The importance of corporate compliance
Although most people think about making money and enjoying a corporate lifestyle when running their own business, there is much more to it than that. Of course, the satisfaction of doing something you love, seeing your hard work pay off and being your own boss is very rewarding. However, when you're in the corporate world, many things need to be handled correctly first to ensure this happens. One very important area to pay attention to for any company is corporate compliance.
In simple terms, corporate compliance is how any business makes sure that it is complying with the laws and regulations relevant to it where it operates. This normally involves a company's compliance monitoring that all the necessary licenses are prepared, any clinical trials have been completed and that everything required is in place. Compliance will also involve the drawing up and disseminating of company policies to employees so that they are aware of any relevant legislation.
Many businesses see this as a real headache, but it is absolutely essential that you think about corporate compliance in your own organization. But why is this so key?
Stops the regulatory bodies from pursuing you
Wherever in the world you do business, there will be a regulatory body or Government department that you must pay attention to. In the UK, for example, the Food Standards Act 1999 is one piece of legislation that anyone involved with making or serving food must comply with or face the wrath of the UK Government. If you look at China, they have a body called the NMPA (National Medical Products Administration, previously called the CFDA (Chinese Federal Drug Administration), which regulates products and companies in the medical, food and pharmaceutical sector there.
It is vital to be compliant so that your business is not fined, prosecuted or even forced to cease trading by official regulatory groups. An interesting note here is that compliance not only keeps your business safe legally but is also great for fostering partnerships with other businesses. If, for example, you wanted to partner with a Chinese clinical research company to run pre-market trials there, the presence of bodies like the CFDA is reassuring.
Persuades people to do business with you
Consumers are more invested than ever in how a business behaves ethically. They will often use this as a major driver of whether they choose to spend money with you or go to a competitor. If consumers can see that you are compliant with all necessary laws in your region, then it will give them the confidence to choose you. This is especially true if you are required to be registered with certain groups or hold certain licenses to trade. By indicating all of this on your website, you will help to drive more leads your way.
Maintains a positive brand image
Your brand image is extremely important to attracting new leads and carving out a place for your business in its sector. Maintaining a positive brand image will also help you to build up your status as a trusted voice in your industry. Nothing will kill this quicker than falling foul of any laws and the ensuing negative publicity you could then see. Complying with rules and regulations as needed is important so that you avoid this happening.
Helps to develop staff and keep them safe
A big part of corporate compliance is training up your employees to be aware of their responsibilities. It is often breaches by individual staff within an organization that actually causes problems in this area. GDPR is a classic example – this is something your whole company must be compliant with if you deal with anyone in the EU.
Any slips here by staff could see you fined huge amounts. By investing in corporate compliance, you are not only improving the knowledge of your employees but also preventing fines from happening. Having a handle on staying within legal boundaries will help keep staff safe from the stress of breaking any laws as well as the potential threat of being fined or prosecuted themselves in extreme cases.
Make sure you have a corporate compliance plan
The best idea is to formulate an effective corporate compliance plan after auditing your own business to see which areas you need to focus on. When you have it ready, this plan can be sent out to staff so that they can ensure they work to the letter of the law each day. Of course, it should also be something that senior management get onboard with as well! If you do this and take steps to remain compliant, then it will not only reduce the chances of any legal trouble but also help keep staff safe and protect your brand image.