4 Ways Business Leaders Can Make Compliance Less Taxing

Every business has rules and regulations to comply with. It’s keeping track of those laws and industry requirements that can turn into a headache. Adding compliance to the list of things company leaders already have to do may not be welcome, but it is necessary.

Compliance with regulatory requirements and industry standards comes with a unique set of challenges. Lawmakers are constantly adding more regs to the books, and existing laws continuously change.

Industry guidelines can do the same, making navigating an already complex landscape more demanding. While compliance can be a burdensome task, there are ways to make it easier for you and your employees. Let’s review four ways to make the process less of a headache.

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1. Adopt Governance, Risk, And Compliance Programs

Everyone in an organization plays a part when it comes to following laws and industry standards. What one employee or department does (or doesn’t do) impacts the entire company’s ability to follow the rules.

Departments and work groups are known to become siloed or separated in larger organizations. Physical distances and more specialized areas of expertise are typical reasons departments become like mini-businesses.

But information silos and isolated work procedures can crop up in smaller companies, too. Different sources of information and a lack of transparency about various work practices can make it difficult to streamline compliance.

Governance, risk, and compliance programs bring a company’s separate approaches under one umbrella. GRC programs aim to increase transparency and reduce data silos between departments.

Because compliance is so complex, businesses need an approach that can sync what’s happening across departments and workflows. Using GRC tools is a way to view and assess how individual department or employee activities impact compliance.

For example, industry standards may discourage the purchase of third-party lists for lead generation. Purchased lists may violate stricter consumer privacy laws since the individuals haven’t given permission for others to use their information.

While email software may display warnings about third-party contacts, it’s up to employees to follow them. A lack of training and enforcement might lead to violations. GRC programs can identify where vulnerabilities like these exist.

2. Implement Employee Training And Refresher Courses

Systems and programs can’t always account for human error. People usually make mistakes because of poor understanding, communication, or skill. Compliance blunders can become expensive for companies in the short and long run. Preventing human errors that can lead to fines and reputation loss requires designing and implementing effective training programs.

Employee training is necessary to help reinforce compliance policies and processes. You can document the best, most thorough procedures, but people must understand how to put them into practice and apply them in complicated situations.

Most businesses take reasonable actions to prevent data breaches and follow cybersecurity standards, for instance. Some of those precautions might include network security and antimalware software. However, human error causes 95% of successful cybersecurity breaches.

Those mistakes or lapses of judgment might include clicking on suspicious links or downloading attachments with malicious code. Human error can also involve someone disclosing sensitive information to the wrong person because they don’t recognize social engineering. Initial training, refresher courses, and periodic check-ins can mitigate human mistakes and associated risks.

3. Keep Legal Counsel On Staff Or Retainer

Lawyers with experience in your industry or the specific laws your business needs to follow can be invaluable. While larger companies usually have legal counsel on staff, smaller organizations may not prioritize this resource. However, business owners and leaders may find it inconvenient to search for legal expertise when the need arises.

Having access to a lawyer who can navigate the compliance waters can prevent slip-ups and major oversights. Since laws and industry standards might introduce operational complexities, it may be tough to understand how everything should fit together.

For example, sales, marketing, and IT might need to sync or create processes that ensure data security and consumer privacy. Legal counsel with experience in these areas can outline the best ways to get it done.

Besides providing guidelines for larger processes, keeping a lawyer on retainer can also help small businesses with more limited issues. A marketing director may want to issue a press release about a partnership with a prominent vendor, hoping to boost brand awareness and credibility.

However, the vendor’s contract specifies that any press releases must be a joint effort and align with specific timelines. Legal counsel can spot this requirement and help the business avoid violations of the clause.

4. Support Employees Who Speak Up

A 2021 survey of workers revealed that 75% of U.S. office employees have seen a form of workplace misconduct. About two-thirds of those who saw the misconduct occur chose not to report it. Fear of retaliation is often behind employees’ hesitancy to speak up and bring compliance or ethical violations to someone’s attention.

That “someone” may be a direct supervisor, a human resources manager, or an employee behind a reporting hotline. While unintentional human errors can cause compliance issues, so can intentional violations and unethical behaviors. When employees are afraid to report these deviations from acceptable practices, small violations can grow larger.

Supporting workers who speak up shows that leaders won’t tolerate non-compliant and unethical behaviors. Programs and systems can alert leadership about the compliance issues humans may miss.

But systems can’t always fix a culture that doesn’t take other measures to promote transparency and compliance. Incentivizing rather than punishing those who report problems can yield another layer of information for managers to act on.

Making Compliance Easier

Business leaders may have mixed thoughts about compliance. They know they have to do it, but implementing the right programs and procedures involves making changes. Some of those changes might be temporarily disruptive or difficult to manage. But by using integrated approaches, leaders can implement strategies that address the practices and behaviors that determine compliance.

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