Introduction
Procedures and policies lay the bedrock for any business operations. However, without compliance, even the best-laid rules and strategies do not move the needle. Compliance is a looming concern, partly due to an ever-growing number of norms that compel organizations to have a comprehensive knowledge of their regulatory requirements for compliance.
Many organizations find themselves in a tight spot when they do not have the adequate framework to fulfill all their legal obligations. And for that, businesses must follow regulations or requirements enacted either by themselves or the policymakers.
While predicting the future is difficult, companies that keep up with the existing and emerging compliance trends will better station themselves to meet tomorrow's obstacles head-on.
What is Compliance?
Compliance is about the efforts to ensure that businesses are conforming to both industry standards and government policies. In simple words, it is a catch-all term for how well a business follows the governing laws and regulations. These laws vary as per the industry, the company’s headquarters, and its evolving business structure.
Compliance begins at the local tier and needs domain specialists with the knack of the compliance outlook and how it might transform. For businesses, being dynamic in this ecosystem means being agile.
Supplier compliance management is not a one-off exercise. If you are looking to contract out suppliers, Beroe is where you handle your network of supply chain relationships. With Beroe’s compliance program, you can considerably slash the amount of effort and time required for supplier compliance management. We will do the heavy lifting to let you focus on pushing the business forward.
Run abreast of the ever-evolving list of supplier compliance requisites, such as trade compliance, fraud prevention, and diversity. Get in touch with Beroe’s compliance executives and leverage our solution to run your business supply chain with clarity and confidence.
What Do Chief Compliance Officers Do?
As the bureaucratic knots regarding the compliance system get tighter and recent scandals, including Wirecard’s collapse and Twitter’s security slip, more and more businesses - of all sizes - are turning to chief compliance officers (CCO).
Having an efficient CCO is key to a well-oiled compliance program, or else business owners are just figureheads with no real power. CCOs help companies keep pace with the regulatory norms, monitor all the developments, and ensure proper implementation of compliance procedures.
Here is what this staff position brings to the table.
Watches over compliance: Who is adhering and who is not? CCOs gauge and examine compliance throughout the organization, from head to foot. Moreover, they team up with other divisions to orchestrate compliance policies, monitor compliance status, and identify trends.
Manages policies and procedures: Often collaborating with a compliance panel, CCOs devise necessary policies and procedures to ensure the company conforms at the state and federal levels. They then convey the same to the workforce, train the staff, and substantiate employee compliance. With risks in constant evolution, CCOs maintain and rephrase the policies and procedures when necessary – communicating and educating at every touchpoint.
Probes potential breaches: While the aim is to keep illegal, unethical, or inappropriate behavior at bay, businesses sometimes encounter breaches. CCOs dig into any incident or alleged breaches that might go against regulatory or legal requirements.
Types of Compliance
In general, businesses need to meet two significant types of compliance systems - corporate and regulatory - both of which entail a stack of rules, regulations, and practices to adhere to.
Corporate Compliance
Corporate compliance is when a company ensures that it follows all the standards, regulations, rules, laws, and ethical practices applicable to both the business itself and the sector it runs in. This includes state, municipal, and national laws, as well as imposing internal norms to ensure proper accountability and governance.
Examples of corporate compliance include the Patient Protection and Affordable Care Act (PPACA) and the HHS-OIG compliance.
Regulatory Compliance
Regulatory compliance is when a business ensures abidance by the regulations, laws, or guidelines set in motion by a governing body in which the company operates. Some regulatory compliance imperatives affect only a few businesses – mostly large-scale - in a particular industry. Other obligations pertain to significantly broader cohorts.
Examples of regulatory compliance include the Food and Drug Administration (FDA), the Payment Card Industry Data Security Standard (PCI DSS), and the Dodd-Frank Act.
7 Benefits of Corporate Compliance Program
A sound compliance system empowers any business to stay afloat in today’s dynamic ecosystem subject to emerging technologies, industry consolidation, market globalization, and the confluence of financial services.
Organizations betting on cutting-edge technologies to manage their compliance procedures and activities enjoy several benefits:
Help Align with the Corporate Goals
Several organizations’ mission statements consist of insights on the importance of customers, corporate responsibility, and how they benefit society. Compliance programs help businesses move in ways in line with these values. This is because guidelines and policies - when appropriately created - consider not only external laws and regulations but also an organization’s external and internal ambitions. Simply put, it is not just about what is legal (or necessary) or not, but also about making the right choice.
Run Businesses with Confidence
When businesses have defined rules and keep their workforce in the know, they will do their jobs with more confidence. A well-framed and tried-and-true compliance program prevents standstill and helps companies operate efficiently and more confidently.
