On the heels of the geopolitical and economic challenges of 2022, the new year will hone in on governance in the marketplace, bringing more regulations and requirements.
More focus will be put on governance and compliance framework and their support of effective decision-making as well as tracking against corporate and regulatory obligations.
Developing a robust strategy for managing upcoming regulatory change will help set your compliance efforts for success — and here is how.
Establish Your Regulatory DNA
As regulations change, and new legislation is in constant flux, identifying the applicability of regulations for your compliance program is difficult.
You may have disparate lists of “Legal Requirement Obligations” or “Compliance Requirements”, managed in spreadsheets among team members. However, juggling a variety of documents among different teams means they are likely to be irregularly updated, prone to human error, and create multiple sources of truth.
The best way to approach regulatory compliance that will be scalable and effective is to start with the cornerstone – your own law library. This law library will become the core DNA of your regulatory change management as the amendments roll in.
Here are the key steps in this process:
- Identify applicable regulations;
- Understand the requirements and associated risks;
- Establish controls tied to risks;
- Track changes to regulations to update risk and controls, as needed, to maintain compliance;
- Collect compliance documentation;
- Capture the compliance process in an auditable format;
- Scan the horizon to anticipate future legislative changes by analyzing bills and enforcement actions.
- Remember to include third-party relationships as well.
Conduct a Thorough Compliance Audit
What is your organization’s compliance baseline today? Are you comprehensively covering what is required in the jurisdictions where you operate?
Make sure to identify the weaknesses in your current compliance program as well — from security policies to risk management procedures. Look for compliance gaps and problem areas that pose a risk or negatively impact the organization.
Check if your program needs to cover topics, such as:
- Data Protection
- Employment Law
- Export Controls
- Fair Competition
- Environment, Health, and Safety
- IT Safety and Security
- Product Safety
Establish and Maintain Policies and Procedures
Your policies and procedures must address the compliance areas identified in the audit above.
- Map your company’s policies and procedures to the laws and regulations in your law library. Include legal entities, products, risks, and controls.
- Whenever a regulation changes, update impacted policies and procedures.
- Organize the evidence collection process for policy management procedures involving tracking when a stakeholder has read and signed the document.
- Coordinate with stakeholders during the evidence-collection process.
- Review the evidence.
Regulatory Compliance Training
This step is to ensure that everyone in your organization is aware of the latest and most up-to-date policies and procedures. This should also cover your partners, vendors, and customers.
As regulations change and new laws are introduced more frequently, you must continually stress-test your controls. And with today’s regulatory scrutiny, you need to be able to holistically demonstrate the following:
- How you are adhering to country and region-specific regulations;
- How you are evidencing good culture and conduct;
- What monitoring mechanisms are set up for self-audit;
- Show program maturity:
- How you are improving from previous audits/audit findings;
- How the controls are being strengthened (a weak control may not achieve compliance with current law/regulations).
External auditors are looking for a comprehensive way to see your compliance and control testing. If you struggle to demonstrate your processes holistically, the auditor will assume your compliance program is incomplete.
Incorporate Automation Tools
There is a lot on the line for risk and compliance officers, as it takes a lot of work to manage regulatory compliance holistically, often leaving teams overtaxed and lagging behind. This can jeopardize timely policy updates, especially if there is an auditor coming in, leading to hefty fines and bad press for the company.
Today’s automation tools have evolved from automating repetitive tasks to preemptive automation. The use of artificial intelligence (AI) in technology complements human expertise by adding efficiencies of scale and liberating time and resources for more high-value priorities.
While some solutions fulfill a very specific need within a compliance function (like providing regulatory alerts or risk management), there are more comprehensive options that cater to the entire regulatory intelligence process – tailored law library, regulatory change management, and compliance management.
Regology’s regulatory intelligence platform comprises both regulatory change management and compliance solutions, offering:
- A pre-curated law library that is specific to the global or local jurisdictions where you operate;
- Comprehensive tracking of the regulations that apply to the organization directly and its industry;
- Smart, configured alerts that notify what regulatory change is happening, filtering out whatever is not relevant;
- An at-a-glance view of what definitions, requirements, enforcement actions and other important items apply;
- Ability to easily and quickly map risks, controls, and policies, as well as whoever is assigned to them.