To be successful, companies need to follow both legal and ethical guidelines for conducting their business. When there are problems, practices that compromise adherence to laws or breach the standards for ethical treatment of customers, it can put the business in jeopardy. Serious infractions of compliance can result in heavy legal consequences, such as fines or even criminal charges filed against employees. Both legal and ethical issues can quickly destroy a company’s reputation. Here is where a compliance manager comes in.

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Violations of laws and ordinances can put a company in a position to be leveled with heavy fines, not to mention the publicity can be devastating to profits. Ethical and moral mistakes may not put a company in legal jeopardy, but they can be the difference between a profitable venture and financial failure. Compliance managers are the people who work within the company, directly reporting to upper management to see that legal and ethical standards are maintained.

What Is a Compliance Manager?

Compliance managers are frequently referred to as compliance officers, internal auditors, or other titles that designate the scope of their duties. While not officially listed as an officer of the company, they usually prepare the documentation that spells out the legal and ethical standards for behavioral guidelines that employees must follow.

Although they work closely with the corporate and management structure of a company, they are not officially members of the management or part of a board of directors. The job of a compliance manager is to make certain legal and ethical policies of the company easy to understand. Moreover, they need to make sure that all employees follow those rules.

Duties and Responsibilities

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Most compliance managers are in close conjunction with upper management, but their duties are usually specified within strict company bylaws. Depending on the number of legal guidelines a company must follow to comply with local, state and federal laws, the number of actual compliance offers can be large.

There is always a compliance department person designated as the department head. That person may not directly write the documents that employees follow. Still, they assign duties to different compliance team members and make sure that the staff members complete all the work.

Compliance managers as a team, develop the criteria for legal and ethical business practices for the company. However, compliance department managers coordinate all meetings, review and approve all materials, and usually are the single direct connection with upper management. Problems can happen, but it’s the duty of the compliance manager, and those within the department, to minimize the frequency of these types of situations.

Common Duties of a Compliance Manager

  • Recognizes legal problems and ethical violations concerning the company and its employees.
  • Discovers the most efficient sequence of action to fix issues as quickly and effectively as possible.
  • Creates and ensures the enforcement of actions necessary to implement structured plans to address legal and ethical behaviors within the company.
  • Establishes policy and documentation measures that will protect the good standing and integrity of the company before the risk appears.
  • Maintains documentation of current regulations, ordinances and other legal statutes the company must follow.
  • Proactively counsels employees, including management, to make sure the company and staff comply with all laws and regulations.

Decisions and Consequences

One of the responsibilities of a compliance manager within the compliance department is to recognize breaches of ethics within the company. They are trained to immediately gauge the seriousness of the violation and recommend immediate measures so that the damages to the company are negligible. Small companies may only have a single compliance officer. He/she will make decisions on the fate of employees who breach the established code of ethics.

Most large companies bring ethics violations to the attention of a compliance board. Then, they will consider extenuating circumstances when taking a final decision. Usually, a Chief Compliance Officer makes the final decision. They also take care of overcoming a breach’s consequences. Compliance officers usually do not dictate the final punishment or fire employees who violate policy. Still, they make recommendations. Executives usually follow these recommendations when they make their final decision.

Types of Compliance Managers

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#1. Human Resources

Most compliance managers work outside the scope of human resources, but they do have a direct connection that department. When issues arise, lesser type offenses can be referred to a member of the human resource staff to help prevent the issue from repeating.

Frequently, in large corporations, there is a specially designated member of the compliance staff or team of officers. All of them dedicate their efforts to working directly with human resources. The goal is to inform and educate employees before problems happen.

#2. Financial Compliance

Maintaining fiscal responsibility is imperative for any business. Finance departments will frequently hire compliance managers to implement some financial aspects in order for the company to operate properly.

This may not always be necessary to uncover violations, as it is to encourage credibility. Having a compliance staff to directly oversee financial operations is one way in which large companies run free of corruption or unethical use of company finances.

#3. Quality Control

Manufacturing entities and businesses that produce products for public consumption have quality assurance departments. These companies’ employees do their best in order to never compromise the product’s quality.

Frequently, companies produce products that establish a reputation for superior quality. If that quality is ever compromised, people will question the integrity of the company, as well as its reputation. Food production also must have a compliance staff to meet all federal regulations of the food industry.

#4. Safety Regulations

Maybe one of the most important compliance manager categories is the one that handles the safety aspects of the company. Managers need to educate employees about safety procedures. Compliance officers should focus on providing the necessary pamphlets and documents to every employee. These items clearly describe safety procedures for their job.

Safety inspectors frequently visit large plants and production facilities. They check whether or not employees follow all safety precautions. Fines are usually the punishment for violations. Neglect in following these rules might lead to employee injuries.

Compliance managers are vital to the success of a business. Business owners trust them with keeping the company focused on a profitable path. This approach adheres to both legal and ethical guidelines. When problems do occur, the expertise of a compliance manager plays a crucial role. Companies rely on it to bring closure to the situation.

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