What is the purpose of compliance policies and procedures? In the grandest and simplest sense, it’s to protect the business. Compliance programs are designed to help your business, as a legal entity, remain in compliance with jurisdictional laws and regulations.
It’s never been more important for legal entities to review their compliance programs. Canadian regulators are emboldening RCMP agents to crack down on white collar crime and reduce the impact of fraud or financial malfeasance on Canadian society. Failure to maintain compliance can result in substantial fines, criminal or civil charges, and, in some cases, imprisonment for business leaders and shareholders.
The purpose of compliance policies and procedures is to minimize the risk that these worst-case scenarios may occur. Compliance programs align all key stakeholders on the fundamental principles of the law, enabling all stakeholders of a legal entity to enforce the program and protect the interests of the business.
7 elements of an effective compliance program
What does a compliance program look like? What are the elements of an effective compliance program that should be documented?
Fundamentally, there are 7 core elements that make up a compliance program. These elements are broken down as follows:
Documented policies and procedures
Designated compliance officers
Effective training procedures
Proper reporting programs
Monitoring and auditing systems
Enforcement of compliance policies and procedures
Proper investigations into non-compliance incidents
What is the value of compliance in business?
The value of compliance policies and procedures lies in the program’s function as a predetermined roadmap for the business. Company values and behaviours are framed in operational contexts that outline how the business operates day to day. At its core, compliance helps a business standardize operations and conduct itself responsibly.
Additionally, compliance offers reassurance to your customers that your business abides by certain ethical and legal standards. Customers can rest assured that your entity’s core values are secure and practiced in every way that you conduct your business. Compliance may even give you a competitive advantage in your industry by creating workplaces that inspire customer loyalty and enable long-term growth for your business.
Why are compliance policies and procedures important?
In addition to abiding by the laws of the land and promoting good organizational governance, compliance policies and procedures streamline internal workflows. A well-informed compliance program can help create new efficiencies throughout your business, improving operations in the pursuit of higher growth.
Compliance policies and procedures are the roadmap, and they articulate core values that inform decision-making throughout the organization. Decisions that adhere to strict guidelines, policies, and procedures ensure resources are managed in the most efficient and practical ways possible. Along with minimizing risk and protecting corporate interests, compliance policies and procedures can help improve how your organization functions from day to day.
Use entity management systems to maintain compliance
So, what is the best way to maintain compliance policies and procedures? Since compliance is typically managed by Chief Compliance or Legal Officers, a platform designed to support legal entity management and corporate compliance is the best resource to maintain those compliance policies and procedures.
Cloud-based entity management solutions like MinuteBox have built-in compliance modules that intuitively help your compliance team structure policies and procedures. The compliance framework monitors organizational charts, calendars, workflows, and other templates for any errors, statutory non-compliance, and date-based compliance tasks that may be lacking.
By uploading all compliance data into the platform, your team creates a centralized repository for all organizational data that affects the compliance program. The platform’s intuitiveness automates the workflow and effectively helps your organization follow the jurisdictional letter of the law. You can fulfill the purpose of compliance policies and procedures using entity management software, successfully maintaining compliance as efficiently as possible.