Compliance in a corporate environment is something that shouldn’t be ignored or hashed out without thought. Corporate compliance ensures that your company can compete with similar businesses and ensures you are on the same page. An effective corporate compliance program requires taking several steps that get you in line with the expectations in the industry.
The following steps in this list will showcase how you can create an effective corporate compliance program for your business. They will outline the core concepts behind this process and explain why they matter. With this help, you can craft an effective corporate compliance program for any company.
The Six Best Steps to Consider for Creating an Effective Corporate Compliance Program
1. Understand Your Standards and Procedures
The first step in creating an effective corporate compliance program is implementing standards and procedures that suit your business. These standards are designed to create an effective, efficient, safe, and reliable company. For example, an effective corporate compliance program will focus on actions that are against the better interests of your company and punish their occurrence.
For example, you may have standards for sexual harassment. These include investigating all claims and firing people who have committed this crime. Creating an inclusive, cohesive, and simple set of guidelines for corporate compliance helps to lay the groundwork for the implementation of a comprehensive program.
2. Step up Your Leadership Demands
While an effective corporate compliance program starts with guidelines and procedures, these mean nothing if your leadership is not willing to commit to them. Everyone involved in controlling your business, including any board of directors, must approve of these compliance procedures. Then, they must make sure that they create a corporate climate that rewards those who stick to compliance standards.
For many leaders, this can be a hard step. It will require that they follow strict compliance guidelines and seek to stick to them. Even more difficult, they must be willing to pursue anyone who breaks compliance standards. Trying to cover up or explain away an offense will only compromise an effective corporate compliance program.
3. Avoid Any Kind of Illegal Acts
The toughest part of creating an effective corporate compliance program is finding a way to deter people from committing illegal or unethical acts. No matter how strict of a compliance program you create, some individuals may try to sneak around it or use certain loopholes to their advantage. It is important to hinder these actions if you want your corporate compliance program to be effective.
These actions should include firing individuals who abuse their power or the company’s trust to their own gain. Business owners should also find a way to punish them for their efforts in a criminal or civil court. Putting the hammer down on these steps is important. It can stop illegal or unethical acts from higher-authority people from influencing lower-level employees.
4. Implement a Training Program
Taking a proactive approach to creating an effective corporate compliance program is necessary if it is to succeed. For instance, you need to take the time to open up the paths of communication and to train all of your employees in your program. This step includes talking about difficult and daring topics, such as unfair trade practices, sexual harassment, and conflicts of interest.
Then, you need to train your employees on how to avoid these situations and when to report them if they occur. This latter part can be tough because your employees may not want to “betray” someone they consider their friend. However, an effective corporate compliance program should reward those who do report situations and punish those who cover them up. This way, your plan will eliminate criminal or unethical individuals from your organization.
5. Monitor Your Program
After you trained everyone and created what you think will be an effective corporate compliance program, it is essential to monitor the progress of its implementation. This process includes gauging how people are reacting to its demands and how well it is stopping criminal behavior. It is also important to find out if any retaliatory behavior has occurred because of compliance reporting.
It isn’t necessary to monitor the progress of your program each passing day. However, you should ask for reports on its monthly progress and audit where it is succeeding and failing. For example, you may find that people are reporting compliance offenses regularly but that nothing is being done to punish the offenders. As a result, you can adjust your program and make it more useful.
6. Create an Effective Disciplinary Program
The last step in this process is creating a disciplinary and reward program. This should weed out offenders and provide benefits to those who do not commit compliance violations. For example, a good disciplinary program should have a list of possible offenses and punishments for each. In the case of a minor ethical concern, you may be able to train the employee to avoid the problem and continue to have them as staff members.
Severe corrective actions are also part of an active corporate compliance program. For example, you may have to dock an employee’s pay for violations or even fire them if they consistently make similar mistakes. While these steps are never easy to take, they are crucial. Don’t forget to create an incentive program for those who report violations. These rewards can include raises and even extra days off.
As you can see, creating an effective corporate compliance program is not an impossible challenge. While it will take some skill and a little careful tweaking, just about anybody in the business world should be able to manage these concepts. So, don’t hesitate to get started on implementing these effective strategies in your business.
Or if you have similar strategies to share that you think can create an effective corporate compliance program, please comment on this article below. We always love hearing from our readers and have found that every one of you has innovative ideas that can be of great help to others.