Looking into a dictionary, one can find that the word“compliance” means that an individual or a group conforms with or obeys a set of rules or regulations determined by the law or any governing body.
When it comes to a business and corporate management, compliance refers to the company obeying all of the legal laws and regulations in regards to how they manage the business, their staff, and their treatment towards their consumers. The concept of compliance is to make sure that corporations act responsibly. So why is this important in a business?
Listed below are the benefits the concept of compliance brings into any business.
Avoidance of Criminal Charges
This is, perhaps, the most beneficial importance of compliance in a business. No business wants to face criminal charges for not adhering to the law. There are so many different regulations and laws in regards to how a business should manage its staff, how stock is handles, how advertising is handles, the rules of engagement when buying and selling, rules on negotiating with customers, on employee salary, safety rules, and so many others. With a proper compliance kit and proper compliance management a company can stay on the light side of the law.
To keep track of all these different compliance requirements, it is important for a business to have two different things. First it must have a compliance department headed by a Chief Compliance Officer (CCO) and this department will monitor all of the compliance guidelines, issues, cases, and projects. Secondly the company must have a compliance kit. These kits are extensive software and databases that will automatically keep track of all the information and will help audit court cases, compliance risk management factors, performance management, and others.
Building Positive Reputation
The success of your business pretty much depends on its public image. When a company starts facing several court cases,the general public will lose their trust in the company and sales in products and services will eventually drop. Compliance will ensure that a company can uphold a positive image and build consumer trust. This also helps build consumer loyalty, since customers are more likely going to return to a service or product from a company they identify as trustworthy.
This also helps a business with sponsors, advertisers, and government requirements. A business that fulfills regulatory business compliance through successful corporate compliance management generally gets signed quickly and easily whenever needed. They also pull through incidents like individual court cases discreetly before it grows into a public concern.
Higher Productivity in the Company
Internal compliance to safety, wages, employee benefits, compensations, and employee protection will create a positive environment in the work area. Employees are more fervent to work when they feel that that they are well compensated for their efforts and that they are safe within the business’ reach. It is important that internal compliance is adhered to, since it will ensure that employees are satisfied and that all complains or issues are monitored and addressed properly before they grow and affect the entire corporation.
There will always be set rules to make sure everything is fair and safe for the company, its staff, its consumers, and even its competitors.
With the right compliance kit and a good compliance auditing department, a company can achieve all of the aforementioned benefits and work towards higher productivity and better market performance.
Gary Trainor is the CEO of Infinisource, a HR administration company with headquarters in Coldwater, MI and Charlotte, NC. Mr. Trainor has more than three decades of HCM industry and management experience that includes almost 20 years at ADP as Division President.