Regardless of industry, all businesses have to comply with regulations. Whether those laws and practices are general or industry-specific, compliance programs help keep companies in line.
Compliance programs are similar to cues drivers and cyclists encounter on the roads. Guardrails and lanes keep people moving within specific boundaries and provide a sense of direction. Signs and stoplights help warn about adverse conditions and prevent accidents.
Compliance programs create figurative guardrails, lanes, signs, and stoplights for employees. However, these programs also give businesses a way to review and track everything tied to regulatory compliance. This can include procedures that apply to specific job roles, department functions, or organizational cultures.
While some aspects of a compliance program are determined by law, others are simply sound business practices. Here are four to consider implementing.
1. Audits and Monitoring Practices
Audits can help determine how well a business’s procedures align with industry regulations and standards. For instance, healthcare organizations have to abide by HIPAA regulations. Businesses outside the healthcare industry might have to comply with separate consumer privacy regulations and laws governing financial documents. External and internal audits show leaders areas where the company is doing well and what improvements they need to make.
Say your business is a cloud services provider that stores data for multiple clients. You want to know whether your data practices and internal controls are secure enough to protect customer information.
Industry guidelines in a SOC 2 audit guide can help you determine whether your business is compliant. Audit guides also identify what to expect from an audit and how to proceed according to industry recommendations.
Of course, an actual audit is a more thorough way to determine where a business’s procedures stand. Between audits, monitoring determines whether practices and procedures are getting too far off track. Monitoring usually includes quality control measures, such as employee observations.
In the education sector, classroom observations determine whether teachers are fulfilling curriculum requirements. These observations are opportunities to identify where individual employees might need additional coaching to ensure the organization remains compliant. Staff members work with administrators to correct deficiencies and enhance existing strengths.
2. Employee Training
Employees can’t implement what they don’t understand or know. Training your staff on how to help the business stay compliant is essential. But so is giving them background information about why a compliance program and its procedures are necessary. While industry vets might have more knowledge than new hires, evolving regulations can mean changes in reasoning or purpose.
Employees who don’t understand or know the purpose behind a compliance program may be less motivated to carry it out. McKinsey & Company’s research shows that 70% of employees define their sense of purpose through work.
Compliance programs and industry regulations often go hand in hand with an organization’s overall mission or purpose. Formal and informal training gives employees a chance to help shape that mission. Courses, meetings, conversations, and on-the-job training sessions bridge gaps between the individual’s and the organization’s efforts. Employees learn how their roles and actions fit into the company’s success, including compliance.
Staff members have a chance to ask questions, voice concerns, and make suggestions for improvements. Their individual purposes or roles within the business become clearer and can provide motivation for executing responsibilities.
3. A Designated Point Person or Team
Every ship needs a captain in order to sail, and the same is true for a compliance program to be successful. Your company should have a point person or team that oversees the program’s design and implementation.
The number of team members will likely depend on the size and extent of the business. A small organization with a single location may only need one person. Larger firms will probably need a group to handle compliance in multiple facilities.
The role of a compliance lead or team is to ensure a program is going according to plan. The point person or team helps identify weak areas where noncompliance is more likely to occur. Compliance teams can also pinpoint where problems are already happening and work with employees to correct them.
Say a compliance officer discovers separate offsite data backups aren’t happening. Some employees are aware these backups should be occurring. However, they let the point person know there’s a lack of tools and internal controls to successfully perform data backups. The compliance point person or team can work with leaders to get staff members the necessary tools. The compliance team could also design better controls, including verification procedures.
4. Documented Procedures and Standards
Even the most photographic memory needs something to refer back to. Written documentation that’s accessible to all employees is just as imperative as face-to-face communication. Documented compliance procedures give employees those signs and guideposts they need as they move along.
Documented standards provide instructions when a live person isn’t available. Employees won’t have to stop what they’re doing and potentially inconvenience a client. They can get answers to simple questions and follow the same standards as their peers.
Written documents give everyone the same rules and ensure uniform application of those standards. However, documentation should be easy to follow. It’s also critical to review written resources periodically to confirm they’re updated and relevant. When what’s in writing doesn’t match what’s communicated in meetings, it creates confusion that can lead to non-compliance. Documents should also apply to job roles so employees can quickly find what they need.
Staying in Compliance
Compliance programs are meant to help businesses follow industry regulations and practices. But to keep companies operating within the lines, compliance programs need to contain certain components to be effective. Some of these include audits, training sessions, oversight teams, and documented standards. Making these aspects a part of your company’s compliance program will increase its chances of success.
