Corporate compliance involves adhering/following to a wide range of rules, regulations, laws, and standards which are designed to protect your business, employees, stakeholders and all others involved in the organization. Right from obeying safety guidelines, to following the standards for payment of wages an organization must comply with all the local, state and federal laws at all the times.
In recent years, adhering to the laws and standards, and monitoring the compliance of the business processes has evolved as a major concern for the business owners. Monitoring not only refers to continuously observing possible compliance violations but also includes predicting possible compliance violations in the future. Since the concept of business process compliance is vast, thus approaches related to process monitoring are hard to identify. Monitoring the compliance of business processes with relevant regulations, constraints, and rules during runtime has evolved as a major concern in practice.
The cost of non-compliance and monetary fines have been continuously increasing in the past few years. However, business owners are getting impatient as these consequences would affect the organization in many ways. Increased complexity, enforced business changes, and individuals being held personally accountable are all set to continue because of continuous compliance failures.
Why Statutory compliance
- Required by Law-All the registered companies are required by Lato follow the statutory laws and comply with them.
- Audits-Non-compliance also invites unnecessary inspection and audits, leading to waste of time and money.
- Financial Penalties-Non-adherence to statutory Compliance leads to payment of heavy fines and indirect loss to companies.
- Imprisonment-Non-compliance may lead to fines and imprisonment of the CEO/Directors/Board members
- Brand Value and Market Reputation– Payment of fines and imprisonment can destroy a company’s brand name
- The company shut down– In serious non-compliance cases, companies are asked to shut down by the authorities.
Recent examples of the impact of being Non –Compliant – Referred from QuickBooks Resource Centre
- The Department of Labour’s Wage and Hour Division (WHD) recently obtained a consent judgment of nearly $1 million to secure the payment of back wages from Manna, a restaurant chain operating in New York.
- Businesses that are found to have discriminated against an applicant’s protected class (e.g. religion, national origin, sex, etc.) can expect to pay up to $300,000 in compensatory and punitive damages, depending on the size of the offending company.
- If you are alerted to an OSHA violation, don’t hesitate to correct it. Allegations of blocking exits and hazardous conditions at a Boston location led to Dollar Tree Stores facing a fine of $177,800.
Newer technology driven solutions have emerged to protect businesses from Non-Compliance
Compliance requirements can be complex, and business owners may not always be fully educated about the latest rules and regulations.
Because of the vast number of government guidelines for compliance, it can be easy for business owners to find themselves in violation, leaving their companies open to penalties and even dissolution. Having a complete and thorough understanding of corporate compliance is crucial to protecting your business in the years to come.
Illustrative benefits of using technology driven approach:
- Reduces business risks
- Helps to expedite global expansion
- Enhances control and visibility
- Real-time, cloud based platform
- Enables proactive alerts, notifications, and escalations to eliminate business risks
- Interactive global compliance command center -that allows you to change priorities, delegate activities and monitor progress
- Flexible, customizable
- Intelligent dashboard, alerts, and analytics.
After all, when it comes to non-compliance issues, ignorance of the law is no defense.