7 Regulatory Compliance Best Practices

In order to conduct operations in a fair, safe, and ethical manner, every business needs to adhere to certain laws, rules, and regulations.

While merely ‘opting out’ of regulatory compliance is not possible, the countless laws that organizations need to adhere to can certainly make the compliance process challenging and complex. Faulty or insufficient compliance can not only risk a particular project, but can even get the entire company into hot waters from a financial and legal standpoint.

Regulatory issues are becoming the top priority for organizational heads, business analysts, and company owners, since they realize the importance of getting the compliance requirements spot-on. It is vital to be able to accurately predict the impact of any regulatory change, as well as define and interpret compliance requirements. In addition, owing to the dynamic and fast-paced business environment, these tasks need to be performed as efficiently and quickly as possible – something that is far easier said than done.

In this blog, we will be discussing a few best practices related to regulatory compliance.

Regulatory Compliance Best Practices:

1) Know the end objectives:

Instead of diving right into compliance and ‘seeing where it goes’, you should start off by clearly defining your end objective before working backwards from there. In certain cases, your end goal could be to adhere to a particular regulation or law that will allow you to conduct your operations, while in other cases, you might want to address a particular compliance aspect that is hurting you (a certain fine or violation that you want to bring down, for instance).

Regardless of what the ultimate goal is, you must begin by analyzing and defining this ultimate goal, and pinpoint any particular areas that you need to work on. This process involves visiting and revisiting your organizational goals, and underlining essential results which are important to the various company stakeholders. In addition, you should also establish clear and straightforward metrics that will help you determine the extent to which you are meeting those objectives.

2) Understand your business’ regulatory environment:

Getting to know the various GRC concepts, as well as how those concepts are related to each other, provides business analysts and product owners with the framework to identify the appropriate stakeholders and grasp the pertinent business processes.

You must assess these capabilities in order to identify the relevant groups within the company. In addition, you should also conduct comprehensive research regarding the laws or regulations which affect your business, industry, or region in any way. Reach out to experts within and beyond your organization, and ask any questions that you might have in this matter. Understanding the compliance requirements for your business will enable you to fulfill those requirements in a more effective manner.

3) Develop effective procedures and policies:

Procedures and policies are the driving force behind any company and, as such, are a reflection of your organization’s values. In addition, they offer the framework for the business operations, and act as a guide for the employees. Therefore, procedures and policies can prove to be a useful tool for any company looking to mitigate its regulatory risks.

The key is to make sure that you are effectively tracking, distributing, and managing all the procedures and policies, ensuring that each employee has a thorough knowledge and understanding.

In order to better understand the role of procedures and policies in regulatory risk reduction, think of those procedures and policies as a bowling ball. Your tracking, distribution, and management ability, meanwhile, are the pins that you need to target.

Hence, one of the most important regulatory compliance best practices involve putting down all these requirements and expectations in writing, and communicating them to your employees.

4) Avoid short-changing analyses:

The regulatory compliance environment is dynamic, changing, and complex, which means that business analysts and product owners need to dedicate time and effort in analyzing the overall impact of any regulatory changes. This is particularly important in agile work environments, where companies must understand the importance of thoroughly understanding governance and compliance processes before getting down to the execution.

While it is never a good idea to get what we call ‘analysis paralysis’, it is vital to spend sufficient time analyzing the business processes, regulatory information, wider environment, and any other visual prototypes that can help you comprehend your business’ compliance requirements.

5) Hold your employees accountable:

Some, if not most, businesses do not require employees to put their signatures on specific policies. However, if you think that your employees are a vital shield against non-compliance, you should have some mechanism in place that will help you ensure that they have received, understood, and acknowledged the presence of any such policies.

Avoid trusting obsolete methods, such as read email receipts or paper sign-offs. Instead, establish a sturdy system capable of easily and quickly tracking which versions of the policies that have been signed by which employees. Through such a system, you can effectively keep track of any communications made to your employees, and also ascertain that the employees have understood, reviewed, and acknowledged all those pieces of communication.

6) Track any violations:

Another regulatory compliance best practice involves the ongoing tracking and monitoring of any violations. In order to control regulatory compliance, it is important to keep a close eye on both one-off and recurring violations, and take relevant steps to eliminate – or at least minimize – those violations.

In addition, you should keep a close eye on the costs of these violations, in order to determine their impact on your company’s profitability, productivity, and reputation.

Keeping track of violations and their associated costs is also an excellent way of determining the degree of benefit that you are deriving from your risk-reduction methods – not to mention that it can also help keep your employees accountable for their actions.

Speaking of employee accountability, you need not penalize your workers for every single violation. However, if your employees can view the costs associated with each kind of violation, it will motivate them to do their best to avoid non-compliance.

7) Conduct compliance training:

Training can provide an additional line of defense against non-compliance, especially if your training methods are in line with your compliance policies. By providing relevant training, you can reinforce the most effective processes and behaviors.

Besides, training can also be effective in increasing awareness and understanding throughout your organization.

Final Word:

To sum up, the complex and dynamic nature of regulatory compliance can certainly make it hard for businesses to stay on top. However, we hope that, armed with the best practices discussed in this guide, you will be able to formulate, implement, and maintain effective compliance.