Compliance Management – Stay safe
Generally, compliance refers to the act or process of conforming to a rule, such as a specification, policy, standard, or law. A compliance officer, sometimes called a compliance manager, is appointed by businesses, organizations, or individuals to assure that they conduct business in full compliance with national and international laws and regulations, policies, professional standards, accepted business practices and internal standardization procedures.
As there are increasing number of national and international laws and regulations to rule financial transparency, legitimate transactions, investment ethics, company formation and function, organization operational requirements, customer rights, etc., the use of consolidated and harmonized sets of compliance controls is imperative for many business sectors. Regulatory agencies and standards vary among fields, with examples such as EBA for credit institutions, investment firms and payment service providers (PSPs), EASA for Aviation Industry, EMSA for Maritime business, HACCP for the food and beverage industry, etc.
Compliance management for a firm is the most effective shield against legislation and applicable regulation violations resulting in heavy fines or prosecution, including both civil and criminal enforcement, and subsequently a substantial financial and prestige loss. Especially for companies, including law firms, that take the challenge to rise from traditional business models to quest international collaboration (the most likely source for long term growth) regulatory compliance is not only risk management but also a source of value added services to clients.
Compliance officers must be prominent professionals that have an extensive knowledge of the company’s operation, goals and culture, as well as of the greater industry and standard business law. They are charged not just with keeping a company’s business dealings ethically sound and legally shielded, but with establishing a compliance monitoring system that will ensure that all necessary requirements can be met during every day operations.
A regulatory compliance monitoring program, usually includes :
- Defining company policy on regulatory compliance
- Establishing procedures to assure the necessary level of knowledge on existing and emerging regulatory compliance requirements across the organization.
- Developing the annual compliance monitoring audit plan customized on company’s activities and practices.
- Guidance and training for the personnel on the compliance monitoring program.
- Internal audits and inspections of departments and independent investigation on regulatory breaches.
- Reporting and follow up procedures
- A scheme of managing deviations and mitigating actions.
- Procedures for recommendations to the administration on updating internal regulations, policies and practices to reduce the risk of the organization breaking laws and regulations.
- Interacting with regulators on compliance issues.
The task for compliance officers is to establish, oversee and monitor the implementation of the compliance program, to lead audits and inspections, to work with management and staff, to track and prove recommendations for remediation of identified exceptions or deficiencies, and to collaborate with the administration to follow up on timely remediation. They are independent from the departments of the company and they report directly to the CEO.
The educational requirements of regulatory compliance officers may vary, depending on the industry or field. However, various industries or fields such as law, accounting, science, and financial management require regulatory officers to possess at least a Bachelor’s degree, several years of professional experience, and some specialization or education in the relevant field. The most important asset though for compliance officer is that he/she must always be vigilant in order to stay aware of where possible regulatory breaches might occur.
Experienced law firms offer external advisory for establishing Compliance Management System, monitoring compliance programs, they provide support to handle correctly the legal risks within the company and recommend standardization of practices to avoid or to handle effectively critical situations.
