Think of compliance as a rulebook that helps businesses comply with industry standards and regulations. Compliance managers are the referees who keep everyone in check and ensure that companies follow the rules.
A company can’t simply ignore the rules and regulations set by its industry. Not only is it unethical, but it could also lead to legal consequences. That’s where compliance managers come in – they oversee and enforce an organization’s compliance.
But, how exactly do compliance managers ensure that a company complies with industry standards? Let’s explore what their role entails.
Which Industry Standards Should be Complied With?
Industry standards refer to guidelines, rules, and regulations established by regulatory bodies or industry associations. These standards are put in place to ensure that businesses operate ethically, safely, and responsibly.
Industries often have different standards and regulations they need to adhere to, depending on their specific field. For example, the healthcare industry has HIPAA (Health Insurance Portability and Accountability Act) regulations, while the financial sector must comply with SOX (Sarbanes-Oxley Act).
When it comes to data privacy and security, there are many regulations in place that companies must follow. In addition to HIPAA and SOX, the Gramm-Leach-bliley Act (GLBA) applies to financial institutions and requires them to protect consumers’ personal information.
Other examples include the General Data Protection Regulation, a European Union law protecting the personal data of EU citizens, and the California Consumer Privacy Act, which aims to enhance privacy rights for California residents.
These regulations often have strict requirements for how data is collected, stored, and shared and penalties for non-compliance. In addition to these laws and regulations, companies may also need to comply with industry-specific standards and guidelines related to data security. These can include payment card industry (PCI) security standards or healthcare information technology (HIT) security guidelines.
What are The Typical Responsibilities of Compliance Managers?
Identifying applicable industry standards and regulations
The industry you operate in and the type of data your company collects, stores, and shares determine the specific laws, regulations, and standards you need to comply with. Compliance managers are responsible for identifying these requirements early on to incorporate them into your company’s policies and procedures.
For example, if your company stores financial data, you may need to comply with the Payment Card Industry Data Security Standard (PCI DSS). If your company operates in the healthcare industry, you may need to comply with the Health Insurance Portability and Accountability Act (HIPAA).
The data security requirements for compliance can vary based on your industry and the type of data you handle. A compliance manager should be able to identify the specific regulations that apply to your company.
Developing compliance policies and procedures
To achieve compliance with the relevant regulations and standards, your company must develop policies and procedures that address data security. These should cover everything from how data is collected, stored, and transmitted to how access is managed and monitored.
The compliance manager should work closely with the IT department and legal team to develop these policies and procedures. He is responsible for overseeing their implementation and ensuring that all employees are aware of their responsibilities regarding data security.
Some key areas that your company should cover in compliance policies and procedures include.
- Access control
- Data encryption
- Data retention
- Incident response
- Third-party vendor management
- Employee training and awareness
- Vulnerability management
Designing a compliance plan and control systems
Designing and implementing a compliance plan is an essential step in ensuring your company’s adherence to regulations and industry standards. A compliance plan outlines the policies, procedures, and controls that your organization will use to ensure data security and privacy.
Compliance managers are responsible for creating, implementing, and maintaining compliance programs that align with regulatory requirements. They also ensure employees are trained on these policies and procedures.
Compliance managers work closely with legal teams to interpret and apply regulations, develop policies, and maintain compliance documentation.
Monitoring and reporting on compliance
Once compliance policies and procedures are in place, compliance managers need to monitor and report on their effectiveness. A compliance monitoring program involves regularly reviewing and evaluating the organization’s operations to identify any potential non-compliance issues. This can include conducting risk assessments, internal audits, and employee surveys.
In addition to monitoring, compliance managers also need to report on the organization’s compliance status. Now, automating this process has become easier with the use of compliance management software. Digital tools allow for real-time reporting, tracking of compliance tasks and deadlines, and centralization of documents and data.
Managing audits and inspections
Audits and inspections are critical components of compliance management. They help organizations identify gaps or deficiencies in their compliance processes, allowing them to make necessary improvements. Compliance managers are responsible for overseeing these audits and inspections.
Compliance management software helps managers easily schedule and track audits, assign tasks to team members, and generate reports for management and regulatory agencies.
How Can Compliance Managers Ensure Adherence to Industry Standards?
Adhering to industry standards is necessary for any organization to function effectively. Most of the time, non-compliance with industry standards leads to penalties and fines for the organization. Compliance managers are key players in ensuring an organization adheres to industry standards.