Avoid Unwanted Expenses and Backlash
With a compliance program, businesses can avoid legal troubles and penalties, which often echo millions (or even billions) of dollars. As a result, they can better funnel these dollars into research & development, access programs, or return to stakeholders. Besides, compliance programs save businesses from getting dragged through the mud by preventing negative publicity and media attention, not to mention the flak due to subpoenas, investigations, and depositions.
Efficiencies Boost by a Notch
The enhanced visibility from compliance programs helps eliminate recurring tasks and streamline regular functions and roles, leading to an agile corporate engine. Also, compliance programs shed light on activities that no longer align with a business’s mission and purpose, ensuring economies of scale that they can plow into more meaningful work.
Keep Regulators and other Shareholders Happy
Companies with a clear purpose, high ethical practices and standards, and cut-and-dried policies and procedures create a solid and long-lasting bonding with regulators and other shareholders.
While it might not attract any privileges or favors, it triggers a healthier conversation about crucial stuff and drives faster, cleaner decisions fueled by a higher degree of trust.
Better Data Availability for Better Decisions
Compliance programs have triggered the housekeeping of technical lexicons, including synchronizing data and systems and keeping things simple and crystal-clear. In addition, they enable accurate, comprehensive, and timely documentation of outflows and processes. This at-scale clarity and data availability improve transparency - critical to well-informed planning and investment decisions.
Enhanced Transparency Across the Board
With businesses embracing a customer-centric approach, transparency has become key to attracting positive customer sentiments. Compliance programs help companies capitalize on this aspect. Case in point, assuring that balancing data comes under the central statement leads to a more credible and constructive interaction. This earned reputational capital with clients will be critical not only during good times but also when things go downhill.
7 Best Practices for an Effective Compliance Program
As the world steers through 2021, at least one thing stays constant – the need for a robust compliance program – as organizations will face the same heavily regulated business ecosystem as ever.
While compliance programs are not one-size-fits-all, they do have a specific basic construction. Let’s dig into each element in turn.
Designate a Compliance Officer/Committee
Identify the internal domain experts, suitable shareholders, and authorities to ensure you have supervision from the go. They must delve into the importance of a compliance program and need to be in sync with the program’s primary objective.
At this stage, you should appoint a person or a committee to monitor and shepherd your compliance program regularly right from the outset. This person - “the compliance officer” - should have clear, regular access to C-suite and the board to brief them about compliance issues and the progress of the compliance program.
Review Policies and Create a Plan Accordingly
Audit the existing policies and procedures to determine a benchmark for future moves. This will help understand how outdated or inaccessible your existing policies could be. Or it can expose a vacuum, showing where you will have to write a new policy or procedure that does not currently exist, but should.
After that, devise a roadmap to steer suppliers away from any misconduct and drive the compliance program to spot any potential misconduct. The number of policies that require updating will ascertain the project’s timing and size.
Staff Training and Education
Conduct a training regime that explicitly conveys your business’s program requisites, with a yearly refresher course that reminds suppliers of the code of conduct and entails any changes. Part of an effective compliance strategy document is ensuring suppliers comprehensively understand the material and how to apply it to their regular office chores.
Communicate at All Levels
Encourage suppliers to proactively communicate on time, whether that implies reporting issues, asking compliance queries, or dealing with ethical concerns. Create a way for the workforce to inform about compliance issues or illegal behavior incognito without the fear of a counterpunch.
Monitoring and Auditing
A successful compliance program should not only oversee how well the suppliers are conforming but also include routine policy checks and updates. Gauge the effectiveness of your compliance program and single out the risks by developing a system of both external and internal monitoring, including formal audits.
Impose Uniform Discipline
Breaches of business policies or procedures are inevitable. As such, your compliance strategy document must outline disciplinary measures for anybody who commits misconduct or fail to prevent it. In addition, ensure that your company’s incentive policies adapt to your ethics and compliance objectives.
Embrace a Risk-driven Strategy
A risk-driven strategy to business compliance involves spotting the high-risk zones within the company and then prioritizing, handling, and tracking those risks. You can measure compliance risks as per business unit, operation, and location. Based on the risk rating, you can efficiently set up control testing. Moreover, you can prioritize the risks based on impact, rating, type, or possibility.
Beroe's Compliance Program for Suppliers
As organizations transform swiftly, compliance programs and strategies are becoming more intelligent and holistic. In the spirit of equipping the industry with new efficiencies, Beroe’s Know Your Supplier (KYS) program offers businesses a robust way to work with peers and partners within and between the global supply chains.
Our industry-leading compliance solution lets organizations analyze suppliers on critical parameters, such as environmental, ethics, CSR, and financial. Additionally, they showcase these ratings and assessments to over 14,000 companies on Beroe's unified platform. What is more, Beroe has paired with leading third-party providers, including Dow Jones, CSRHub, and D&B, for these analyses and data packages.
