Why a Compliance Risk Management Program is a must?

Enterprise risk management is a painful and costly affair, especially when there is no proper planning. While the process can be quite challenging, there is always a way of easing the process. One of the ways of making the process less painful and more efficient is pushing compliance responsibilities as closer to the business front lines as possible. When the right compliance processes are adopted and updated, crucial compliance tasks might just be inadvertently cancelled or mitigated without anyone getting to understand the impact on the firm.

At this point, compliance risk management program usually come in handy. The benefit of an effective governance system and a holistic approach to compliance are tremendous. Compliance that is handled with a holistic approach is capable of adding value to any firm if applied consistently. However, one of the major challenges of dealing with compliance is embedding a compliance culture in the entire company. There are three simple, but extremely important factors that are crucial in creating benefits through compliance risk management program. They include:

- Creating a clear as well as consistent process of communication at all levels of the organization. The developed communication process should outline expected standards in which compliance is integrated. This will go a long way in ensuring visible, embedded and ongoing standards.

- Integrating key performance indicators in the job designs in issues concerning compliance.

- Developing an environment where compliance is considered a collaborative effort.

One of the biggest risk as well as cost that organizations are facing is introducing a compliance program and yet running it separately from other management activities. For starters, when resources are directed towards a stand-alone project, they are instantly viewed as a huge cost because it is considered as in impediment instead of an opportunity to benefit from a good business practice. In this regard, compliance projects should be run together with other business projects.

The potential risks to the company when there is no compliance program in place are huge. For once, such a business will not have a license to operate under legally. What is more, businesses may never realize their potential. As a result of compliance risk management, principals have become better managers since business success is not solely dependent on the creation of a good relationship with their customers. Business managers have been forced to consider the risks of all business operations carefully. Hence, they are in a better position to apply forward thinking and handle any uncertainties and changes that may arise in the future.