Compliance Mistakes – As an entrepreneur, you likely have many wants: a bull economy, a trusting consumer audience, an office full of cutting-edge tech. Yet, there is one absolutely inescapable need: regulatory compliance. Many of the most important industries are regulated by government agencies to protect organizations and consumers from various threats, and a failure to comply with existing regulations could elevate your risk of attack while subjecting you to various fines and sanctions.
If you have not considered compliance to be a must, you are almost certainly suffering from more than a few major compliance mistakes. Here are some of the more common compliance issues that could be plaguing your business:
An Ignorance of the Value of Compliance
You might identify your business’s value in your products, your branding or your customer service team; few executives would say that their adherence to regulatory compliance is the foundation of their company value. Still, it is important that you recognize that compliance builds value into your business. Not only does maintaining compliance save you from expensive third-party audits, fines and sanctions, but compliance can improve your reputation with your target audience. Clients and consumers like to know that the companies they support are fully committed to safeguarding their data and protecting them from fraud, so strong compliance can be a valuable component of your business’s brand identity.
A Lack of Internal Compliance Audits
Many organizations focus their compliance efforts on the external environment, where they have less control over activity and thus are more wary of risks. Yet, compliance issues can arise in the internal environment, and they will if you aren’t diligent about monitoring for them. You do not want to wait until you are compelled to perform a regulatory audit to consider how your policies and operating procedures might (or might not) be compliant; you should periodically perform your own internal compliance audits to identify any potential issues before they develop into costly regulatory concerns. Experts recommend auditing new, high-risk and crucial processes at least twice a year and as frequently as quarterly, though stable processes might require only an annual audit.
A Failure to Recognize Patterns of Non-compliance
Rarely do regulatory issues emerge as obvious and significant instances of fraud. Rather, issues typically begin as seemingly benign and unrelated occurrences: a layoff, a complaint, a missing document. Yet, in many cases, small issues like these function as smoke that signals an incipient wildfire. If left unexamined, these issues are likely to evolve into larger regulatory concerns that put the entire organization at risk. Thus, risk and compliance professionals within a firm should make use of regulatory compliance software, which leverages AI to track the seemingly small events inside and outside a company to nip non-compliance in the bud.
A Naïve Determination to Do It Yourself
You have many skills, and throughout your career, you have taught yourself how to perform countless dozens of tasks. Yet, there is no good reason for you to assume the responsibility of maintaining regulatory compliance yourself. As a business owner or executive, you already have too much on your plate, and the stakes of non-compliance are too high to allow for any mistakes. Instead, one of your first and most important hires should be a dedicated risk and compliance professional, whom you can trust to keep your company and clients safe into the future.
A Reliance on Off-the-shelf Compliance Policies and Procedures
Every organization is different. Even competitors within the same industry and market will maintain slightly different policies and processes, which can affect their compliance with existing regulations. Often, boilerplate compliance policies and procedures must be adapted again and again to suit the changing needs of a growing business, and because many executives do not prioritize updating their compliance policies, firms can become vulnerable to non-compliance issues with alarming speed. The best solution is bespoke compliance policy development from full-time compliance officers, who will assume the responsibility of keeping compliance procedures up-to-date, freeing you up to focus your time and effort on other matters.
For most entrepreneurs, building a business is not the ultimate goal. You want to see your business thrive and grow — and to do that, you need to maintain compliance with any and all rules and laws applied to your industry. The sooner you recognize the imperative that is regulatory compliance, the sooner you can focus on other aspects of business success.
Review 5 Major Compliance Mistakes You Don’t Want to Make.