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Does your company have an effective compliance programme?

An effective programme is a result of excellent internal controls and a long standing culture of accountability. However, it is never enough to only implement the program. It is essential for the management to regularly monitor and administered the programme. It also needs constant updating. Previously, we have tried to discuss to importance of documenting a compliance programme. This article explores the common problems faced while implementing a compliance programme.


Essential Elements

Following are the essential elements of a compliance programme:

  • Identification of Risk and its assessment
  • Standardized and documented procedures, policies and controls
  • Commitment from management and leadership
  • Relevant communication to the users followed by regular guidance and training
  • Continuous monitoring, auditing and holistic reviews
  • Inculcating discipline and a culture of reporting


Failure to identify/quantify all the risks.

To begin with, it is essential for the organization to identify and list down all the risks. They can be both, quantifiable and unquantifiable risks. Then rank them based on the impact they would have on the business in case of occurrence.

The intangible risks, need to be quantified to get a better understanding of the entire program. All the organizations should invest the time and resources to realize this goal. Thus, along with financial and accounting risks, one needs to quantify various other risks. E.g. Reputational risk, credit risk, behavioral risk etc.

Failure to obtain multilevel management commitment

It is very difficult to change and convince other to change! Asking for commitment to integrity and best practices from any level of management is a tough job. Obtaining such a promise from all levels of authorities involves dealing with various aspects of human behavior. To solve this, one should convince the most influential member of the management to set the mood for change. It is necessary not to give up and take small steps towards the same.

Failure to integrate the program among all functions

One of the common missteps during the design of a corporate compliance program is the failure to integrate the program among all functions. An effective program will thread seamlessly through the administration, accounting, production, sales and service. Through integration, the organization can coordinate common activities among each function, eliminating redundancy and waste. Careful and thoughtful design should avoid or at least minimize bottlenecks. The integration among functions ultimately serves as an invaluable means of checks and balances among departments within the organization.


Failure to provide a mechanism to encourage employees

If the company does not encourage the employees to imbibe the new culture, then the entire program will be unsuccessful. One has to abide by the compliance program to make effective. He company should find ways to reward positive behavior which results in compliance on time and in the specified manner. Also, it is important for the organization to protect the anonymity of a whistle-blower to shelter them from violators as well as other employees.

Click here to access a sample compliance program template.


Implementation and maintenance of the program should be followed by a robust mechanism which helps the company solve the existing problems. Integration of the program at every level of the company helps reduce siloed work culture. VComply is a perfect example of a tool which helps the organization to implement a robust compliance program. It helps in entrusting, verifying, analyzing and sustaining the program a piece of cake!

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