Regulatory compliance refers to adhering to laws, rules, and guidelines set by authorities within a specific industry or jurisdiction. It involves ensuring that organizations operate within the legal framework, meeting standards, and fulfilling obligations relevant to their operations. This includes guidelines regarding financial practices, data protection, safety protocols, environmental concerns, and more. Maintaining regulatory compliance mitigates risks, avoids penalties, and fosters trust with stakeholders, ensuring businesses operate ethically and lawfully.
What is Regulatory Compliance?
Compliance, when it applies to corporations, refers to following the internal policies or government laws and regulations that their organization is subjected to. Failure to follow those requirements can put you at risk of financial fines or legal penalties.
However, compliance is more than just the satisfaction of legal requirements. Meeting requirements should be viewed as a bare minimum for safe operations and mitigation to risk, both internal and external.
Compliance should be viewed as an ongoing effort to meet the needs and expectations of a variety of stakeholders. It touches every corner of an organization, and failure to allocate the appropriate resources to maintain compliance can have dire consequences. At LogicManager, we’ve built our solutions on top of this risk-based approach, ensuring that each risk or compliance situation is addressed in order of its criticality to the business.
Furthermore, compliance should be viewed as an integral facet of enterprise risk management. It’s essential to view compliance management efforts as they directly relate to the associated risks. This further emphasizes the importance of not treating compliance like a checklist; risk management, like compliance management, is an ongoing process that requires ongoing monitoring and evaluation. Below are just a few examples of the differing types of compliance events that an organization would typically face:
- Credit – When a lender agrees to borrow a certain amount of money from a loan lender.
- Cybersecurity – Refers to the protection of electronically stored information.
- Insurance – Provides reimbursement against various types of losses.
- Leasing – A contractual agreement where the lessee pays the lessor for use of an asset.
- Privacy – Refers to the laws that deal with personally identifiable information.
Visit our Solution Center to learn more about the specific applications of LogicManager’s Compliance Management software.
Why is Regulatory Compliance Important?
The importance of regulatory compliance is felt across an entire organization with today’s See-Through-Economy. This term, coined by our CEO Steven Minsky, explains the trend in fast-paced transparency, where consumers and investors are empowered to impact a company’s reputation.
A strong dedication to upholding compliance standards has wide-ranging benefits. It can serve as protection from lawsuits, ensure strong financial fundamentals and transparency, be a beacon for operations when disaster strikes, uphold your reputation with the public, protect your employees and customers from cybersecurity attacks, and can help drive profitability to your bottom line.
How to Ensure Regulatory Compliance
With a better understanding of what regulatory compliance entails and why it is so crucial, an organization can move on to understanding the steps it can take to implement a risk-based compliance program.
- Standardize an assessment framework & templates – A carefully constructed risk library can categorize risks by regulation, which helps prioritize certain areas and streamline required corrective actions. This ensures clarity and objectivity when disclosing information.
- Link regulations and requirements to appropriate controls – Regulations and risk-mitigating activities go hand-in-hand; verify the links between the two so that you can determine the success of each control as it relates to your compliance efforts.
- Structure reporting for flexibility & efficiency – Dynamic reports are integral to compliance, so it’s vital to demonstrate that your company is operating compliantly through configurable, clearly presented reports.
- Manage & expand change over time – The faster you can adjust your policies in response to regulation modification, the better. Assigning ownership to organizational risks allows you to quickly alert the appropriate individuals when a change occurs.
Protect Your Reputation With Regulatory Compliance Management Software
Between sky-high piles of regulatory guidelines and compliance standards for your business higher than ever, it’s easy to get overwhelmed. Ensuring all the necessary requirements are being met across your company can be expensive, time-consuming, and nearly impossible without the right compliance tools to help.
Utilizing our Enterprise Risk Management (ERM) software helps to establish a known web of interconnections, eliminating limitations and confusion of siloed departments. Within our ERM platform, a compliance management functionality assists with the identification, monitoring and neutralization of risks, making board and regulatory reports easier to conduct and maintain.
With LogicManager’s compliance software solutions such as SOX compliance software, GDPR Compliance software, and HIPAA compliance software, all of your compliance activities and workflows will be streamlined with a risk-based approach, saving you time and money while keeping your exemplary reputation intact. Our ERM software also enables you to move beyond compliance and leverage a broad scope of organizational knowledge to focus on strategic goals and operational risks.
Ready to learn more? Schedule a demo with our customer advocacy team to see how LogicManager can help!