The Compliance Department And Risk

Actively tracking and addressing risk is a daunting task for compliance departments that are stretched thin. This piece details the most critical risks and how to manage them with limited resources.

Gaining External Support For The Compliance Mission

As risk to the company continues to increase over time, compliance officers will inevitably need a corresponding increase in resources to make sure their company is adequately prepared to steer clear of trouble. Central to this effort is gaining the support of senior executives from outside of compliance. Having buy-in from outside the department will increase the odds that the compliance function receives the financial support necessary to operate properly, as well the support required to alter the company culture as needed. Without such support, it is far less likely that the compliance team will be able to keep the other departments free to focus on driving the business forward.

Having buy-in from outside the department will increase the odds that the compliance function receives the financial support necessary to operate properly, as well the support required to alter the company culture as needed.

Emerging Risks For Compliance Teams

As the compliance team moves forward in 2016, its leadership may discover risks in areas that were previously unknown or less significant. These discoveries will inevitably require new approaches—particularly when the evolving risk involves new geographical territories or third-party vendors. To stay ahead of these risks, compliance leaders should work tirelessly to educate themselves on the regulations relevant to the company’s new markets or partners, as well as stay on top of changes to rules relevant to existing efforts.

Educating The Team To Mitigate Risk

In order to mitigate risks effectively without unlimited resources, chief compliance officers can employ a number of useful strategies. A primary strategy is to take the time to educate new and current hires throughout the business fully on the role of the compliance department, the primary risks each employee should watch for, and how that employee can report risks to compliance. Collaborate with the HR department to develop a company-wide compliance-training program, and be sure to provide for continuing training to account for regulatory changes.

Collaborate with the HR department to develop a company-wide compliance-training program.

Conclusion

Not all compliance departments are created equal, and most compliance departments in today’s corporate environment must battle for the necessary resources to keep the business out of trouble. However, a tight budget does not necessarily mean that compliance leaders will be incapable of mitigating risk. To the contrary, by employing the strategies above, compliance executives can keep the company out of trouble without breaking the company bank.