4 Factors to Implementing a Successful Compliance Program
A compliance program serves several purposes. It’s an internal system that businesses employ for the purpose of identifying and/or reducing risks arising from breach of regulations set up by the Australian Competition and Consumer Commission (ACCC). Companies have to adhere to the laws and regulations put in place by their respective governments. However, many times these programs fail. It’s for this reason that the programs need constant evaluation to determine whether they are likely to fail or succeed.
1. Set Up Company-Specific Procedures
Each company should set up its own procedures that are not only clear but accessible. Compliance programs that are vague or overly complex in language will only be ineffective. Other than this, each company must also establish its own ways of assessing risks. Establishing procedures and methods of assessing risks helps in prohibiting misconduct. Consultation across the board is highly encouraged to ensure that all procedures work smoothly. It’s important to put everything in place for compliance programs to succeed rather than fail. Each company has to look at the following:
Setting up processes required for designing and reviewing all anti-corruption policies and procedures
Developing a formula for identifying, analyzing and addressing risks
Collecting the right information needed for detecting misconduct and ascertaining its role in making the compliance program effective
Checking if the risk assessment addresses risks associated with the emerging misconducts effectively
2. Promote Commitment from the Top-Down
Compliance programs succeed when there is a thorough commitment across the company structure. What this means is that compliance has to take place from the top to the bottom. Everybody within the organization must embrace compliance. Compliance programs apply to all employees equally. Management at the senior and medium levels must directly and actively discourage employees from all forms of misconduct. Training and open communication should be incorporated to ensure that compliance programs and all relevant procedures can be adhered to across the company, for risks to be managed effectively.
3. Tackle the Possibility of Bribery
One factor that’s responsible for compliance programs failing is bribery. In Australia, the government established the Criminal Code (also known as Cth) with the aim of prohibiting bribery of public officials from foreign countries participating in all manner of international business transactions. The Criminal Code penalizes corporations caught up in bribery with a minimum fine of $18 million. The penalty for bribery can also be:
10 per cent of the corporation’s annual turnover
three times the value/amount of the benefit the corporation obtained from the bribery
4. Factor in Continuous Improvement
Lastly, continuous improvement and monitoring are mandatory. Improvements come in different forms and include using testing controls to audit compliance programs. Also, it involves constantly updating the risk assessments while reviewing all compliance procedures and policies. All compliance programs must meet the specific risks each business faces.
WHAT DO I DO NOW?
Contact us if you would like to have more information on creating a compliance program. 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.