Have you ever changed your behavior in response to a request from someone else? Perhaps you bought a product after a pushy salesperson or tried a new soda after seeing a celebrity endorsement. This type of compliance is a form of social influence and is sometimes called obedience. Compliance may seem like a no-brainer, but many businesses overlook the importance of a strong compliance function. Whether it’s avoiding a data breach or keeping employees safe, compliance regulations help keep your business running smoothly.
Having a dedicated compliance officer or department is critical to your organization’s success. This person can create a strategy to reduce risk and monitor your business for red flags that might lead to regulatory penalties or costly lawsuits. You also need a system to create, distribute, and track compliance policies. An online policy management system, such as PowerDMS, will allow you to communicate important rules and regulations clearly, consistently, and easily.
In addition to reducing your legal risks, having a strong compliance function can improve employee morale. This is because it shows your employees that you care about them and are committed to providing a safe, professional, and fair work environment. It can be challenging to find and retain great employees, so keeping them happy is essential to your company’s growth. A strong compliance function can help you do this by communicating clearly and regularly about your values, ethics, and rules.
The other reason it’s crucial to have a strong compliance function is that it can protect your reputation. A damaged reputation can cause you to lose customers, which can be a financial disaster for your business. Many leaders cite reputational risk as one of their biggest worries, and with good reason. Warren Buffett has famously said that it takes 20 years to build a reputation, and five minutes to ruin it. Having a strong compliance function can help you avoid damage to your reputation by ensuring that all of your employees are following the rules.
As a small business owner, you may struggle to maintain compliance with all of the laws and regulations that apply to your company. This is especially true if your industry is constantly changing. You may need to hire a consultant or full-time compliance officer to create a comprehensive plan for your business. They can also review your current cybersecurity measures and identify any areas of potential weakness. This way, you can make changes to your policies before a data breach or other regulatory problem occurs. This will help you avoid the costs of a fine or penalty and will also protect your reputation in the eyes of customers. It’s better to pay a little bit of money for compliance help than to suffer the damage to your reputation that could follow non-compliance.