Compliance management enables businesses to conform to predetermined requirements, whether they come from law, regulations or internal codes of conduct, whilst also assessing the risks and potential costs of non-compliance.
Reporting is a way for businesses to monitor and improve compliance. The Government have stated that transparency through reporting can increase business success and economic growth, as well as promoting trust between businesses.
Compliance management can help businesses to optimize performance and mitigate risks, but there are businesses that are failing to effectively manage their compliance. Below are the top five mistakes that companies make when it comes to compliance management.
Manual Data Collection
As businesses are under increasing pressure to report on their impacts, whether direct or through the supply chain, many attempt to do so manually. Manual data collection can unnecessarily drain both time and financial resources. If you are a large company with vast supply chains, and reporting requires that you collect information from first, second and sometimes even third tier suppliers, you will be left will very little time to manage compliance.
No Data Analysis
This is a continuation of manual data collection. Due to the time it takes to collect data in order to meet reporting deadlines, the data that is presented is not fully analysed. Your compliance data should be analysed in order to indicate what impacts decisions have on your business, which will in turn indicate what processes require development.
A Lack of Central Compliance
Compliance should be key throughout your organisation, no matter what size it is. If compliance is unevenly spread throughout the company with different departments following different procedures, you cannot standardise your compliance. All businesses need to comply to the same policies and procedures, so it makes sense to share best practices between departments and coordinate strategies.
Reliance on Consultants
Many businesses rely on consultants to assist in their reporting and compliance. This may save time but it doesn’t necessarily save resources, it also means that you don’t get a proper insight into your business practices. Effective compliance requires data collection as well as a system of measuring performance, and managing change. It is important to have regular and consistent compliance management so that you can monitor your company’s journey.
No Compliance Management
The worst thing a company can do is to ignore compliance management. Compliance management is not just a selling point; it is a necessity that is of equal important to all businesses. Organisations such as the Global Reporting Initiative champion the benefits of sustainability reporting in order to reflect a company’s economic, social, environmental and governance performance.
The companies that experience greater long-term success incorporate integrated governance, risk and compliance management. It is important to improve understanding in business through transparent reporting – this can help illuminate the link between financial and non-financial performance that can guide long-term management strategy and policy.
via Business 2 Community http://www.business2community.com/finance/5-ways-failing-compliance-management-0598759?utm_source=rss&utm_medium=rss&utm_campaign=5-ways-failing-compliance-management
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