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We are thrilled to announce that peer-to-peer business software review platform G2 has again placed VComply as a High Performer in the GRC Platform category in their Winter 2021 announcement. Organizations rely on research firms like G2 to help them analyze and compare business software products, and we are excited about the recognition.
We are thankful to our valued customers for this validation. We consider user feedback as a great technique to stay in close contact with our customers and get up to speed on improvements and provide value.
In case you missed it, here’s the score that our customers have given us:
Besides this, VComply also stands out in the following areas:
VComply received 8.7 score on a scale of 1-10 for ease of use, outranking many competitors in the GRC category and became a preferred choice for customers.
At VComply, we take great pride in serving our customers. We talk to our customers and help them find the quickest way to solve their problems. And the results speak for themselves! VComply received a score of 8.7 in the quality of support category.
VComply scored 8.7 in the ease of setup category. VComply is intuitive and it is very easy to create an account on VComply. On an average, our customers have gone on-live in less than 2 weeks.
At VComply, our goal is to make the easiest and the most useful GRC software for organizations. Ever since we started in 2019, we have adopted a customer-centric approach. We have made meaningful changes to our compliance, risk, and audit product range to meet the evolving requirements of our customers. Now, VComply helps teams across compliance, risks, audit, human resources, and legal in varied industry sectors to manage their individual responsibilities, while making it easier for leadership to coordinate organization wide compliance activities.
It was simple, it was easy to engage with, and it had a little bit of light-heartedness as well as a very easy to use Dashboard and reports. With VComply, our teams can quickly and easily comply with responsibilities, and our ability to provide oversight across the agency, in one central location is achieved.
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We recognize that there is a lot of work ahead. And, we are committed to the vision of making the world’s most trusted GRC platform for our customers. We continue to add robust features and enhance existing features in our platform to help you strengthen the compliance and integrity of your organization.
Read our reviews here on G2!
In the modern-day market and workplace, risk is a part and parcel of business operations. Considering the shift to remote working, threats and potential vulnerabilities are ever present, which is why risk management is now a top priority. As a matter of fact, in 2021, General Data Protection Regulation fines rose by around 40%. Big names like the Marriott and British Airways incurred fines of $23.8 million and $26 million, respectively, for data breaches. This is the cost of poor risk assessment and management controls in today’s economic climate. Thankfully, auditors and risk management teams can get ahead of such problem areas with clearly defined key risk indicators (KRIs).
Much like key performance indicators, KRIs offer invaluable insight for any organization. In this case of British Airways and Marriott, it is data that caused the potential weak spots of operation. In a competitive, fast-paced and ever-changing business environment, having clear KRIs is what helps a company work toward its goals without incurring the sting of noncompliance or breaches. However, simply establishing these indicators isn’t enough.
Even with a well-established KRI framework, there are challenges the company may still face. For instance, a common misconception is that KRIs are a plug-and-play fix to risk management and control. This is far from the truth when in fact, it is a system that constantly evolves to complement the company’s goals. Moreover, there is a serious lack of understanding concerning the relationship between KPIs and KRIs, which can be damaging.
For more insight into KRIs and their role in bettering business practices, read on.
Key risk indicators are metrics used to measure how risky any given activity is, especially when it concerns business objectives. This is a quantifiable approach to risk identification and monitoring that provides invaluable information needed for risk mitigation. Basically, KRIs help predict risks through data and is an effective way of establishing controls to prevent future exposure.
However, for KRIs to be as effective as intended, there are some conditions they have to meet. For instance, KRIs should be:
All things considered, KRIs are meant to comprehensively answer the question, ‘What factors can prevent the company from achieving its goals?’ This is the most basic, and simultaneously the most profound, objective of this tool.
KRIs form an integral part of any operational risk management framework and it serves several other purposes too. Some of the main reasons why KRIs are important are that they:
There are several different types of KRIs and not all required for building an effective framework. In fact, for better management, it may be wise to use KRIs that best suit the industry, thus allowing for more detailed risk analysis across the board. Ultimately, these indicators should align with both internal and external factors to offer maximum insight.
Here are some of the most common KRI types to be aware of.
Operational KRIs:
Closely linked to operational risk and the factors that cause such losses. Generally, operation KRIs could range from ineffective internal controls to process inefficiencies, internal failures, leadership changes, and changes to a given entity's strategic goals.
Human resource KRIs:
These KRIs are most commonly utilized by HR departments or companies that deal with staffing and recruitment. Common KRI options include labor shortages, high staff turnover, low staff satisfaction or low recruiting conversion.
Technological KRIs:
Tech-related KRIs are very common across most industries. These KRIs measure system failures, data breach incidents or regulatory changes.
