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 of rules. Together when we talk about Corporate Compliance, it is basically a set of rules and regulations designed by a company to prevent the breach of any laws, codes, regulations etc. which is 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. And 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 which covers a company’s policies and procedures along with the measures through which any violation in the same can be detected out. It can be related to a watchdog in a company which keeps an eye on the changing regulatory climate and also applying the necessary changes to the business so as to gain a good reputation in the industry.
What a company needs to do is make a simple compliance program which is easy to grab and understand. There are professional consultants who have all sorts of approaches and models on compliance programs. The framework should be a basic one which 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 with reference to the applicable laws because the conduct of every employee has an impact on the company’s brand image.
The corporate compliance program shall provide guidance to the employees in their daily work and prevent inappropriate behavior. Employees shall be encouraged to familiarize among 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 which should be in place so as to achieve the objectives well. A strategic planning should be done for the accomplishment of objectives. The actuary department must conduct a risk assessment identifying the risks and probabilities which are likely to affect the company. Not to forget what all 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 which the company needs to follow. The assessment of on-going 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 kind 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 could be made in the program, if any required.