Promoting a culture of compliance within the organization
Compliance managers can work towards a culture where adherence to industry standards is valued and ingrained in the organization’s processes. When a culture of compliance is promoted, employees are more likely to follow regulations and guidelines without hesitation.
One way to promote a culture of compliance is to provide regular training and education sessions for employees. Employees who consistently adhere to compliance regulations can also be recognized with rewards and recognition.
Moreover, compliance managers can also create a system where employees can easily report any violations or concerns without fear of retaliation. This instills trust and encourages transparency within the organization.
Developing training programs for employees
People working in a business or organization may not always have the necessary knowledge or training on compliance regulations. The compliance team is responsible for educating and training employees on these regulations. Developing training programs ensures that all employees know their responsibilities, the consequences of non-compliance, and how to report any concerns.
Training can be conducted through workshops, webinars, or online courses. These programs should give employees a clear understanding of compliance regulations, their importance, and how they impact the organization. Compliance managers can also use real-life examples and case studies to make the training more relatable and engaging.
Communicating compliance expectations and requirements
A big part of maintaining a culture of compliance is being clear and consistent in communicating expectations and requirements. What rules and regulations do employees need to follow? How do they align with company values and goals? Compliance managers should address these questions in their communications.
Regularly remind employees of the laws, policies, and procedures they need to comply with in their day-to-day work. This can be done through email updates, newsletters, or even posters around the office. Emphasize the consequences of non-compliance and how it could negatively impact individuals and the organization.
To ensure everyone is on the same page, consider conducting regular meetings or town halls where compliance expectations can be discussed openly.
Regularly updating policies and procedures
Due to technological advancements, compliance policies and procedures constantly change. It is essential to regularly review and update these documents to reflect any changes in laws or regulations.
Regularly reviewing policies and procedures can also identify potential areas for improvement or gaps in compliance efforts. A good practice is to have a designated compliance officer responsible for this task.
Another essential aspect of regular updates is ensuring all employees are aware of any changes made. This can be achieved through training sessions or distributing updated documents to all relevant parties.
Moreover, regularly updating policies and procedures can demonstrate a commitment to compliance from the organization’s leadership. When leadership actively supports compliance efforts, it sets a positive tone for the entire organization.
Establishing a system for documenting compliance efforts
In addition to regular updates, organizations should also develop a system for documenting compliance efforts. This includes keeping records of all policies and procedures and any training sessions or employee acknowledgments related to compliance.
A robust documentation system can help organizations stay organized and provide evidence of their compliance efforts in case of any audits or investigations. It also allows for transparency and accountability within the organization.
Furthermore, documentation can serve as a valuable resource in the event of employee turnover or changes in compliance personnel. It ensures that new hires or personnel taking on compliance responsibilities can access all the necessary information and procedures.
Conducting periodic risk assessments
Another essential aspect of compliance is conducting regular risk assessments. This involves identifying potential risks and vulnerabilities within the organization and implementing measures to mitigate or eliminate them.
Risk assessments can help organizations identify areas that may require additional attention or resources regarding compliance efforts. They also allow for a proactive approach to compliance rather than just reacting to non-compliance issues when they arise.
Organizations can conduct risk assessments through self-assessments or third-party audits. Self-assessments involve internally reviewing processes, policies, and controls to identify potential risks. Third-party audits include hiring external experts to assess the organization’s compliance efforts thoroughly.
Once risk assessments are completed, organizations can prioritize compliance based on the identified risks.
Building strong relationships with regulators and auditors
Regulators are government agencies responsible for enforcing laws and regulations within a specific industry or area. On the other hand, auditors are independent professionals who review an organization’s financial records to ensure accuracy and compliance with regulatory requirements.
Organizations must maintain compliance by having strong relationships with regulators and auditors. This includes open communication, transparency, and cooperation during audits or inspections.
Compliance managers should regularly engage with regulators and auditors to understand any changes in regulations or expectations. They should also proactively share their compliance efforts, risk assessments, and mitigation plans to demonstrate their commitment to compliance.
Conclusion
In conclusion, compliance managers are critical in ensuring organizations adhere to industry standards and regulations. They are responsible for developing and implementing compliance programs, conducting risk assessments, and continuously monitoring and improving processes.
By fostering a culture of compliance within the organization, staying updated on regulatory changes, and collaborating with regulators and other compliance professionals, they can effectively mitigate risks and maintain compliance.