Drive regulatory compliance and minimize risk exposure with Beroe’s integrated, automated, and embedded compliance solutions. Improve overall efficiency and decision-making through real-time visibility of the company’s compliance status.
2022 Compliance Latest Updates
Drata Rakes in $100 Mn for Security and Compliance Automation, Becomes a Unicorn
Drata, a leading-edge security and compliance automation platform, banked $100 Mn in series B funding that values the year-old firm north of $1 Bn. ICONIQ Growth led the funding deal alongside Salesforce Ventures and Alkeon Capital. Existing investors Cowboy Ventures, GGV Capital, and Leaders Fund also contributed to this round.
The recent funding round comes after the San Diego CA-based company, 16 months after incorporation, emerged from stealth with $3.2 Mn seed funding in January and $25 Mn series A in June.
“Security is no longer just nice to have — compliance is the proof-layer between companies and those they do business with when it comes to protecting their data,” says Drata’s CEO and co-founder, Adam Markowitz. “Companies come to Drata because their own potential customers require them to show proof of security posture before closing a deal, and the proof comes in the form of a compliance certification or attestation.”
For companies, meeting the relevant industry-specific SOC or ISO standard consumes tons of resources per se. Nevertheless, maintaining compliance as their entire arsenal – devices, workforce, vendors, and SaaS integrations – grow is a Herculean task.
Being one of the fastest SaaS providers to attain the “unicorn” status after its inception, Drata automates several such processes by blending with identity providers, cloud platforms, and developer tools. It then extracts and assesses data from multiple sources to offer real-time insights into a firm’s security posture and suggests further necessary actions to become compliant.
“Establishing trust is a core issue our customers face,” says Markowitz. “Sales deals are hanging in the balance of whether a company can show proof of compliance, so being able to show a clean attestation report can be a deciding factor in whether or not a company can grow or attract a larger customer base. We not only help companies prove compliance, which then allows them to attest that they are secure, we implement continuous monitoring of the policies and systems they put in place to keep that trust over time.”
The Cryptocurrency Compliance Cooperative (CCC) Holds First Gathering, Focuses on Minimizing Money Mule Activities and Human Trafficking
The Cryptocurrency Compliance Cooperative ("CCC"), on October 19, 2021, organized its inaugural assembly with the members discussing ways to build a safer realm for the cash-to-crypto customers.
"It was amazing to see representation from so many different organizations in the cash-to-crypto industry at our first meeting, and we are thrilled with the amount of interest that we've received from prospective members since our launch just a few months ago," said Seth Sattler, Director of Compliance for DigitalMint and CCC’s prominent contributor. "This industry can be a crucial mechanism for getting individuals involved with cryptocurrency. Our goal is to make the cash-to-crypto industry as safe and sustainable as possible, and that starts with getting the right voices in the room."
The CCC laid the groundwork for the coming months, shining the light on strengthening private and public partnerships. The nearly 30-member group will focus on creating relationships and clear communication with law-enforcement agencies and officials at the federal, state, and local tiers. But, more importantly, they will join forces to protect customers from the wrath of money mules and human traffickers.
The CCC also welcomed various crucial members, including ComplyAdvantage, TRM Labs, and Blockchain Intelligence Group.
"We are excited to join the Cryptocurrency Compliance Cooperative to raise KYC and AML standards," said Elizabeth Bramlage, CMO for ComplyAdvantage. "ComplyAdvantage's vision is to neutralize the risk of money laundering, terrorist financing, and financial crimes. The CCC shares the same belief that data, technology, and training are at the center of solving these issues."
Frequently Asked Questions
What is compliance?
Compliance is the process of ensuring that companies and their workforce comply with standards, regulations, laws, and ethical practices applicable to their organization and industry. These rules are based on regulatory, legal, and industry criteria.
Why is compliance important?
The primary purpose of compliance is to safeguard businesses. That said, the ROI can be considerable, helping companies avoid abuse, fraud, discrimination, and other practices that interrupt operations and put them at risk.
What are the types of compliance?
There are two types of compliance:
Regulatory compliance: The efforts businesses make to follow relevant external regulations, laws, and guidelines.
Corporate compliance: The schemes and actions companies adopt to ensure compliance with internal procedures, policies, and accepted behavior, alongside external regulations.
How to create a compliance strategy?
Follow these steps to create a sound compliance strategy:
- Determine who will run the entire compliance program
- Review the existing policies and design a blueprint accordingly
- Train employees for compliance policies
- Develop two-way communication at all levels
- Implement a monitoring and auditing system
- Enforce disciplinary guidelines
- Follow a risk-based approach
Get Started with Beroe's Compliance Program
At Beroe, we deliver you an all-in-one solution that encompasses all the essential elements for a successful supplier risk and compliance program. Minimize the downsides of working with third parties so you can maximize the upsides. Check out our Know Your Supplier program.