An effective compliance program relies heavily on co-operation and support from an organization’s legal department.
While legal professionals advise on the law and best legal practice, it is the role and responsibility of compliance professionals to develop the procedures, policies and systems to ensure that the company operates within clearly defined parameters.
Meanwhile, in-house counsel plays a fundamental role in delivering training, undertaking due diligence, providing legal guidance and analysis, and, on occasion, conducting internal investigations.
By working in close partnership with compliance, a legal department can ensure that the organization is operating effectively and ethically.
How can in-house counsel, company secretaries, legal operations and compliance teams work together to measure compliance and keep the company and its entities legally able to operate in every jurisdiction? The following seven steps provide a solid framework for success.
The first step, applicable to all businesses, is to do your research: Know the regulations in your industry and jurisdiction, understand the requirements of your entity concerning each regulation and make plans for how you can fulfill those requirements. Make sure you consider all aspects, including, among others:
Be sure to check out our twice-yearly global regulatory roundup where we offer expert insights to help you and your peers stay on top of regulatory trends impacting your organization.
Reporting requirements will differ depending on the sector, industry and jurisdiction in which your organization operates. The plethora of acronyms — FATCA, CRS, SOX, BEPS — all come with reporting duties, but other bodies require regular filings, too.
Consider the terms of any funding, or of any ethical bodies or industry organizations that your company is a member of, and check whether a quarterly or annual report is needed. It’s advisable to keep a calendar of reporting deadlines to make sure none are missed.
All legal compliance policies you put in place must be closely adhered to and remain up to date. While evaluating legal compliance, check that your policies are still fit for purpose. Are all changes in your business or industry reflected in your policy updates? Are your people aware of and working within the policies? These are important questions to ask frequently; an annual review is essential to successfully evaluating legal compliance, supported by regular spot checks.
A business’s state of compliance can be evaluated at two levels:
Robust legal compliance requires easy and quick access to up-to-date, real-time data; measuring using old or incorrect data can actually cause compliance to slip, which can have a long-lasting financial and reputational impact on an entity or larger group of entities.
The best compliance software can aid in various legal compliance tasks to help create credible and defensible compliance programs.
Compliance solutions can:
Checking the box on compliance isn’t enough. Stay ahead of risks with our Best Practices for Building a Culture of Compliance guide. Learn four key focus areas to streamline processes and protect your organization. Get your free copy here.
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