How to be good at compliance
February 26, 2016
Depending on which side of the fence you sit, business compliance, as a point of discussion, may not be the sexiest of subjects in the world. The simple fact is, however, that business compliance, understanding what it is, and implementing it correctly, is incredibly important. So how do you make sure you do what's required without being strangled by red tape? Luisa Grey, a Director at Eazipay Ltd, the UK’s largest and fastest growing Direct Debit bureau, comes at the problem with some sharp scissors (but doesn't run with them, because that wouldn't comply with her company's health and safety rules).
What is Compliance?
According to the International Compliance Association - yes, it really exists - compliance in a business setting is twofold. Firstly it involves complying with a set of rules that are set for it externally by industry governing bodies, and secondly, complying with sets of rules that are set by the company itself to ensure it complies with the external rules.
That's not quite as complex as it sounds. It pretty much means ‘have systems in place so you don't do mess up.' For Eazipay that means we need to make sure we comply with the edicts laid down by the Financial Conduct Authority (FCA) and follow the rules of Bacs, amongst others.
How do you know what you need to do?
Naturally, the bodies which set rules vary from industry to industry. The FCA might be experts on ensuring no one breaks the rules in the financial sector, but put them in charge of fishing and they'd be all at sea. (If it's a fishing regulator you're after I'd try the Fish Health Inspectorate, amongst others!)
Anyway, the point is that you need to know which body makes the rules so you can start the business of complying with them.
As well as industry specific regulators, some compliance bodies are native to almost every business environment. The Health and Safety Executive, for example, will take an interest in accidents at work. Whether someone has been trapped in a mine shaft for several days before Skippy raises the alarm, or your boss has dropped his/her wallet on his/her foot and broken three toes, general health and safety in any work environment is very much their concern.
And remember that compliance is about more than rules set by others. Does your company operate in a risky line of business or dangerous part of the world and if so how are those risks controlled? What are the rules concerning new clients or large orders? It's a minefield. This, by the way, would require a whole other level of compliance!
How do you go about complying?
By this point, you should know which regulators control your business, the rules they expect you to meet and what you'll need to do to meet them. And any internal rules that you need to follow to ensure the health of the company.
But how do you comply?
Like so many aspects of business life, a company's attitude to business compliance comes from the top. If a distribution company boss does wheelies on a forklift, then his or her employees are going to adopt a similarly slovenly approach. The best written policy in the world is no good if everyone treats it like a Christmas list to Santa.
All directors and management must be fully aware of the policy and follow it to the letter. Depending on the size of the firm this could mean having a Compliance Director on the Board who can report to the other directors, or perhaps a Compliance Officer who is at a sufficiently senior level to have real clout.
Again, if the company is large enough you might need more than one officer to monitor that all staff are adhering to the rules. Perhaps an employee in every department with special responsibility for compliance?
Monitoring on its own may not be enough. Compliance audits may be needed.
Drawing up policies is key. While the rules may be clear and obvious, how to comply with them might differ from business to business. Each individual firm needs to have its own set of risk assessments and statements that not only fit the rules but are also practical to enforce. They need to be detailed too. A health and safety policy for a scaffolding company that reads 'don't fall off' probably needs a bit of work.
Training is also important. If your staff don't know what the rules are and how the company expects them to comply, the chances are that, much like an overweight human cannon ball, they'll fall short of the target.
Despite all the above, sometimes things will go wrong and outside help might be needed. There’s nothing wrong with that, far from it. In fact, the key to compliance is sometimes as simple as employing the right firm, or the right person, for the job. No matter how good we are we cannot all be experts in all fields!
Right, with all that in mind, who’s for setting up a parachute free sky diving business?
Luisa Grey is a director of Eazipay Ltd, the UK’s largest and fastest growing Direct Debit processing company. Eazipay provides regular Direct Debit collection and processing services to thousands of SMEs and corporate organisations in a wide range of market sectors throughout the UK, Europe and beyond. For more information visit www.eazipay.co.uk
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