Treating compliance as optional can land a company in hot water. Besides expensive government fines and penalties, employees may start to jump ship. Once they know their professional reputations might be on the line, they’ll take steps to preserve them. Existing and potential clients could also turn away, driving the need for crisis communications and reputation management services.
With the rising complexity of compliance requirements, it’s not unusual for businesses to struggle. Regulations change, and new data security threats keep increasing. Yet claiming ignorance about compliance obligations isn’t an option either. To stay on top of complicated and evolving stipulations and standards, business leaders need sets of best practices and guidelines. Below are four tips for handling compliance’s convoluted details.
1. Use Governance, Risk, and Compliance Software
When employees don’t have the right tools at their disposal, they have more obstacles to overcome. Imagine a crew attempting to assemble the frame of a home without a nail gun or stud-grade lumber. They might still complete the job, but it would take longer, and the result wouldn’t be up to code.
Expecting employees to use spreadsheets to manage compliance is comparable to asking them to build a house like that under-resourced construction crew. Although you can share spreadsheets as working documents via the cloud, they’re tedious and static. It takes diligence to keep spreadsheets updated and time for people to read through everything and make the connections. Plus, spreadsheets lack security control measures and monitoring methods.
A governance, risk, and compliance solution, or GRC tool, is more dynamic than spreadsheets since it has built-in security controls. The software can analyze where a company’s processes might be lacking and identify areas for improvement. GRC tools also keep employees up to date on changing regulations and help departments prepare for audits. Overall, visibility into how each department’s processes and actions impact the entire organization increases.
2. Perform Internal Audits
When your business goes through an internal audit, it can reveal whether specific processes are working as intended. Internal audits might uncover issues with insufficient training or awareness among staff members, wider cultural issues, or inadequate procedures. A lack of understanding, a dismissive or lax culture, and weak processes may lead to noncompliance.
McKinsey & Company states the objective of internal audits is to support leaders in protecting organizations’ resources and reputations. Yet another goal is to maintain operational sustainability, which has become more complex in recent years. Remote work schedules have created new security risks. Identifying real-time threats and responding effectively to them is increasingly important. Operational environments are also changing more rapidly than before.
Therefore, companies may need to strengthen internal audit procedures and tools. A combination of human oversight and AI-driven analytics is necessary to uncover security and compliance flaws. In companies where remote work is the norm, audits might discover the need for different data transmission and storage practices. More robust cybersecurity tools for remote employees and their devices could also help an organization avoid compliance violations.
3. Build a Compliance Culture
A compliance culture is built on transparency and enforcement. It begins by training employees and letting them know why compliance and data security are critical to the organization’s success. At the same time, a compliance culture involves leaders who encourage behaviors that support that success. Actions that go against regulations, ethics, and industry guidelines are not tolerated.
Managers who help build a compliance culture realize that initial training sessions or courses are insufficient. Staff members need to understand how regulations and industry standards impact their jobs. However, they should also be aware that regulations and supporting job duties and procedures can change. Leaders must stress the importance of remaining agile and what could happen to the business if they don’t.
Employees may need additional training as compliance needs and standards evolve. Simultaneously, workers require access to resources that help refresh their memories or serve as a means of verification. Compliance officers and specialists, in addition to written documents, can help. To monitor enforcement, companies might consider making adherence to compliance requirements and standards part of employee reviews or performance evaluations.
4. Design an Appropriate Strategy
Knowing how regulations and industry standards impact your business and its operations is a crucial first step. For instance, a state’s consumer privacy laws determine what customer data employees can collect, exchange, and store. Furthermore, leaders should assess exactly what customer information the company’s operations require to be gathered, shared, and stored.
If a business does everything in-house, it might get by without sharing client data with third parties. This operational setup could reduce the scope of consumer privacy laws’ impact. Appropriate strategies can address risks and requirements associated with collecting and storing customer data. These methods would also include guidelines and rules for exchanging information between employees.
Part of designing proper strategies involves assessing internal resources and capabilities. Some organizations partner with vendors to help manage security risks and regulations. A business might do this if its IT resources can’t meet the scope of its compliance requirements. Transferring the management of data and network security to outside experts can help companies without enough resources comply with regulations.
Managing Complex Compliance Requirements
High-profile cases involving data breaches and ethics violations highlight the need for complying with regulatory and industry requirements. But with an increase in risk comes a slew of complex changes and additions to an already challenging regulatory environment. Business owners and managers are under more pressure to properly manage threats and adhere to legal and ethical stipulations.
Navigating these complexities is possible with the right tools, procedures, and strategies. GRC solutions, regular internal audits, a compliance culture, and appropriate strategies are some of them. Implementing these recommendations will help business leaders and their teams protect their organizations from the consequences of noncompliance.