5 Tips for Risk Management and Compliance

Though you might have the appropriate policies and procedures in place, risk management and compliance is an ongoing task. With a regulatory landscape that is constantly evolving, it’s worthwhile to check in often and develop strategies accordingly. By updating your frameworks, you can preserve the integrity of your corporation, prevent legal fines or legal action as a result of a regulatory misstep, and prevent any business downtime or long-term costs.

Here are our top tips for risk management and compliance:

1. Assess which area of your business is most at risk. Is it in property and liability? Tax? Employee policy? Risk management and compliance cover a lot of ground. Of course, there should be compliance programs at work for every aspect of your business, but identifying where is most at risk can allow you to better develop a focused plan. As every business can involve different kinds of risk, strategies should be flexible enough to be reactive but should not aim to be one-size-fits-all.

2. Manage information risk. This is an area where many companies can be vulnerable. It’s vital that businesses have a policy in place that covers the security of information, from storage method (paper or electronic), how long it is kept, to what happens when records have to change hands, and so on. The right processes are needed in order to maintain the well-organized preservation of records while reducing security risks.

3. Keep up to date with new policy requirements and regulations. Business conditions change all the time, whether through external influences or internal. Throughout the year, it’s important to continually assess whether you’re managing old risks, while also looking out for areas where there could be new risks. This is especially important for growing businesses. An expanded business with its increasing resources and information, and also potentially a changing business model, could mean greater liability. It’s also important to keep up to date with changing requirements for compliance. The Australian Competition and Consumer Commission (ACCC) for example, releases a policy update every year – the 2017 version will be released in February.

4. Integrate risk management with the rest of your business. Your risk management plan should be aligned with your business goals at every step of the way. This includes bringing awareness to your plan and getting employees or partners involved in the execution of the plan. This might include training employees and keeping them informed. At the same time, clear measures of success should be outlined. Again, as business conditions change, your goals and risk management plan might change accordingly as well.

5. Work with trusted expertise. Identify the skills and expertise you need for risk management and compliance. Are they legal? Financial? Strategic? Delegating tasks to the right people will strengthen your risk management and compliance programs while laying down a sustainable framework for the future of your business.

The Takeaway

As every business leader knows, the risk is involved in every business decision made. It’s an uncertain world out there, and there a myriad of ways unforeseen events can affect your business. With the proper plans and processes in place, you can reduce the impact of these events and ensure the longevity of your business.

What Should I Do Next?

Contact us if you would like further legal advice on developing Risk Management and Compliance programs. Our lawyers at You Legal will be happy to assist you in whatever way we can.

* This blog is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.