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Managing compliance risks

For many, managing compliance risks can seem like a daunting task. As such, here are some tips to consider when evaluating your approach to compliance risks management.

Begin with a risk assessment

Compliance risks can’t be managed if you aren’t aware of your actual risks. Without assessing your risks compliance programs will accomplish little if the right risks aren’t addressed. When it comes to risk assessment there isn’t a one-size-fits all approach, which is why it is important to assess your risks in order to effectively and efficiently utilize resources to address them.

Third-party due diligence

Often time businesses deal with third parties. The number varies depending on the size and type of business. Performing due diligence at some level becomes essential. Many compliance risks are associated with interaction with third parties. Therefore, a strong due diligence process is a critical part in attempting to manage compliance risks.

Understand the policies

When it comes to compliance risk it is important that you not only understand imposed requirements by laws and regulations; but that you also stay updated on the latest guidance policies issued by enforcement agencies. This will help reduce the risk of your business being out of compliance with any laws or regulations.

Build a culture of ethics and compliance

It is easy to lose yourself in trying to tailor your program to the latest policies and procedures. Problems begin to arise when compliance management becomes a tick-box exercise. Many businesses become hyper focused on the policies, law and regulations. To avoid this issue the focus should be what actually works for your business.

Building this culture tone at the top is crucial. Clearly communicating to all levels the type of ethical conduct expected from them.

A strong ethics and compliance culture in your organization aids in ensuring people feel they can speak freely if they witness misconduct without fear of retaliation.

Monitor and update

It would be a mistake to assume that managing compliance risks is a one-time process. Policies, laws and regulations are continuously changing. To determine if your procedures are effective, you should evaluate them on a regular basis.

Implement automation

Compliance risk management entails a lot of complicated processes, but it also involves numerous mundane tasks such as locating employees for signatures or retrieving records from spreadsheets and documents. Automation of these can free up time to allow you to obtain a greater insight into your data to assist in improving your program.

Compliance risk management is no easy task; it entails numerous complex processes and concerted efforts to be successful. So we hope these pointers can assist you in navigating how to best manage the compliance risks in your organization.

For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.

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