualitative and quantitative dividends. This is the goal of well-run programs.

Latin American E-Commerce Giant Ensures Multi-location Policy and Controls Compliance with MetricStream

A leading Latin American online marketplace software provider with operations in 18 countries and territories across 3000+ official stores, required the right compliance solution to scale their fast-expanding business needs.

With MetricStream Compliance and Policy Management products within our BusinessGRC suite, the company is now successfully improving efficiencies on overall compliance workflows across locations. The costly and time-consuming manual data collation and aggregation in policy and procedure management, compliance assessments, and control testing has been eliminated. With the automation of issue identification, tracking, and reporting processes, the company is experiencing accuracy in management reporting.

Read the Case Study

Streamline Regulatory Compliance Management with MetricStream

MetricStream’s Regulatory Compliance Management products equip your organization to effectively manage regulatory compliance management requirements. Save time, costs, and resources with automated workflow, collaboration, and real-time reporting capabilities. Establish a centralized framework and map regulations, risks, controls, and issues to the respective business functions, locations, and legal entities. Empower your senior executives with comprehensive visibility into compliance processes, enabling them to stay on top of regulatory obligations.

Take a comprehensive approach to Regulatory Compliance Management with:

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