Financial KRIs:
Such KRIs are common amongst banks, CPA firms and other such entities. External KRIs include regulatory changes, economic crashes or others, while internal measures include acquisitions, budget changes or changes in strategic goals.
While most companies will, and should, have varying KRIs, there may be ground for commonality when discussing its implementation. KRIs must be linked to company strategies and enforced systematically across systems. This is where a roadmap can help, as it offers guidance.
Here is an example of what a high-level roadmap should look like.
While the principle of creating KRIs may seem quite straightforward, the truth is it is quite a problem for most companies. Some of the common challenges include:
Considering the inherent dependency on data, right from its collection protocols to accessibility and meaningful interpretation, it isn’t shocking that technology has a crucial role to play in this scenario. Effective KRI frameworks rest on the shoulders of technological tools for optimal implementation. They help eliminate the need for manual input, automate key processes and simplify tracking. Simply put, they offer a great deal of benefits, provided they are well equipped. The VComply GRC software suite is one such provision designed to meet these specific needs.
Make risk assessment, management and mitigation a breeze with this all-in-one, intuitive platform. This tool empowers teams and enables them to operate at maximum efficiency. Risk teams can use it to collaborate freely with the workshop functionality and enforce controls to mitigate losses. To know more about the software suite, contact us online.
Today's organizations face a plethora of challenges managing compliance, keeping up with internal policies, and improving social security practices. Needless to say, that managing compliance and risk management programs manually is a painful task. Fortunately, there is an influx of software applications in the compliance and risk management space claiming to reduce compliance and risk managers' pain. However, an unintuitive GRC platform laden with poor user experience will only add to problems.
A compliance and risk management platform is a significant investment. How do you select a GRC tool? What is the importance of user experience when evaluating a GRC tool? These are some of the questions you need to seek answers to before selecting the tool. Just in the case of any other software, usability and user experience is the key. If the software is not usable and ignores user satisfaction, customer retention might not be easy.
There is a tendency to use the term user experience interchangeably with the user interface. The fact is that they are different. User interface refers only to the aesthetics of the software. User experience covers all aspects of the end-users interaction with a product, and the user interface is a part of it. The goal of a good user experience is to accomplish the exact needs of the customer without fuss. The best UX focuses on simplifying the functionality and improving the user's interaction with the product.
It should:
When there is a gap in the customers' expectations from a great GRC platform and your product offering, it turns into bad UX costs. If your customers encounter a bad experience, if they don't find what they need or can't reach someone, they will abandon the product and not come back. For example, if the user experience does not allow the user to create and assign a control quickly after a risk assessment, it fails the purpose of an effective GRC platform. If the compliance team cannot collaborate on a document or a compliance obligation, or the leadership team do not get enough insights from the reports or dashboards, it can lead to wasted efforts, time, and frustration. In some cases, it can even add up to their tasks.
The common characteristics of bad UX are:
Bad UX has a price. You should prevent users from experiencing negative emotions in their interaction with the platform and implement an optimal user experience. A good UX's goal concerning a GRC platform is to let various stakeholders do what they need to do and help your organization remain compliant and keep risks at bay. To achieve this, adopt a user-centered design approach, perform usability tests and envisage how users will use the application, identify mistakes, correct them. The next best way is to understand how your customers feel about your application. Ask for their feedback. Customer feedback forms and NPS are effective tools to measure and understand customers' overall satisfaction.
VComply pays special attention to usability and overall experience of the user. We place focus on the following aspects of the user experience:
Navigation :There is a popular quote within the designer circle "It doesn't matter how good your application is if users can't find their way around it." Giving potential customers access to the information they want in the easiest way possible is the key. We keep our navigation and user experience simple, thereby reducing the friction points and making the experience enjoyable. For example, VComply makes it very easy to create or oversee a control associated with a SOC2 or GDPR framework.
Familiarity : We use a familiar approach in design and use simple and familiar elements within our interface. We have made it intuitive so that even first-time users should be able to use it easily.
Consistency: We kept our interface consistent across the VComply platform as it makes it easy for users to identify and familiarize themselves with the usage patterns.
Flexibility and efficiency: VComply knows the exact needs of its customers and their intents. Flexibility refers to allowing each type of customer to do what they need. For example, VComply allows an executive to know his compliance task on a particular day and a compliance officer to oversee a task or gain insights on overall compliance performance. When it comes to efficiency, the platform allows users to fulfill their tasks effortlessly and derive great value out of its features.
Legacy GRC tools aren't equipped or efficient enough to keep pace with the new-age user experience, which should be seen as a risk. Remember, compliance is considered an on-going process, and your tools should also embody that attribute. The ability to evolve and proactively adapt to an enjoyable user experience should be a functionality that the GRC tool offers. The VComply suite is equipped to address this need and does so seamlessly to successful compliance efforts.
