For a business to function legally, industry standards must be observed and complied with. These can take the form of laws, regulations, and ethical conduct standards, and ensures that companies act responsibly and legally within the constraints of the law and are applying due diligence in their adherence. This is generally referred to as business compliance, though the ins and outs of how to conduct business depend on industry and company type.
For example, if you’re a manufacturing company that oversees proper waste disposal in line with environmental laws, this will demonstrate compliance with local and environmental regulations, which in turn protects not only the company but its reputation and its stakeholders by showcasing sustainable practices.
Companies are sometimes visited by compliance officers who are responsible for overseeing these processes and ensuring that both legal requirements and internal corporate policies are met.
Compliance officers work closely with managerial staff to identify and address compliance risk.
What Is Compliance Risk?
Compliance risk will refer to the potential harm a company may face for failing to comply with laws, regulations, and/or industry standards (the specifics of which will vary depending on industry). The consequences of falling foul of compliance risk include financial penalties, damage to your reputation as a company, and even business closure if the violation is severe enough.
The importance of compliance in business extends beyond simply avoiding fines; if you’re seen as a company that follows the rules and is honest about their operations, this can build trust with customers, investors, and partners, securing longevity and success. It is also important to stay up to date with regulation changes and to conduct audits and train employees, reducing risks and enhancing operational efficiency.
Of course, there are ways to stay compliant by incorporating workflow automation into business processes. Investing in opportunities to efficiently grow your business through the use of optimised and efficient business systems goes a long way in complying with certain regulations. For instance, we at Digital Scientists can manage workflows and documents digitally, reducing errors and ensuring compliance with industry standards such as data protection and financial reporting. As trusted members of the Zoho Partner program, we can also liaise with Zoho to resolve problems as they occur, and suggest automation that will help your business operate with greater efficiency. Integration across departments further enhances compliance by ensuring consistent processes and accountability, which is crucial for meeting regulatory requirements.
