Why Maintaining Compliance Is So Important

A lot of business startups and nonprofits overlook one key thing when they are setting everything up. They overlook their compliance. Most companies don't even know what a compliance function is to recognise it, let alone why it's so important.

Compliance is a set of processes that an organization will use to ensure that their organization as a whole and their employees are abiding by internal rules of conduct. They also have to abide by external rules and regulations that are both on a moral and legal level. They can include your ethics policy, the employer handbook, your company's written values, and any policies for complying with legal obligations such as corporate reporting or taxes.

In larger enterprises or manufacturing, it can even include or be housed within general council offices. Compliance tends to reside within smaller organizations more informally within the functions of the CEO, CFO and Head of HR. Your business, no matter what industry it's in, must remain compliant at all times because at any point you can have an unannounced BRC audit and boom - there goes your business if you’re not compliant. Compliance is one of the most important things that your business needs to adhere to, and in this article, we're going to tell you why it's so important to maintain it.

1. It is your duty as a business owner. You have a duty to your community and to your stakeholders. So compliance is your duty as a business owner to maintain. If you run a business, no matter whether it's for or not-for-profit, you benefit from the community's basic services. This means that you owe them a duty to comply with the law. If you are using investors, creditors, donors, or the resources of others, you have to be able to show them that you are regulating your employee conduct and you comply with applicable rules, laws and regulations of your business. Smaller organizations sometimes give very little thought to their compliance function, and yet it's one of the most important things to consider when running a business.In particular, it's common that nonprofits act with nonchalance about regulating employee conduct. The unstated assumption is that because the non profit is doing good, it can be lax about the way in which it does it. But it's a very risky assumption to make and it shouldn't be one that's made by any business at any level or size.
2. Without it, you cannot build trust. If your business is not compliant, how do you expect manufacturing companies, stakeholders, shareholders, clients or employees to trust that you are going to do the right thing? The one rule that every business has to adhere to is to do the right thing. And whether that's by the people that work for you or the people that you work for, including your customers, you have to make sure that you are showing that you are doing the right thing every time. Building and maintaining trust with customers and clients can only be done when you are compliant. You need to be honest and follow through on your commitments and you cannot ensure this unless you are adhering to regulations with proper follow through. The head of the organization can't be confident that others are being honest in their interactions unless there are rules about honesty, in the same way that legal bodies cannot be sure that your business is legally compliant if you're not proving that you are. By maintaining documentation and ensuring that your business is adhering to all of these regulations at all times, you'll be able to build trust. As a business leader, you need to make sure that the people who work for you follow through on their commitments, and you need to do the same thing.
3. You could damage your reputation. It's so important that you are building your brand reputation and maintaining it and being compliant can help you to do that. It can take one comment to ruin your business, even if you've built 20 years of a good reputation. It's no surprise then that a failed inspection or audit could cause your business to spiral downwards and put you in an unfavorable light with various stakeholders and clients. If you are maintaining your compliance, you will be maintaining your reputation so that you can be trusted in the marketplace. If you are not trusted, customers will not want to work with you and they will not want to buy from you, which is going to push your business straight down the drain. Without a strong compliance function, you're going to be like the blindfolded man. Any step you take can lead to an utter disaster and you won't be on top of it.
4. Compliance helps you to define your why. You need to know what your organization does, how it does it, and why it does it, and compliance is going to help you to keep that white in mind. This is what's going to drive and motivate your efforts, and the set of values and ethical principles that your business maintains will guide your behavior. Compliance functions can lead your business to determine the ethics and values that you hold, and it requires you to describe those values sufficiently that people understand them. Refer to them often so that your business maintains its policies. Compliance will require you to organize and train your team members on those values and ethics and maintain that adherence to the rest of the world. Without that, why, you're not going to be able to understand why you do what you do, and neither is anybody else. If your business is important to you, then you will ensure that your compliance is backing that up.

1. Compliance helps you to focus on which behaviors won't be permitted. Compliance, when it's done well, increases efficiency and effectiveness because your team has been trained to know how to do their jobs and how to reason through ambiguous situations. Compliance is not designed to generate and no, it aims for the yeses at all points.If you are able to tick off a list of compliant activities, then you are going to maintain your reputation in your business and you're going to be able to focus on the behaviors that should be lauded and not the ones that should be canceled out. If your business is compliant, you can see which behaviors don't work for you and you'll be able to mitigate those as soon as possible.
2. Compliance can drive your change. Some people think that the purpose of compliance is to rein things in, but it's not really true. It's not inherently conservative at all, and compliance can serve as a powerful long term change maker. It's going to help you to innovate and it's going to help you to evolve your code of conduct that stems from your values. If you can articulate and modify your values over time, you're going to be able to enhance your business and influence organizational behavior. Values are your leverage point and compliance focuses on pushing those values forward. Over time those values may evolve and you being compliant is going to help you to adhere to that.
3. You can maintain a consistent business. If you don't have a strong compliance function, your decisions are not going to be linear, they're going to be ad hoc, and they may be made in a vacuum. When you articulate your values, your code of conduct, and your ethics policies, you'll be able to have reference points for any decision making, and that will be as a matter of routine. All events in your business require a solution, and they require a policy, a principle, or a rule to adhere to. Once you've done this and you've developed those principles, adhering to them keeps you above board.
4. Compliance can help to reduce errors. To err is human, as they say, but that doesn't mean that ignoring a rule book or a guide book is the right way to go. If you have the compliance document that you can tick against, then everybody needs to be trained on it so that you can avoid those errors. Risk management and unforced errors are the most common risks to a performance of an organization, and with compliance rules in place, you can avoid those. Risk is not just about the outside forces that can affect your business, it's the threats and opportunities that are generated internally that can be the hardest things to manage. Lean management systems are important for that reason, as they can seek to make waste visible and you can then improve on those things over time.

If you want to create a healthier environment for your organization that maintains compliance and stays above board, then you need to speak to a company that can take a look at your compliance policies. Keep your business in the green and make sure that you pass every order and inspection with the right compliance.