Many organisations think of compliance as a purely legal practice. While compliance management is the process of making sure your business and employees follow necessary laws, regulations and standards, so there is a strong legal component, it is also very much a behavioural practice. This is because ensuring compliance is often reliant on the cooperation of management and staff.
Did you know? According to The Criminal Code Act 1995 (Cth) a company can be liable if an individual is non-compliant within the scope of their employment, even if he or she acted alone.
In order to have the peace of mind that your employees are in compliance and to experience the benefits of effective compliance management, it's important to ingrain the right values, ethics and beliefs within the culture of your organisation — in other words, you want to create a culture of compliance.
Although this isn't something that happens overnight, there are steps you can take to foster a culture that is invested in and values compliance.
1. Develop a strong and agile compliance program
First and foremost, you need to make sure you have a set of internal policies and procedures in place to ensure compliance as well as to handle any breach that may occur, known as a compliance program. An effective compliance program is a fundamental tool in creating a culture of compliance, and the Association of Corporate Counsel Australia recommends it be as specific and detailed as possible, "covering key issues such as bribery, corruption, competition, privacy and money laundering, which clearly articulate the legal position and expectations of the company, in a language that all levels of the organisation can understand."
2. Set the tone from leadership
Culture disseminates from the top down, so your organisation's board, chief executives and senior management need to set the tone and act accordingly to demonstrate the organisation's values towards compliance. Leadership should be directly involved in and oversee the implementation of an organisation's compliance program to ensure it is effectively managing its legal and regulatory obligations.
3. Communicate the value of compliance
Employees are much more likely to commit to a culture of compliance if they understand that compliance can give your organisation a competitive advantage by means such as enhancing brand reputation with stakeholders and avoiding financial loss due compliance breaches, meaning that money can benefit them in other ways. By taking this approach, as opposed to portraying compliance as a necessary evil, your staff will want to get on board with compliance efforts to support the success of your company.
4. Make compliance educational and collaborative
All parts of your business should be included in your compliance efforts. Not only should everyone know the compliance requirements for their positions, but they should also be receiving education and training on an ongoing basis as well as encouraged to share their input and raise issues as they recognise them. By hosting regular training sessions, management and employees will be able to understand the specific risks your company is facing if non-compliance occurs as well as be updated if and when regulations change.
5. Put effective forms of testing and reporting in place
No matter how clear your policies and procedures or how consistent your trainings, creating a culture of compliance involves testing and reporting on whether your compliance program is working or not. Identify and review the objectives of your policies and use empirical data generated from your program to assess how well it is meeting those set objectives. The Harvard Business Journal recommends that in addition to simply tracking metrics independently, you create models that measure the desired output while controlling other factors.
By developing better measures of effectiveness, your organisation can improve its understanding of whether its compliance program is on track or not and what changes need to be made.
Transforming a company's culture so that it is compliance-focused takes consistent effort and resources over time, but establishing that commitment is essential to help keep your business safe and successful.
If you're looking for a tool to help you manage compliance at your organisation, RiskWare's Compliance Module is a single integrated software system that can assist you in achieving a proactive and effective compliance system.
To learn more about how RiskWare is making the world a little less risky, visit us at RiskWare.com.au.