There are three layers to compliance: Compliance with regulations, standards defined by various organizations and industry groups, and internal policies. The most stringent compliance tier is compliance with regulations. The regulatory requirements are rules that the government impose on organizations. Both federal and state governments define rules and regulations that govern the conduct of companies and how they interact with customers and employees. One of the typical examples of a regulation that a company should publish financial statement every quarter. The second layer of compliance risks are the standards that put forth by international organizations and industry groups. For instance, companies need to follow ISO standards and deliver products and services that meet regulatory and customer requirements. To be certified in ISO series of standards, a company should adhere to the requirements outlined by the International Organization for Standardization. The third layer is the internal policies that an organization establishes to perform efficiently and effectively and to keep up with the regulations.

Understand the risk of non-compliance

Compliance officers need to assess and understand the risk of non-compliance. Some of these risks need to be prioritized and addressed aggressively as they might result in huge fine, reputational damage that companies might not be able to recover from. For instance, the US banking regulators fined Citigroup $400 million on Thursday for “longstanding failure” to fix its data and risk management systems recently. So, the first and foremost step is to understand what your organization’s compliance risks are, how have they become risks, rank risks based on the priority and create a compliance risk management plan to address these high priority risks.

Implementing successful compliance risk management programs

Successful compliance risk management programs adopt a risk-based approach to achieve its goals. Compliance officers identify the priority compliance risks and implement controls to address them. It allows the compliance teams to focus on the compliance risks that matter to them the most. They can tailor their compliance programs to make them ready to respond to risks rapidly. VComply is a leading GRC platform that helps meet the demands of compliance professionals by helping them perform risk assessment and implement controls.