By David A. Pavuk, J.D.
Director of Compliance and Efficiency
Trivalent Group, Inc.
With a seemingly ever-growing onslaught of new laws, regulations, licensing rules, and auditing agencies, compliance management is a language many organizations are quickly learning to speak. But what really is compliance, and why all the bother? One of the definitions of the word “compliance” is “conformity in fulfilling official requirements.” This would seem to be a fairly simple and straightforward concept. All you have to do is know the things that you need to conform to and then adopt and react accordingly, right? But that is the rub then, isn’t it? Quite often, the trick is knowing which aspects of compliance truly affect your organization and which ones need to be adhered to. Add to this the fact that it will likely come as little surprise to any organization that has started down the road to compliance that the tasks associated with any such undertaking are not exactly simple to achieve. With all the associated challenges, compliance initiatives can seem a daunting task, to say the least.
At the onset, having to deal with any number of the various aspects of compliance can easily seem to be an unwanted but necessary evil undertaken simply to avoid all the fines, penalties, and other potential ill effects of being placed under an auditing agency’s microscope. But is it more than that? Are there reasons beyond the regulatory sheriff’s guns to develop compliance management? It may surprise you to know that the answer is a very large and resounding YES! You have probably heard the adage that it is what you do which defines who you are. This is no less true in the realm of business management. Adherence to the laws, regulations, and rules both in regard to customers and employees defines who a business is. Viewed in this regard, the acts and aspects of compliance are what help companies ensure they build and maintain strong reputations and relationships. But it does not stop there. Compliance practices lend themselves to a number of positives for any business. Listed below are just a few of the benefits that good compliance management can bring.
Positive Community Reputation
The success of any business depends in large part on its public image. If there is one maxim in business, it is that people will not do business with someone they feel they cannot trust. Compliance, then, in this regard can help ensure that a company upholds a positive image and builds consumer trust and strong and lasting relationships.
Higher Productivity and Employee Loyalty
Internal compliance regarding employee safety, wages, and benefits as well as employee protection from unwanted conduct creates a positive work environment. Employees are happier and more fervent to work when they feel that that they are fairly compensated, appreciated, and safe within the confines of the business they work for.
Avoidance of Legal Challenges and Criminal Charges
When a company faces court cases or worse yet criminal charges because of compliance mismanagement, the public is often quick to lose their trust in the company’s brand. The result is usually a sudden drop in sales and loss of customers. It is difficult to envision a single business that would want to face either of these possibilities.
Stronger Business Partnerships
Business sponsors, associates, and vendors all have one things in common. They look for partners they feel they can trust and are confident in doing business with. Organizations known for fulfilling licensing and regulatory requirements through strong, competent compliance practices and management generally get signed more quickly and easily.
So, what does this all mean? Why do we need compliance? The answer is simple. Being a company that people want to do business with and work for is easily the single most important and beneficial reason for maintaining a strong compliance management practice in any business.