We are seeing an increase in new regulations that affect how we conduct business. Many of these regulations are critical because they are designed to mitigate the effects of the climate crisis, expose inconsistencies in supply chains and improve working conditions in developing markets, just to name a few.
But there are also existing rules and laws to consider, including country-specific laws and internal company policies. To manage and limit business, health and safety, and environmental risks, organizations need to consider all applicable rules and develop an appropriate compliance management program.
Regulators, in turn, are scrutinizing whether and how companies are complying with these rules and regulations. This means significant additional work and costs for companies, as well as increased risk if they fail to manage compliance.
What Is Compliance Management?
Compliance management calls for businesses to monitor and assess compliance requirements on a continuous basis, so they are able to adhere to industry and security standards, regulations and corporate policies. There are a number of compliance management tools and processes that can be implemented by an organization to achieve compliance across the enterprise.
Compliance Challenges and Emerging Risks
Increasing mandatory disclosures and the consideration of environmental, social and governance (ESG) factors, in addition to heightened standards for health, safety and welfare, are having a major impact on the responsibilities and day-to-day work of compliance teams. It’s no surprise, then, that the volume of regulatory changes and the task of staying on top of them are among the top five compliance challenges in 20231, according to individuals and boards surveyed by Thomson Reuters.
The Greatest Compliance Challenges in 2023
Volume and implementation of regulatory change
Keeping up with regulatory change
Balancing budgets and resources
Retaining skilled resources
Increased regulatory scrutiny
Source: Thomas Reuters 20231
As the number and complexity of regulations and compliance obligations increases, companies are also reporting a lack of skilled resources. It is critical for organizations to ensure that all compliance-related tasks are identified, monitored and completed accurately and on time. Sixty-two percent of respondents in a recent report said they spend one to seven hours per week tracking and analyzing regulatory changes.
Failure to successfully manage your compliance obligations can easily lead to legal and financial risk. This can result in additional costs, and customers and business partners may lose confidence in companies that are not compliant.
How can we address these challenges and ensure that organizations have effective compliance programs in place?
How to Solve Compliance Challenges
The business landscape has become more complex and will continue to change. Unforeseen events such as the pandemic and the increasing number of heat waves, fires and floods due to climate change have a significant impact on risk management and mitigation in the context of ESG reporting. Organizations must continually address their business risks by identifying and managing all potential risks. Compliance officers are under increasing pressure to establish an enterprise-wide compliance solution that provides a transparent audit trail for internal and external compliance reporting.
Depending on an organization’s size and financial risk, it may be prudent to digitize the management of all compliance efforts and leverage proven enterprise compliance software. With compliance software, organizations can centralize all compliance-related tasks in one software solution. They can identify compliance obligations, automate and streamline processes, gain full visibility with a compliance registry and report on enterprise-wide compliance. This saves time and money and protects their business.
Compliance Management Software
Compliance management software provides a single source for all compliance data and an easy way to share compliance status with all related stakeholders. It strengthens compliance efforts by improving transparency, performance and efficiency. There are different types of compliance management software—generic compliance management tools, industry-specific compliance management software and governance and compliance software.
Companies often need to manage multiple compliance obligations. It’s not only about complying with standards issued by bodies such as the Occupational Safety and Health Administration (OSHA), the International Organization for Standardization (ISO) and the Environmental Protection Agency (EPA) and avoiding fines. It’s also about adding internal rules and policies to make the business more efficient, credible and sustainable. And it’s about building a competitive advantage and outperforming the competition.
However, there are some must-have capabilities that a compliance management software should provide, and we’ll take a look at those next.
Must-Have Capabilities of Compliance Software
- Risk and Compliance Management: Track regulatory and industry updates or any others related to compliance requirements; identify compliance obligations; and streamline all related activities for complete transparency and risk status awareness at any level in the organization.
- Compliance Content: Ensure access to regulatory document libraries with the latest information on regulatory changes.
- Compliance Register: Identify and manage the matrix of compliance obligations (including permits, rules and any requirements) that change across multiple jurisdictions, including federal, state, local and site requirements.
- Action Management: Streamline workflows and actions to deliver the right information in the right format across business units to ensure up-to-date compliance knowledge and implementation of best practices.
- Data Analytics: Provide insights into compliance-related data and status through interactive dashboards based on real-time data analysis across the enterprise.
- Audit-Proof Transparency: Create transparent, auditable records, including updates and revisions, to prove the company meets all applicable requirements.
Benefits of Compliance Software
Ensure regulatory awareness (notification of regulatory changes)
Bring consistency to global regulatory compliance management
Apply uniform procedures company-wide to ensure compliance
Use automated notifications to manage actions
Easily locate compliance evidence for auditing or inquiries
Save company costs (workforce, fines, etc.)
Improve resource allocation
Integrate compliance activities with other systems
Reduce business risk through compliance
Build employee, customer and stakeholder trust
Accomplish compliance assurance
It is expected that the number of regulations will increase rather than decrease in the future. Companies have to prepare for this with strong leadership, clear accountability, governance and a fundamental understanding that compliance is part of the corporate culture.
Compliance software can help manage compliance across the enterprise by providing all data in one place, tracking task ownership, completion and documentation. This helps to reduce the compliance burden on teams, maintain compliance across the enterprise and save time and money.
If you are looking for a compliance solution to tackle your compliance challenges, find more information here on SpheraCloud Operational Compliance software.