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The Importance of Compliance in 2024

The Importance of Compliance in 2024

Compliance is a term that's used industry-wide and relates to risk management and data protection. It's not just fancy jargon thrown around a board room; it's a key aspect to consider whether you’re handling customer information, payment details, or health records, just to name a few. Whether you're a boss, a manager, or someone hiring hourly workers, you've got to know what compliance is and how compliance issues can have legal implications. So, in this guide, we’re going to discuss what compliance means, the importance of information security, the growing risk cybersecurity has on businesses, and the best way to handle sensitive information.

What Is Compliance?

The definition of compliance is like following the rules of a game but in the corporate world. It means doing things the right way, especially when it comes to legal regulations and data protection policies. Put simply, compliance means playing by the book and protecting both a business and its customers.

Types of Compliance

Whether you’re talking about GDPR or cybersecurity, compliance can cover a number of different areas of a business. Generally, a chief compliance officer will be responsible for ensuring a company is fully compliant so most members of staff, especially entry-level staff, won’t need to worry too much about changes in regulations and laws. But, depending on the industry you work in, you might need to be fully aware of your role to prevent any compliance issues from cropping up. So, let’s take a quick look at the different forms it can come in.

1. Regulatory Compliance:

Regulatory compliance is corporate governance. It's typical in American workplaces, where there are many laws to ensure everything's fair and safe. It tends to involve the relationship between board members, management, and the rest of the company. Usually, a well-established company would have a dedicated compliance department to handle all compliance requirements and compliance issues should they arise.

2. Workplace Compliance:

Workplace compliance focuses on equality among your team and ensures that everyone behaves in a professional and appropriate way. This type of compliance helps to create a positive workplace environment for all.

3. Environmental Compliance:

Environmental compliance is about taking care of the planet. It's like being a good citizen and following the rules to protect nature. Think of a company that produces a harmful bi-product. They must follow strict rules on when, where, and how they remove waste.

Why Is Compliance Important?

While compliance helps prevent legal action, it also helps protect people and the environment. Here's why it's important:

Legal Protection:

Compliance keeps you out of hot water. It's like having a police officer around to make sure you don't break any corporate rules. If you don't follow compliance requirements, you could get in trouble with the law. For instance, discriminating against employees or forcing people to work in poor working conditions would be unethical and downright wrong. But sadly, some companies would attempt to do this, if left to their own devices. Compliance prevents this from happening.

Reputation Management:

Compliance makes you look good. It's like being known as the friend who always plays fair. When you follow compliance programs, people trust you more, and that's good for business. Think of a fast food company such as McDonalds. They have a reputation to uphold so they must ensure their business runs smoothly and doesn’t end up facing legal action should a franchise fail to operate legally.

Employee Well-being:

From work-related stress to sexual harassment, employee wellbeing compliance focuses on mental well-being and making sure employees are treated fairly at all times. For instance, Sandra applied for a job in a marketing firm in New York. She explains that she is single but has a child at home. The recruiter must not discriminate against her as a single parent but instead offer her the same opportunity as any other candidate as long as she understands the role and the requirements and, of course, meets the criteria for the job. If hired, she should not be treated any differently than any other employee.

Risk Mitigation:

As a business, minimizing risk is a must. And compliance helps you avoid unnecessary problems. It's like wearing a helmet when you ride a bike; it protects you from getting hurt. When you follow compliance efforts, you actively reduce the chances of something bad happening, such as a data security breach. For example, Becky is a sales representative for a pharmaceutical company. Becky handles client contact information and visits her clients often. Becky must not save client information and have client conversations with a personal mobile device. She must only use a company phone and a company computer. The risk of using personal devices is that sensitive client information could be leaked which could include health records and patient information.

Competitive Advantage:

Compliance can also help set you apart from others. It's like being the best player on the team. When you're known for following the rules and doing things right, people will want to work with you. This is because you won’t be considered a risk and will work legally at all times.

Compliance FAQs:

What is the means of compliance?

The "means of compliance" are the methods or ways of following the rules. It's how you make sure you're doing things right as a company and avoiding any compliance issues.

What is compliance in the workplace?

In the workplace, compliance is all about following the rules your company sets. It means that your employees fully understand and appreciate that compliance efforts are mandatory, and non-compliance will lead to disciplinary action.

What is an example of compliance?

GDPR is a clear example of compliance regulation. It affects internet users based in the EU and grants them specific rights and control over when and how personal data is processed. For example, before GDPR, companies could collect personal data and share it with third parties without asking for permission from a user. Now, users have a say in how their information is collected, what is collected, and who it’s shared with or how it’s used. Assessments are carried out across the EU at random to ensure companies are GDPR compliant.

What is a compliance synonym?

A synonym for compliance could be adherence or you could say a company that is regulated.

Final Thoughts On Compliance

Compliance is not something you do once and forget about. You can’t just tick a box and you’re done. It’s a big part of running a legal and fair company. It requires you to pay attention, be flexible, and always do the right thing. But to keep on top of changing regulations and laws, you can hire a chief compliance officer to handle the hard work for you and save yourself precious time as a business owner.

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