Business Compliance and Why It’s Hard to Implement

Compliance in the business world is when a company and its employees adhere to all relevant laws, regulations, standards, and ethical practices.

While maintaining compliance is crucial for the success and longevity of any organisation, it can be complex and challenging to achieve, with lots of hoops to jump through along the way.

Why are Compliance Regulations So Complicated?

One of the primary reasons why business compliance is difficult to implement is the sheer volume and complexity of regulations that companies must navigate. Depending on the industry, location, and nature of the business, organisations may be subject to different laws, as well as international standards and industry-specific guidelines. Keeping track of all these regulations, understanding their nuances, and ensuring continuous compliance can be an overwhelming task.

The Moving Target of Compliance

Another challenge lies in the fact that compliance requirements are constantly evolving. As laws and regulations change, businesses must continuously adapt their policies, procedures, and practices to remain compliant. This can be a daunting undertaking, as staying up-to-date with the latest developments and implementing necessary changes fast enough requires significant time, resources, and expertise. Your company may not have the time and resources available. 

It doesn’t help that compliance standards can be interpreted in more than one way. As Sam Li, founder and CEO of Thoropass, a leading compliance automation software solution, says:

“Such discrepancies lead to confusion for compliance managers and entrepreneurs attempting to navigate the audit process efficiently. Too many “it depends” with no clear rationales besides “this is how it was done before here.”

The Human Factor

Compliance is not solely a matter of policies and procedures; it also relies heavily on the actions and behaviours of a company’s employees. 

Ensuring that every employee understands and adheres to compliance requirements can be a significant challenge, as it requires effective communication, comprehensive training, and a strong culture of compliance within the organisation. Employees may lack the necessary knowledge or simply make mistakes, all of which can lead to compliance breaches. And some employees may not care at all about compliance because this is not how they are used to doing things.

The Costs

Implementing and maintaining a robust compliance program can cost businesses a lot of money. Compliance-related expenses can include the cost of hiring and training dedicated compliance officers, investing in compliance software and technology, and potentially paying for external audits and legal fees. These costs can be challenging to absorb for small and medium-sized enterprises, which don’t have the resources to dedicate to compliance efforts.

The Risk of Non-Compliance

The consequences of non-compliance can be severe, including financial penalties, legal action, and reputational damage. Businesses that fail to meet compliance standards may face government fines, lawsuits, and even criminal charges, which can have a devastating impact on their operations and long-term viability. 

Keeping your business compliant is important. By addressing the challenges you are sure to face head-on, you can position your business for long-term success and mitigate the potential consequences of non-compliance.

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