It’s been a whirlwind couple of months in terms of compliance and the regulatory landscape. Whether you zero in on compliance in the United States or zoom out to the global regulatory environment, a lot of conversation happened in the last few months of 2017, which hopefully will spearhead a lot of change.
In most cases, however, regulatory change can present real challenges and risks for entrepreneurs and growing businesses. As you expand into new territory, or offer new products and services, the number of rules that apply to you increase, and sometimes contradict, one another.
In 2018, companies will need to keep these challenges at the forefront of their annual planning. Following are the top ways companies should be engaging with the need for compliance in the coming year:
1. A unified compliance strategy
Gone are the days when compliance was the responsibility of siloed departments. In today’s intense regulatory climate, it’s critical to have your whole team committed to compliance strategy. Look at Volksvagen: Having skirted compliance with various U.S. agencies as part of its emissions scandal, acknowledged in 2015, the car company did a turnabout and brought on a new chief compliance officer, Kurt Michels.
Michels captured the new spirit of compliance culture at Volksvagen when he said, on the Volkswagen Group’s website’s “New Code of Conduct” page: “We all share responsibility for compliance with the existing rules.” He then went on to say that the role of compliance teams and policies is “to provide help, guidance and reassurance, especially in difficult situations.”
In order to help carry out such a vision at your company, your compliance team needs to be fully integrated with other workgroups, to ensure the best support possible for preventing costly errors. By doing so, companies can avoid the kinds of mistakes that even giants like Volkswagen have made due to a poor compliance culture.
2. Compliance platforms to the rescue
Anyone who has managed compliance knows that the accompanying technology is frequently inflexible, and that legacy software may not meet the unique needs of the business. That’s why more and more companies are turning to platforms that can house all of their compliance data and management efforts in one place.
I talked to Thomas Sehested, founder and CEO of GAN Integrity, a compliance tech platform, and he explained to me that, “In most cases, compliance professionals work with five to 10 technology vendors to achieve basic programmatic goals for compliance management. It’s clear,” Sehested continued, “that in such an important area for global business, compliance groups need more efficient, and smarter, tech platforms.”
Platforms like GAN Integrity are built on the premise that compliance efforts should be more visible to the entire team, in order to keep key players in the know, even as they digitize time-consuming document management. As companies gain access to better compliance technology, they may be able to detect and solve problems sooner.
3. Forward-thinking to head off potential risks
We’ve become accustomed to reading about scandals in today’s news headlines. Those scandals frequently end up costing companies millions in lawsuits and government penalties, while damaging their reputation with customers, business partners and the general public. The sad thing is, most of the problems involved are completely avoidable.
In order to avoid such blunders, companies need to think about the problems that might arise long before they become reality. One of the best ways to do this is is by asking what regions your business might grow into in the coming year. Also, question whether or not you anticipate any employee relations challenges. Think about the regulatory regulations that are in the works, as well. Just because something hasn’t yet been signed into law doesn’t mean that it won’t be soon.
4. Making your values known
The recent Me Too movement, lawsuits against companies like Uber and Hollywood’s Time’s Up initiative demonstrate that compliance needs to be at the center of every company’s culture. While a harassment-free culture is a salient example, goals are the same for everything from environmental compliance to employee relations. Consider the Wells Fargo scandal where employees created unauthorized customer accounts to pad performance metrics.
To successfully navigate the regulatory environment and deliver on core values, companies need to make compliance a priority in 2018. As Sehested put it, “In many organizations, compliance has a bit of an image problem and is thought of as a ‘crisis intervention team’ that simply waits for something bad to happen. In reality, the affirmative effort of leadership in compliance and the technology they use helps to prevent regulatory pitfalls.”
By empowering compliance teams to be a more integral part of operations, companies can develop a stronger culture that will help prevent mistakes, protect employees and respect the rules in regions where they operate.