What is Regulatory Compliance and how does it help companies?

Doing business involves complying with legislation, adhering to regulations and standards, and establishing mechanisms to ensure Compliance in all areas of the company. This article discusses what is known as Compliance and its legal importance within companies.

Compliance is becoming increasingly relevant for companies seeking a place in a global market characterized by greater competitiveness, innovation, and security.

This practice emerged following the global financial crisis of 2008 as an alternative to regulate companies and protect users from speculative and fraudulent situations. Since then, it has helped companies protect their reputation and offer their customers confidence and transparency.

What is Regulatory Compliance?

Regulatory Compliance in companies has the main objective of ensuring Compliance with current legislation, as well as the norms and regulations specific to the business.

A department responsible for this issue has the function of preventing crimes within the organization through policies and procedures to prevent unlawful acts, which can lead to significant penalties and fines.

Regulatory Compliance involves a set of best practices and processes to ensure that a company complies with:

• Regulatory framework.
• Internal policies.
• Ethical codes and good practices.
• Commitments to third parties, such as customers and suppliers.

Implementing a compliance program helps companies identify legal and operational risks in three directions:

1. Penalties and fines.
2. Reputation loss due to non-compliance.
3. Financial and business costs.
   

What are its functions?

Regulatory Compliance is essential for companies to conduct business transparently, protecting their reputation and ensuring that all their executives, employees, suppliers, and customers are aware of the available tools to avoid breaking the law.

The main functions are:

• Preventive function: A compliance program helps identify the legal risks to which a company is exposed and recognize the means available to prevent crimes from materializing.

• Detection function: A compliance team is capable of identifying deficiencies in the company’s internal controls that may lead to non-compliance with regulations and is responsible for making the necessary adjustments and modifications.

• Communication and feedback function: Those responsible for Regulatory Compliance in companies must be prepared to constantly inform the organization’s management about the risks related to non-compliance, deficiencies in detection systems, and proposed corrective measures.
  

Why is it important for your company?

Implementing a Regulatory Compliance system in your company is important because it allows your organization to stay updated regarding the various regulations governing your economic activity.

In addition to avoiding financial penalties and helping to strengthen your reputation, it will help you stay in the market with a competitive advantage.

What benefits does integrating Regulatory Compliance bring to your company?

The benefits of setting up a strategic plan for Regulatory Compliance are numerous. Some of the most relevant ones include:

• Promotes constant updating of your company at the regulatory level, fostering continuous improvement.
• Increases trust in your company.
• Improves your brand image.
• Increases employee engagement and sense of belonging.
• Enhances internal communication within the company.
• Reduces the time spent on maintaining management systems.
• Promotes innovation.
• Helps identify solutions to the real and specific needs of the company in different fields.
  

Tips to improve Regulatory Compliance in your company

Implementing a Regulatory Compliance program requires dedication, commitment, experience, and teamwork. Below are some tips to do it effectively:

• Obtain support and commitment from top management.
• Involve and encourage the participation of all employees.
• Conduct training sessions so that employees are familiar with internal and external regulations and the mechanisms available to report irregularities or non-compliance.
• Carry out continuous monitoring and follow-ups.
• Leverage technology to utilize tools that facilitate Compliance with regulations and risk management.

Therefore, Regulatory Compliance should not be seen as an obstacle to business management but rather as an opportunity for constant improvement and innovation.

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