An introduction to compliance management systems
Compliance is taken seriously by organisations. Both internal company codes of conduct and external regulations are to be considered when it comes to compliance. Avoiding incidents is paramount for companies to keep their reputation. This is why compliance management systems are required. In this section, we investigate what a compliance management system is, provide insight into its importance and list its different components, thus introducing you to a holistic understanding of the compliance management system.
What we mean by compliance management system
The compliance management system, also commonly referred to as CMS, is the set of procedures and processes that a company implements to be compliant with internal policies and external regulations. These processes and procedures cover compliance end to end. This means that identifying risks of non-compliance together with the necessary steps to avoid those risks are all part of the CMS. Building a compliance management system for an organisation requires a full understanding of the environment, the applicable regulations and laws and the risk assessment. A CMS also includes controls to monitor risks and compliance. It requires regular assessment to stay relevant to the evolving work environment and external regulations.
The importance of compliance management systems
With a successful CMS, the company is able to deploy, track and enforce codes of conduct and overall compliance. Non-compliance is a risk that is not to be taken lightly. It may lead to consequences such as penalties, recall of goods and more importantly it may damage the organisation’s reputation. Below are some reasons why having a strong CMS is required.
Avoids costly penalties
Being non-compliant can have financial repercussions. Penalties for non-compliance can take a heavy toll on businesses, thus making investments to implement compliance processes worthwhile.
Increases visibility on existing processes
Implementing a compliance management system means assessing the state of play of your processes holistically. It brings transparency end to end and may help you spot areas of necessary improvements or opportunities for streamlining.
Ensures up-to-date risk management
Painless risk management means that the organisation is up to date with regulatory laws on compliance. It also means that the CMS in place is agile and adapts to the evolving environment by adapting existing procedures and guidelines regularly.
Guarantees best-in-class automation
Automating processes saves time but also avoids human errors that can have a deep impact on compliance practices. With automation, human dependencies are reduced. This means that the compliance management system not only streamlines the processes but also reduces risks of non-compliance.
Read more: What are automated workflows and how can they be used in HR?
Boosts competitiveness
Believe it or not, having a strong CMS brings a competitive edge to your business. It is an element that can be incorporated into sales pitches as it demonstrates the company’s dedication to data privacy and existing regulations. Proving compliance plays a big role in asserting credibility.
Consolidates information
The CMS will help the organisation gain visibility. It consolidates information, brings it into one place and structures it. As such, if the organisation experiences a compliance issue or identifies a risk, the CMS makes it easier to pinpoint where the problem comes from and tackle it efficiently.
For an organisation, having a strong compliance management system means being more resilient, honing its responsibilities and asserting its company culture. Compliance is also important to ensure business continuity.
The components of compliance management systems
Below you will find some components which are the foundation for a compliance management system.
Security workflows
Security workflows are the base of your compliance management system. They ensure that there are processes and guidance every step of the way. Security workflows facilitate the implementation of training sessions, help identify security gaps and guide employees in following strict procedures. They also play an important role in developing internal policies.
Key policies and processes
The compliance management system brings the existing compliance policies and protocols into one place. It ensures that the documents are thorough and that they are reviewed regularly, thus maintaining their relevance. Another important aspect of the CMS is that it ensures that policies and protocols are easy to understand for all employees.
Control systems
Compliance requires the collaboration of every employee and vendor. The CMS will ensure that controls are in place to monitor the behaviour of both people and technology. It goes deep into the analysis of gaps and ensures that all gaps are addressed.
Ongoing monitoring
Compliance management systems are not a one-off action. A CMS requires ongoing reviews of existing systems. This monitoring activity is important for the CMS to remain relevant.
Mandatory training for employees
A strong CMS allows for general and targeted employee training. The CMS aims to increase the awareness of policies, codes of conduct and overall compliance for all employees. Latest changes are communicated effectively and appropriate training is provided.
Internal audits
Regular internal audits help identify potential issues with systems. They assess the existing granularity and often pinpoint deficiencies. Internal audits also help the organisation prepare for external audits.
Certification process
Gaining compliance certification asserts the dedication that the company puts towards compliance. It requires the collection and presentation of evidence to external auditors. Processes, policies and workflow documentation must be at the required level for the certification to be granted.
Best practices for implementing a compliance management system
Implementing a compliance management system requires the deployment of specific steps. Following these steps can ensure you deploy a satisfactory CMS. Below are the best practices that you may want to follow.
Start by understanding the business’s needs
Understanding your current needs is an indispensable step towards implementing a CMS. Ask yourself what compliance means for your industry and what are the risks. Also, identify any law and regulatory framework that you should comply with.
Personalise the system
Understanding your needs and gaining visibility means that you can tailor the compliance management system to your organisation. Check the possible configurations of the system, define roles and responsibilities within the organisation and map out the optimised workflow.
Deploy thorough and ongoing compliance training
Compliance is the responsibility of all employees and vendors associated with the business. As such, conducting thorough training is important. Make sure that employees can easily find the compliance information, the code of conduct and much more. Give them easy-to-understand information and somewhere where they can ask questions. While doing so, make sure that you optimise the training so that it doesn’t take too much time away from employees’ daily tasks.
Read more: Compliance training for employees: objectives and strategies
Test with a pilot phase before rolling out
Before rolling out the solution, test it sufficiently. Testing can allow to identify bugs in the system. It may also highlight gaps. If your solution has bugs, it is likely that this will create frustration with employees. On the contrary, if the workflow is smooth and hurdle-free, the adoption of the solution can tend to be more effective.
This article provides you with an introduction to the basics of compliance management systems and gives you a road map to follow when implementing the CMS. Throughout the process, remember that every organisation has its specificities and that each CMS requires tailoring. For more on compliance and data regulations, take a look at our content on data protection and HR GDPR for employers.
