How and when to update Compliance Policies and Procedures?

When was the last time you updated the compliance policies and procedures of your organization based on the changes happening in your line of business or factors impacting your business?

So the pertinent question is, “How and When to Update Your Company’s Compliance Policies and procedures”? In the last few years, numerous companies have gone global and therefore have to deal with global compliance standards. Different departments must be able to work as easily with colleagues in different functions and parts of the world as if sat next to each other. Data from the “2014 State of the Compliance and Ethics Function” show that compliance professionals report three challenges in spotting these kinds of issues. They are:

1. A company’s complex operations.
2. A lack of useful measurement data for the compliance team.
3. Poor sharing of information across functions.

Considering in today’s era all departments are interlinked, it’s important for all the departments to connect with each other better and ensure regulations are being adhered to. On the same lines, Compliance Policies are only useful if they are kept updated. CEB research from 2014 found that the seven most important reasons for writing a new policy or updating an existing one are:

1. New compliance risk assessment results.
2. Revision of the company’s code of conduct.
3. New internal audit findings.
4. Publicized failure in the same or similar industry.
5. Shift in business strategy/risk appetite.
6. Merger, acquisition, or other organizational change.
7. Geographic expansion.

Big banks are seldom let off the hook, such as in May 2017 when Deutsche Bank was fined $41 million for anti-money laundering lapses. This investigation was based on the bank’s insufficient monitoring involving billions of dollars in “potentially suspicious transactions” processed between 2011 and 2015. The transactions involved affiliates in Europe that failed to provide “accurate and complete information,” the regulator said. More data show that banks globally have paid $321 billion in fines from 2008 to 2016 for an abundance of regulatory failings from money laundering to market manipulation and terrorist financing, according to data from Boston Consulting Group. Considering compliance is vast and flows through various departments, non-compliance with certain laws can create more than just fiscally punitive consequences-

1. Hiring – No one expects companies to hire every person they interview. However, asking inappropriate questions and/or engaging in inappropriate conduct and discrimination during a job interview can leave companies vulnerable to human resource matters. The global taxi-technology company, Uber, was subject to such scrutiny when its founder was seen to behave discriminatorily towards women. Such real-life examples have perpetuated the need for laws to be adopted and strengthened to ensure that opportunities are fair to all.
2. Wage issues – where an employer fails to pay wages to employees as per the law of the land, failure to adhere to employment laws relating to payment of employees wages can result in audits and fees, among other repercussions for the business in question.
3. Workplace Safety – As a business owner, you are responsible to ensure the safety of your employees. Not only does failing to meet safety guidelines expose you to lawsuits by employees who were injured on the job, but it may also result in crippling fines from the Occupational Safety and Health Authorities in the particular jurisdiction in question.
4. Licensing – For many businesses, staying compliant requires holding various business licenses and permits. For example, in the United States, a restaurant that sells alcohol must possess a license from the Alcohol and Tobacco Tax and Trade Bureau in addition to a current health permit.

Its a management responsibility to keep their Compliance Policies and procedures updated and protect the Business from Non-Compliance Claims – Compliance requirements can be complex, and business owners may not always be fully educated about the latest rules and regulations. If you’re concerned about your company’s compliance status, Argus (now Waystone Compliance) can protect your business’ legal and financial standing. After all, when it comes to non-compliance issues, ignorance of the law is no defense. Please get in touch with our experts.

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