In today’s modern compliance culture, large businesses face pressure to have and maintain compliance programmes in place. These programmes help meet legal and ethical requirements, safeguard an organisation from financial loss, and maintain the credibility of the company.
However, having a qualified compliance officer and an effective compliance programme in a large organisation poses some real difficulties. Managing a regulatory environment and building a culture of compliance are just two of the many hurdles businesses have to overcome.
What is a Corporate Compliance Programme?
A compliance programme is an organised and structured system that helps a corporate entity to comply with relevant regulations and laws along with internal policies of the company. It is aimed at protecting the company from potential infringement of laws, unethical activities, and brand damage.
Certain elements such as risk evaluation, employee education, internal evaluation and disciplinary actions to encourage compliance with ethical business and legal rules are the factors making compliance programmes efficient.
Understanding the 3 Pillars of Compliance
Achieving efficient compliance in business usually pivots on three main pillars:
- Regulatory Compliance – Focusing on the laws and regulations pertaining to the industry of interest
- Ethical Compliance – Encouraging and establishing ethics in the decision-making process of the company
- Operational Compliance – Establishing policies and processes within the organisation that fulfil legal and business objectives
Top 8 Compliance Challenges For Large Corporations
Acheiving compliance in the workplace can be challenging, especially for large companies. From regulation complexities to added risks from technology use or third-party participation, here we outline these challenges:
1. Overcoming Complex Regulations
Corporations face unique compliance requirements consisting of jurisdictions like GDPR, FCPA, and AML. The sheer number of evolving regulations paired with boundaries set by individual jurisdictions make it complex and tedious to comply with all of them. If a firm fails to remain compliant, they open themselves to unnecessary reputational harm and hefty fines.
2. Integrating Compliance Policies Internally
Compliance is not only the responsibility of the legal department; in large organisations, other crucial departments such as human resources, finance, and operations also have to manage internal compliance policies. Ensuring that compliance is internalised across all of departments is crucial to maintaining compliance.
3. Overcoming Resistance to Change
Compliance as a concept is often unconsciously misused by employees who might not understand its importance. Employees may exhibit some form of non-adaptive behaviour by ignoring new policies, avoiding compliance training, and failing to report compliance violations. This effectively makes programmes ineffective.
Combating this requires careful and effective compliance communication strategies with handy compliance change management and good management support.
4. Promoting Consistent Compliance Training
For compliance training to be effective in a large company, policies must be presented in an engaging, up-to-date format and easily accessible to all employees. Simply offering training isn’t enough—companies must actively encourage participation to ensure consistent compliance across the organisation.
5. Mitigating Compliance Risks from External Partners
For larger businesses, the presence of several suppliers, vendors, and partners constitutes additional compliance risks. Enforcing policy and regulatory compliance at the third-party level is a major endeavour that requires significant due diligence and ongoing monitoring.
6. Ensuring Compliance While Supporting Business Growth
Businesses need to balance the rigor of compliance enforcement with achieving operational efficiency. Overly strict compliance will slow decision-making and innovation, while weak compliance will increase risk exposure legally and financially. Managing these parameters appropriately is essential for effective growth.
7. Adopting Technology for Compliance Tracking
Manual implementation of compliance systems for large organisations can be time-consuming and quite ineffective. Nonetheless, onboarding compliance software and automation is often challenging and expensive. There are many IT technology selection issues, system integration problems, and staff training compliance management issues that need to be solved.
8. Building a Compliance Culture
A compliance programme needs a strong ethical culture to be effective. Employees should feel confident reporting misconduct, and clear systems should promote transparency in decision-making while keeping everyone informed about leadership’s goals and objectives.
