7 Reasons You Can’t Ignore Complianceadmin
Statutory compliance refers to the process where companies adhere to a set of requisite laws and regulations by the regulatory body or entity. Compliance is monitored either by a governmental agency or an independent concern within a particular sector. These entities oversee practices and policies that companies follow while conducting business. The initiatives taken by organizations to adhere to these rules and regulations are known as statutory compliance management.
Here are 7 reasons why your organization can’t overlook compliance:
- Better Work Systems
Organizations that have successfully complied with rules and standards eventually have better workflow systems within the organization. For instance, under the General Data Protection Regulation (GDPR), if organizations operate outside the EU, user data must be safely stored, processed, and destroyed. This process enables organizations to become better at effective data management tasks or systems. Effective statutory compliance management initiatives will ensure that organizations stay compliant with standards, laws, and regulations. When organizations stay compliant, they have more time and resources that they can use to improve areas within the organization.
- Legal Penalty Avoidance
Given that compliance involves adherence to a set of rules and standards, violating them can lead to ethical and legal ramifications and penalties. For instance, The Reserve Bank of India (RBI) fined a major multinational bank a sum of rupees 4 crores in 2020 for failure to comply with the Banking Regulation Act, 1949. Payroll tax compliance is an area where organizations need to be compliant. Numerous errors and fallacies can occur as they are subject to regular changes, most often from the government.
- Better Brand Perception
When companies adhere to compliance, it creates a better brand image. Other businesses and clients will find it more convenient to approach organizations that are compliant and conduct their business ethically, with trust and transparency.
- Brand Loyalty
As organizations continue to adhere to ethical codes and standards, they acquire a more favorable perception from the public and their stakeholders and existing clients. Stakeholders and clients will find it more comfortable and be more willing to work and foster a relationship with an organization that continues to carry out their processes in an ethical manner that is compliant with a set of standards.
- Competitive Edge
In specific competitive sectors, organizations have to struggle to stay ahead of the curve and do better than their competitors. Organizations that continue to perform well and shine among their counterparts can use the effectiveness of their statutory compliance management initiatives. These initiatives will display the efficiency, transparency, and fairness of their systems that will enable them to stand apart from their competitors.
- Compliance as a Growth Strategy
Given that businesses and industries are constantly evolving, the way businesses are conducted subject to change as well. This brings newer laws, standards, and regulations for organizations to comply with. Organizations have taken to adopting various compliances as a new growth strategy. The Global Head of Compliance and Strategic Regulatory Services at TMF Group Leila Szwarc spoke about how governance and compliance shield companies from growth and how the TMF group decided to use it as a strategy for growth. Going forward, it appears more companies may adopt this strategy.
- Governance Risk Compliance
GRC or Governance and Risk or Risk management and compliance management are used to denote an organization’s initiatives in these three areas. According to a survey by Ponemon and Globalscape, companies have saved an average of 1.43 million USD by enabling GRC technologies. The process of integrating these 3 activities can be hugely beneficial for any organization. Integration can lead to better resource allocation, reduced costs to the company, faster information sharing, and many more benefits.