In many companies, compliance is still perceived as an unnecessary additional burden and as a restriction on entrepreneurial activity. There are good reasons, especially from an entrepreneur’s point of view, to tackle the topic quickly and in a structured manner.
Why compliance?
The term “compliance” still has predominantly negative connotations on the executive floors of companies. It suggests both fears of liability and restrictions on entrepreneurial freedom. One could almost think that it is not possible or not entrepreneurial to stick to the rules.
Certainly, compliance does not generate new business. Compliance is part of companies’ risk management and is even an essential ingredient. Used wisely, compliance initiatives can create a “double benefit” for companies. Namely when they serve not only to avoid damage but also to optimize processes.
Discussions about process flow in companies regularly revolve around “core processes” such as “supply chain”, “product lifecycle management” or “CRM”, but the supporting internal processes should not be neglected.
Compliance is a very important internal process. However, the majority of reactions to this have been negative. It’s all exaggerated, compliance stands in the way of quick decisions and doesn’t deliver any value, these are the mildest and most “reasonable” replies.
However, compliance is a boon for every company. Of course, it depends on what you make of it and how you position the issue of compliance in the company.
Existing “compliance bridges” help to establish compliance in the company
There are countless compliance fields that companies have to take care of. Many medium-sized companies that consider compliance to be an unnecessary additional burden do not even know how much compliance they already do today. Because the inherent compliance aspects of their economic activity are not even noticeable in day-to-day business.
Industrial companies take care of waste disposal, occupational safety, and the safety of their products.
Financial service providers cannot avoid dealing with money laundering issues or checking their business partners.
Export-oriented companies deal with customs and export control issues daily. All companies that employ people have to worry about data protection and the equal treatment of their employees.
The original core compliance areas of corruption and antitrust law (particularly price fixing and agreed market behaviour) usually do not play a major role.
There are of course dangers that should never be underestimated. In fact, for the majority of companies, product safety risks in the broadest sense, i.e., dangers that emanate from their products and services, represent far more threatening compliance risks than corruption and price fixing.
Accordingly, companies should align their compliance management systems – with the real risks. Corruption and price fixing should not be left aside. But they should be given the place they deserve in the company’s compliance risk atlas after a comprehensive risk assessment.
If you look closely, there are already “compliance bridge builders” at work in every company. These divisions and functions are not necessarily committed to compliance, but in fact, they do this work indirectly.
Because of their tasks, they also have the greatest reach in the company: Human resources, IT, and quality control. They affect everyone and everyone in the company deals with them.
As a result, many “compliance bridges” no longer need to be built. You are already there. Instead of tearing them down in misjudgment of the multiple benefits of compliance, just because the term sounds so “repulsive”, they should be stabilized, and “driven on” more.
This content is meant for information only and should not be considered as advice, legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
Posted by
CA Aman Aggarwal
AKGVG & Associates