In this digital age, running a business has become more complicated than before. On one hand, technology has made things easier for businessmen; it has also presented them with challenges such as protecting consumer privacy, adhering to ethical values, and staying in line with legal practices.
As a businessman, it is your duty to operate within these standards. You can’t afford to invest in your products and services meanwhile paying for the cost associated with non-compliance. In this article, I am going to give a brief overview of what compliance is, the risks of non-compliance, and the benefits of adhering to compliance management. So, without further ado, let’s carry on.
What is Compliance?
Before we jump into the importance of compliance for your business, it is essential that you understand what compliance actually is. A lot of businesses just focus on offering a unique product and services and ignore this part, which ends up becoming the bane of their existence.
In terms of running a business, compliance simply means obeying all the rules and regulations, but in the true essence of things, its meaning surpasses far beyond its definition. Depending on the industry you belong to, compliance relates to executing and operating within a certain set of standards.
From licensing and permit regulations to food safety, workplace safety, anti-pollution policies, ethical practices, privacy issues, and more, every business has some rules to follow. If you build an organizational structure that falls within these rules, only then will you be able to call yourself a fully compliant business.
Risks of Non-Compliance
Now that we have talked about what compliance is and the basic rules and regulations that fall within it, let me break down some of the major risks involved if you are not able to fit the mold of compliance. Businesses that are out of compliance face a lot of challenges, some of which are:
– Fines and Penalties
Various penalties have been designed to make sure that businesses stay in line with industry standards. Failure to comply with these standards can lead to an action that might result in on-spot fines, full-on prosecution, and disciplinary actions, which might result in your license being canceled.
Regulations like GDPR, which is aimed to protect citizen privacy, may hold you liable for 4% of your entire revenue or €20 million. GDPR compliance is essential for businesses holding information regarding EU citizens. If you want to learn more about GDPR auditors, you can browse over to the linked article.
– Reputational Damage
One of the worst consequences of non-compliance is its effect on your company’s reputation. If you are not doing your best to protect your customers and clients, you are going to face a lot of backlash from the community.
Maintaining your brand’s reputation needs to be a core part of your strategy as consumers are paying more and more attention to integrity. If your beliefs don’t align with theirs, they are simply going to take their money elsewhere, and you are going to lose a lot of revenue.
– Legal Issues
Another major implication of not keeping up with compliance is it can bring legal issues like lawsuits or criminal charges right to your doorstep. If you don’t spend some money to make your business legally valid, you are potentially going to lose millions of dollars in case of a lawsuit.
You have to understand that compliance is meant for your own protection. Compliance laws exist to keep the people safe, make sure that everyone is treated fairly, and most importantly, you take the needed steps to protect personal information.
How Is Compliance Connected To A Better Workspace?
Running a business is a tedious task, and most people are so invested in overtaking their competitors, they forget to think about the grand scheme of things. You have to understand that your most valuable product is your staff, which is why you need to make them happy.
If you don’t offer them basic rights or don’t protect your employees, you are going to antagonize them. Employee satisfaction and retention rate is going to take a considerable hit, which is going to hinder your overall success.
Benefits of Paying Attention to Compliance
To put it simply, a company’s growth and compliance go hand in hand as you can’t achieve the former without accomplishing the latter. Here are some of the major benefits you will get by focusing on improving your business compliance.
– Helps You Fulfil Your Duty to Community
The first and the most basic reason is that each business relies on the community to grow. As you have a vested interest in your local community, it is your duty to ensure that you are doing everything you can to safeguard their rights.
– Enhances Operational Consistency
Last but not least, compliance also introduces a set of principles within an organization. Once you have developed a set of values, policies, and code of conduct, you have a reference point through which you can judge your own performance and the performance of your employees.
– Allows You to Build Trust with Business Partners
If you have built your business on some ground values, you can’t ensure those values are being valued after you have turned into a huge corporation. As the head of the organization, you won’t be able to overlook every aspect of your business. Compliance is going to help you get the peace of mind that you are still true to the promises you have made with your business partners and your employees, regardless of how much you grow.
– Drives Change and Innovation
A business is more than the product and services it offers. If we follow this basic rule, compliance can be seen as one of the best ways you can introduce innovation in your organization. By making sure that each employee follows a certain set of protocols, you can stem value from the ground up, which plays a huge part in influencing organizational behavior and driving the needed change to become the best of the best.