Global compliance handles the legislative and operational risks of the organization by ensuring conformity to legislation, norms, and policies. Additionally, it establishes and executes divisional policies and procedures while analyzing regulatory trends and developments in all countries where the company does business. Global compliance is accountable for handling audits and inquiries, training our employees on our rules and processes, conducting surveillance, and evaluating the company’s risk management infrastructure in relation to business advice.
How to develop an effective global compliance program?
Compliance management can be challenging, requiring a constant focus on even the most minute details because regulatory systems are dynamic. In the context of global compliance, this problem is made worse by the fact that different jurisdictions handle regulatory standards in different, and sometimes even opposite, ways.
Even though there is no one-size-fits-all solution, existing standards and principles can be used to make sure that global compliance management is correct.
- Ensure openness in the dissemination of compliance procedures.
Many multinational corporations have diverse internal structures. These can vary between departments and even offices located in different cities. Business leaders must take all necessary steps to ensure that compliance practices and messages are effectively communicated.
For instance, conduct regular compliance training to ensure that all employers receive the most recent information regarding compliance risks and policies. Compliance training can make these sessions more relevant by tailoring them to local offices in various regions.
Periodic surveys are a good way to find out how knowledgeable an employee is about compliance issues that affect them and to show that the company wants to help the employee deal with any problems that might come up.
- Acquire knowledge about the local standards that govern each jurisdiction.
Effective global compliance management necessitates conducting due diligence on local expertise for different jurisdictions. This includes internal policies and practices and federal and state laws, such as those regarding donations, corporate sponsorships, healthcare, employee safety, taxes, and licensing.
Local standards can vary from one area to the next, and your organization’s standard operating procedures need to take this into account.
- Analyze risks on a regular basis.
Identifying the areas that pose the most significant risk to your organization is a critical component of a successful global compliance program. Risk management is at the forefront of international compliance.
This permits you to allocate the appropriate resources to address these potential issues. A yearly evaluation should be conducted to remain updated with the changes in industry standards, especially for multinational corporations.
Employee claims, audit findings, compliance guidelines for each risk area, and complaints about compliance may all be included in a formal assessment profile.
What are the consequences of non-compliance?
When your organization has various sites across national and state/province/territorial boundaries, you must determine how you will handle global compliance.
Compliance violations may have severe repercussions for a multinational firm. We list some of the potential outcomes below.
Severe Civil Penalties and Sanctions
Google and Amazon, for example, were both regulated by French privacy authorities in 2020. These fines were imposed for failing to get client approval before removing non-essential cookies.
Criminal penalties
If corporate executives don’t follow criminal laws, like those that say they can’t bribe, launder money, or commit fraud, they could be jailed or face other criminal consequences.
Violation of contract
Compliance is frequently a stipulation in B2B negotiations. A violation of these compliance criteria may constitute a serious breach of contract. This implies that the violation might result in contract termination, judicial injunctions, and the payment of damages.
Cancellation of licenses or permits
In several sectors, firms are required to possess regulatory-approved licenses or approvals/authorities. Infringements of compliance may lead to the cancellation of such permits and licenses.
Reputational harm
For the sake of your business prospects in the future, you must do everything you can to avoid the reputational damage that comes with not following the rules.
How do you handle compliance?
To maintain compliance, the following procedure must be implemented:
- Recognize the problems.
- Define stakeholder needs.
- Determine the program scope.
- Establish a governance framework & compliance policies.
- Identify duties & hazards.
- Develop a strategy to fulfill responsibilities and mitigate risks.
- Define accountability and responsibility.
- Implement a system for managing compliance.
Administer global compliance using dependable third-party solutions
Even the most meticulous compliance efforts are susceptible to risks. This is amplified for multinational corporations that operate in multiple regions.
Working with a company that offers global compliance solutions, like Soundlines, will help to reduce this risk and provide you with the assurance you need. Our human resource compliance solutions can be customized to your organization’s needs to ensure that compliance across all regions and locations where you operate is in line with the most current regulatory standards.
To handle the payroll requirements of businesses expanding to new locations but have not yet created their legal entity, Soundlines can serve as the official Employer of Record.
Get in touch with us to learn more about our services and how we can tailor them to your specific needs
