COMPLIANCE
The areas to be covers in this blog are
- Introduction to compliance
- What is compliance?
- Why compliance programs are essential
- Workplace Compliance
- How is a Compliance enforced?
- Top 10 Reasons to Implement a Compliance Program
- Conclusion
Introduction to Compliance
Compliance is a word that is widely used in our day-to-day activities in various organizations, departments, and units. While the term “compliance” is sometimes used to mean “upholding laws,” today the term is also used to mean “upholding corporate ethics.” The laws and regulations around the world and their operation are becoming more and more complex and stringent in accordance with the trends of the times. We are required by society and our customers to meet new compliance standards.
Compliance is a prerequisite for a company to endure. This is because, if profits are not realized through sound business practices based on upholding rules and ethics, the company will betray the expectations and demands of various stakeholders (i.e., interested parties) such as consumers, business partners, shareholders, and employees, and sooner or later society will no longer tolerate the existence of that company.
What is Compliance?
Compliance means conducting our business activities while observing laws, regulations, and internal company rules and also maintaining a high standard of ethics. The term “compliance” refers to the guiding principles for the actions of company workers and management. Compliance cuts across all sectors, organizations, departments, and disciplines.
A sound compliance program includes the following components: policies and procedures, training, monitoring and consumer compliance response. In addition to being a planned and organized effort to guide the institution’s compliance activities, a written program represents an essential source document that will serve as a training and reference tool for all employees. A well planned, implemented, and maintained compliance program will prevent or reduce regulatory violations, provide cost efficiencies, and be a sound business step.
Compliance is not cheap! While it may require significant additional resources or reallocation of existing resources to implement an effective compliance program,” the government believes “the long-term benefits of implementing the program outweigh the costs.
Why compliance programs are essential
• To reduce the risk of probation and court-imposed programs
• To reduce the imposition of government-designed programs
• To reduce the risk of exclusion from governmental programs
• To reduce the threat of whistleblower or qui tam law suits
• To reduce the imposition of penalties, fines and sentences.
Workplace Compliance
Workplace compliance is essentially risk management on behalf of the employer, which comes in two parts:
- Regulatory compliance: what the organization/business does to comply with external laws/ regulations applicable to their industry; for example, CBN regulates financial institutions, NCC regulates telecommunications industry, NAFDAC regulates public’s health and products consumed and so on.
- Corporate compliance: the policies an organization or business institutes to ensure that everyone within the company complies with both internal and external rules, policies, and definitions of what constitutes appropriate behavior and a safe working environment; for example, employee handbook, code of conduct, Laws such as harassment, discrimination acts, employees’ compensation act and so on.
How Is compliance enforced?
If a company fails to take every protective measure as well as provide quality, appropriate training for the workforce, it will be plagued with discrimination, corruption, accidents, and legal problems (which is unacceptable). Not all companies are motivated to do what is right on their own; therefore, the government steps in with laws, regulations, and hefty financial to prevent them from breaking them. The two major measures are internal and external measures.
- Internal Measures
It costs less time and hassle for the employee and less money for the employer to resolve any non-compliance claims through lodging an internal complaint with the employee’s supervisor or HR department.
The employer has a right to discipline or terminate the offending employee if the employee fails to cease or correct their offensive behavior immediately (in cases of violent or sexual assault, the police should be brought in).
- External Controls
If the employer fails to resolve or put a stop to problematic behaviors/hazardous conditions to the complaining employee’s satisfaction (in a timely manner), the victimized employee can proceed to file a complaint with a state agency that handles workplace compliance.
If no state laws/agencies exist in their state, the employee can file a complaint with a federal agency handling workplace compliance violation. If such an agency finds the complaint legitimate, they will proceed to fine the employer and, in severe cases, help the employee take the employer to court to seek additional damages.
Top 10 Reasons to Implement a Compliance Program
- Adopting a compliance program concretely demonstrates to the community at large that an organization has a strong commitment to honesty and responsible corporate citizenship.
- Compliance programs reinforce employees’ innate sense of right and wrong.
- An effective compliance program helps an organization fulfill its legal duty to the government and other private business associates and partners.
- Compliance programs are cost-effective.
- A compliance program provides a more accurate view of employee and contractor behavior relating to fraud and abuse.
- The quality of care provided to clients is enhanced by an effective compliance program.
- A compliance program provides procedures to promptly correct misconduct.
- An effective compliance program may mitigate any sanction imposed by the government.
- Voluntarily implementing a compliance program is preferable to waiting for the government to impose a corporate integrity agreement.
- Effective corporate compliance programs may protect corporate directors from personal liability.
Conclusion
Employees are not going to simply govern themselves. They need rules and regulations that come with positive and negative reinforcement for policy compliance and defiance. Create procedural checklists for employees to use to make sure they don’t miss anything and know exactly what to do. When it comes to attempts to ensure compliance, positive reinforcement beats negative reinforcement. In other words, rewarding employees for doing the right thing works better than punishing them for doing the wrong thing.
Compliance policies are essential, but they cannot exist in a vacuum; they must be reinforced with robust compliance training!