Legal Eagle: Corporate Compliance

Straight-forward legal tips for Military and Veteran Business Owners

By Kelly Bagla, Esq.

CORPORATE COMPLIANCE

Corporate compliance should be an essential part of your business operations, regardless of industry. How does your business manage compliance and mitigate risk? Taking preventative measures can feel like a hassle upfront, but it can save your organization an absorbent amount of costs in the long run.

WHAT IS COMPLIANCE IN BUSINESS?

In the corporate world, corporate compliance is the process of making sure your company and employees follow all laws, regulations, standards, and ethical practices that apply to your organization and industry. Corporate governance covers both internal policies and procedures, as well as federal and state laws. Enforcing compliance helps your company prevent and detect violations of rules, which protects your organization from fines and lawsuits. The compliance process should be ongoing.

WHAT IS THE PURPOSE OF A CORPORATE COMPLIANCE PROGRAM?

The purpose is to protect your business. It’s as simple as that. But the return on investment could be significant, helping you avoid waste. Fraud, abuse, discrimination, and other practices that disrupt operations and put your company at risk. An effective program improves communication between leadership and staff. It should include a process for creating, updating, distributing, and tracking compliance policies. After all, employees can’t be held responsible for rules and regulations they don’t know exists.

HOW TO CREATE A SUCCESSFUL CORPORATE COMPLIANCE PROGRAM

Here are a few steps to establish your corporate compliance program:

1) Compliance Starts With Leadership

Leaders should encourage ethical behavior and openly talk about the importance of compliance.

2) Conduct Risk Assessments

Corporate compliance is about managing risk. To build an effective program, you need to know what compliance areas pose the highest risks to your organization. Federal and state regulations, as well as industry standards, are constantly evolving. To avoid risk of noncompliance, its’ important to conduct regular assessments, such as assessing recent litigation, complaints, employee claims, and industry enforcement trends.

3) Establish And Maintain Your Code Of Conduct, Policies, And Standards

Your corporate compliance program needs a well defined code of conduct because it can help define your program’s purpose and set expectations for behavior. The code of conduct should explain

who is responsible for managing the program, how employees should report misconduct, and what disciplinary measures are put into place for violating the codes of conduct.

4) Properly Train All Employees

After establishing the policies and procedures for your corporate compliance program, you need to disseminate them to every member of your staff. All employees and relevant vendors should be trained on laws, regulations, corporate policies, and prohibited conduct.

Corporate compliance violations can result in fines, penalties, lawsuits, loss or reputation, and more. Keep your business from learning the lesson the hard way. Start developing a compliance program today.

Becoming a business owner, you control your own destiny, choose the people you work with, reap big rewards, challenge yourself, give back to the community, and you get to follow your passion. Knowing what you’re getting into is smart business because the responsibility of protecting your family and yourself falls on you.

For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com

Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice.

This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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