What all does a company need to do in the name of corporate compliance
The word Corporate Compliance is composed of two words – CORPORATE and COMPLIANCE. The term corporate refers to a large company or group and the term compliance refers to the adherence to rules. Together when we talk about Corporate Compliance, it is a set of rules and regulations designed by a company to prevent the breach of any laws, codes, regulations, etc. which is a must for a company to comply with.
India is a developing nation and today we are living in an era where the governments keep coming up with numerous circulars, notifications, amendments, and laws with each passing day. Therefore, proper knowledge is utmost required to deal with all such increased regulations notified by the government, especially for private and public companies.
Compliance runs parallel with governance and risk management. Corporate compliance can be referred to as a program or code of conduct that covers a company’s policies and procedures along with the measures through which any violation in the same can be detected. It can be related to a watchdog in a company that keeps an eye on the changing regulatory climate and also applies the necessary changes to the business to gain a good reputation in the industry.
What a company needs to do is make a simple compliance program that is easy to grab and understand. Some professional consultants have all sorts of approaches and models for compliance programs. The framework should be a basic one that restricts a company from violating rules and regulations because the more complex a corporate compliance program, the more difficult it is to communicate to employees and stakeholder groups. The aim should be to highlight and explain the key aspects of complying with the designed set of the program rather than an exhaustive list. Lawful conduct is required at all times concerning the applicable laws because the conduct of every employee has an impact on the company’s brand image.
The corporate compliance program shall guide the employees in their daily work and prevent inappropriate behavior. Employees shall be encouraged to familiarize themselves which would help them in enhancing their performance level also. The compliance and legal department of the company shall align policies, procedures, and actions within a process that should be in place to achieve the objectives well. Strategic planning should be done for the accomplishment of objectives. The actuary department must conduct a risk assessment identifying the risks and probabilities that are likely to affect the company. Not to forget what qualitative and quantitative measures can be taken to sideline them.
The most important part is communication and education. The employees shall be communicated with the best understanding of the standards and procedures that the company needs to follow. The assessment of ongoing compliance shall be done by the internal audit department by inculcating special reviews in the compliance program to ensure that controls are operating effectively.
In creating an effective corporate compliance program, what seems to be the toughest part is to stop the employees from committing any illegal or unethical act. There may be some individuals in a company who may try to take advantage of certain loopholes for their own gain. For such kinds of people, punishment must be decided by putting a restrictive clause in the compliance program.
After done with all the necessary implementation in relation to the corporate compliance program, the next step is to monitor the progress and keep a check on it so that adjustments can be made in the program, if any are required.