Does your company need a compliance program?

Over the past twenty years of transformation the Polish business language has acquired a great number of terms and new notions that affect the ways in which our domestic firms function on the market today. Compliance is one among such notions.

Until recently compliance was perceived as an unrewarding obligation to fulfil certain regulatory requirements. Fortunately, this standpoint has evolved. More and more companies realize now that compliance management should not boil down to immediate stimulus-reaction mechanism, a response to an identified risk. Instead, it should constitute an element of a long-term business strategy that – apart from the focus on transparent and responsible business – is bound to increase the organization’s resilience and create new opportunities for drawing benefits from mitigating the risk of fraud and irregularities and limiting image-related hazards.

The traditional approach concentrated on perceiving compliance in terms of corporate policing and treating compliance systems as the necessary evil that added to the red tape and triggered additional costs.  For years companies and governments have been investing substantially in compliance programmes, such as the American Sarbanes-Oxley Act (SOX), Foreign Corrupt Practices Act (FCPA) or the UK Bribery Act (UKBA).  Further laws and specific regulations have been introduced in respect of selected sectors, such as the laws applying to pharmaceutical companies, financial institutions or telecommunications firms – these regulations also address specific areas of their businesses. Legal actions instituted against corporations that do not comply with the aforesaid laws have resulted in a frantic onrush to implement new procedures, policies and new rules of conduct.   Such diverse regulations were implemented in various ways that theoretically should assure compliance, but practically have managed to clutter many business processes. In consequence, the enacted laws were misunderstood and met with determined resistance of business circles; they resulted in the decrease of process efficiency and disruptions to internal communication.

It needs to be pointed out that proper solutions in this respect must be adopted, but in the past the implementation of compliance programmes often concentrated on satisfying the appetite “to be compliant”. Organizations seem to have forgotten about the additional benefits to be derived from effective compliance programmes. Our next piece will focus on the costs that may be associated with non-compliance as well as the basic benefits to be derived from effective compliance programmes.

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