Meeting needs is the goal of the current regulatory structure. Sustainable compliance is the future: an active, integrated methodology that coordinates compliance with business sustainability. Although this solution can help solve the problem at hand, it does not do much to deal with the structural vulnerabilities that led to the emergence of the problem.
Meaning of Sustainable Compliance.
Sustainable compliance is a change of mindset from how to fix problems to how not to be fixed. Sustainable compliance is all about merging governance, risk management, and operations. There are transparent policies, policies that are available, and policies that are in alignment with the way work is actually done. The controls are pegged down to be realistic and proportionate to minimize the workarounds.
The Borders of Reactive Obedience.
Reactive compliance is normally in the familiar pattern. This cycle poses some threats. To start with, it is costly to remediate under regulatory pressure, which takes away resources from strategic priorities. Second, recurring results may result in a lack of confidence in regulators, investors, and customers. Lastly, the reactive models put the compliance teams in a firefighting mode, which inhibits their performance in terms of adding strategic value to the organization.
Risk Intelligence, developed out of Rules.
A change in thinking will be one of the indicators of sustainable ELIQUENT compliance, whereby rule-based thinking has to be replaced with risk-based intelligence. Instead of putting equal weight on all the requirements in regulation, organizations give a higher priority to resources in regard to risk exposure, business impact, and regulatory scrutiny.
Culture as a Control of Compliance.
The absence of the right culture eliminates the sustainability of any compliance program. Another unintentional risk is most likely to arise through the employees, who are often the initial point of the line of defense against compliance failures. Sustainable compliance acknowledges the fact that not just training is enough, but employees should not only know what the rules are but also why they are important.
Integrating Compliance into Business.
Early involvement is also another distinguishing factor of sustainable compliance. Brought-in compliance teams, which are supposed to sign off on a project at the end of it, are inherently reactive. The internalized strategy also enhances coordination between the compliance, legal, operations, and technology departments. Silos are eliminated, communication becomes more open and free and compliance is not a gatekeeping role.
Measuring What Matters
In order to maintain the levels of compliance in the long term, the organizations need to be able not only to measure effectiveness but also to measure activity. The number of policies issued or the number of training sessions done will give little information on whether the risks are actually being addressed or not.
Conclusion
With the ongoing increase in regulatory complexity, organizations that support reactive remediation will be more vulnerable. Organizations should consider making compliance part of their culture, processes, and strategy, and then compliance ceases to be a cost of doing business and becomes a source of resiliency and competitive advantage.