COMPLIANCE FUNCTION

 

While most organisations recognise the need for a compliance function, the complex nature of this essential structure renders many unsure of how to establish a comprehensive, dynamic and specific programme that addresses the basics and ensures the organisation remains compliant in all spheres.

 

“Many organisations opt to leave this function to their legal department but unfortunately not all firms have a legal department. Even in those who do, elements can be missed resulting in non-compliance with some aspects,” Enthuses Greg Chamberlin, Business Development, Compliance at LexisNexis South Africa.

I know I need a Compliance Function, but what do I do next?

LEGAL AND REGULATORY RISKS:

Identify the industry specific, as well as the general operational regulations that apply to your organisation and ascertain the extent of the impact these have on day-to-day operations. These carry the risk of fines, penalties or even imprisonment for non-compliance.

FINANCIAL IMPLICATIONS AND RISKS:

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Loss of public confidence or market share, economic downturns or penalties resulting from non-compliance will have a financial impact on an organisation. The compliance function needs to identify risks to future earnings.

OPERATIONAL IMPACT:

Factors that may have an impact on business operation such as risk of strikes or restricted supply of raw materials could result in operational shut down.

INTEGRITY RISKS:

Negative publicity or brand damage as a result of product failure – or even the implication of failure, as well as social media behaviour, can lead to the loss of confidence of an organisations customer base as well as within the staff complement.

 

“Establishing a compliance programme from scratch can be very overwhelming and ensuring that it meets the varied needs of the organisation and is actionable and sustainable can be difficult. Organisations require a tool that takes the guess work out of this process and reduces the impact on human resources from a time point of view,” explains Chamberlin.

 

A compliance function needs to ascertain the risks that apply to an organisation relating to the legal, regulatory, social and economic aspects of operations.

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