Purpose of a corporate compliance program. How to establish or refine a corporate compliance program.
No matter what industry your organization is in, corporate compliance is an essential part of operations.
What is corporate compliance? Simply put, corporate compliance is the process of making sure your company and employees follow the laws, regulations, standards, and ethical practices that apply to your organization.
Effective corporate compliance will cover both internal policies and rules and federal and state laws.
Enforcing compliance in corporate policy will help your company prevent and detect violations of rules. This can save your organization from fines and lawsuits.
Corporate compliance also lays out expectations for employee behavior, helps your staff stay focused on your organization’s broader goals, and helps operations run smoothly.
This process should be ongoing. Most organizations establish a corporate compliance program to help govern policies and compliance.
The Purpose of a Corporate Compliance Program
A corporate compliance program is a formal system to help your organization maintain compliance in all areas of operation.
The program will focus on upholding policies and procedures that prevent the organization and employees from breaking laws and regulations.
An effective corporate compliance program integrates all compliance efforts – from compliance with external regulations to compliance with internal rules and procedures.
Ultimately, the purpose of a corporate compliance program is to protect your organization. When employees are trained in compliance, they are more likely to recognize and report illegal or unethical activity.
This can help your organization avoid waste, fraud, abuse, discrimination, and other practices that disrupt operations and put your company at risk.
Maintaining compliance enables your employees to do their jobs well, keep customers happy, and reach their career goals. In turn, this helps your company grow and achieve organizational goals.
By making sure all areas of your organization are working together and maintaining standards, corporate compliance can help prevent major disasters and failures.
In the event that your organization does face a lawsuit, your corporate compliance program will help you in court.
As one report from Rutgers School of Law put it, “an organization that has made a robust effort to prevent and detect violations of the law by its employees and others acting for it will be treated less harshly than one that was indifferent to complying with the law.”
How to Create a Successful Corporate Compliance Program
Your organization can’t afford to ignore the need for a corporate compliance program or create one as an afterthought.
The program should be well planned and implemented, with coinciding training programs to guarantee personnel are well versed in all areas of compliance.
Here are a few steps to establish or refine your corporate compliance program:
Get your leadership on board
Your corporate compliance program won’t run itself. There must be one person who’s responsible for managing the program day-to-day.
Depending on the size of your organization, you may have one compliance officer or several. But in any case, those in charge of the compliance program must have the authority to enforce the rules and hold staff at all levels accountable.
Those running the program must have direct access to the company’s governing body – which may include senior management or the board of directors.
That governing body should regularly assess the effectiveness of the corporate compliance program. They should also take action when they learn of a potential compliance issue.
Corporate compliance is about fostering a workplace culture that values integrity and ethical conduct.
This starts at the top.
In order for your corporate compliance program to work, your organizational leaders need to abide by the rules.