Good governance is important for the smooth and effective functioning of the organization. It is a broader concept; and includes oversight and practices to establish an organization’s strategic direction and achieve its purpose and make the best use of available resources.
In this article, we'll take a look at what governance means, why it's important, and the steps to establish a strong governance framework.
Governance is defined as the systems that control and operate an organization’s decision-makers and the actions that hold its people accountable. This includes rules, laws, relationships, systems, and processes. Ethics, risk control, facilitation, and administration are all part of governance too. Governance is subtle and may not be easily observable.
Governance is much more than the organs of the organization. In a broad sense, it is about the culture and institutional environment in which the public and stakeholders interact among themselves and participate in public affairs.
Governance is the heart of any successful organization. A company or organization needs to achieve its objectives and drive improvement, as well as maintain legal and ethical standing in the eyes of shareholders, regulators, and the wider community.
The broader goals of good governance are as follows:
A culture of integrity exists when employees recognize top managers as honest, trustworthy, and ethical and there is transparency in working. This sets a positive example and allows them to be respectful, even during conflicts.
Good governance helps in maintaining healthy relationships between employers, employees, and co-workers. It leads to effective relationships in an organization.
Good governance has always been recognized as a critical tool for advancing sustainable development.
Achieving sustainable development is a participatory and constant process to achieve economic, environmental, and social objectives in a balanced and integrated manner.
It provides decision-makers with a framework for working systematically across sectors and territories. Ultimately, it helps standardize processes for consultation, negotiation, mediation, and consensus-building on priority societal issues where interests differ.
Good governance is also about measuring performance to achieve targets and takes appropriate actions, in case of non-performance.
The governance structure helps you work with updated systems and avoid mistakes due to redundant systems. When all rules are appropriately followed and every detail is recorded, it minimizes the chances of careless errors.
The benefits of good governance which can have a greater and positive effect on the business are as follows:
Consistency in good governance creates a culture of brilliance in an organization. The leadership's behavior defines the behavior of the personnel. Good governance helps reinforce this sentiment.
Good governance leads to good business outcomes, which in turn leads to better performance from the organization's employees. All of this has a positive effect on the reputation of a company.
Each organization has issues, problems, and nonconformities. An organization with good governance can eliminate these by diminishing the negative impact of these issues and containing the risk internally.
When major stakeholders such as employees, suppliers, and the wider community participate in decision making together, it creates a greater vision for successful outcomes. When each stakeholder has sufficient responsibility, it increases the chances of an organization reaching its goals.
Good governance reduces the fear of safety, performance, and warranty concerns, which may dangerously affect an organization and its stakeholders. This improves financial stability and safeguards the interests of customers, staff, suppliers, and shareholders.
An organization that represents stability and reliability has a greater chance of attracting investors of premium quality. It also increases opportunities to borrow funds at a higher rate.
It's easy to mistake good governance for good management, but both are different. Let's take a look at the finer differences between the two concepts:
Scope
Governance refers to the norms, strategic vision, and direction that formulate high-level goals and policies. Management runs the organization in line with the broad goals and direction set by the governing body.
Framework
Governance directs the management to ensure that the organization is achieving the desired outcomes and it ensures that the organization is acting wisely, ethically, and legally.
On the other hand, management makes operational decisions and policies to keep the governance bodies informed and educated. Management is always responsive to requests for additional information if required.
Goals
The role of governance is to ensure that the organization is working in the best interests of the public, and more specifically the stakeholders who are served by the organization’s mission
The management is responsible for implementing the broader vision and goals of governance.
Steps to Establish Good Governance
Let's take a look at the important steps to establish good governance:
Appoint a Suitable Board
A Board should be balanced and competent if you wish to achieve success from governance.
Qualified directors are a part of good governance who understand the business properly, and also provide a good point of view in the meetings.
Regularly review the board
The make-up of the board is crucial and can build or destroy the success of the corporate governance of the organization. A review of your board allows you to make improvements when needed and keep things up to the mark.
Build a strong foundation for inspection
Develop a strong system to monitor and evaluate the actions and responsibilities of the board and management. A board must have a clear view of management’s actions and be available while making all key decisions.
Make risk management a priority
Initiate a risk management plan and internal control structure that is beneficial to your business and aims to assess its effectiveness regularly.
Plans of disaster recovery are critical for any business, and a key component of good governance.
Promote honest reporting
Reporting is a critical part of corporates. Governance should aim to set up seamless processes for audits and other financial reporting, to ensure transparency and accountability.
Provide appropriate information
Being transparent with stakeholders is quintessential. It can be accomplished by providing appropriate information at all times.
It includes declaring all transactions of parties involved as well as the interests of all the directors of the organization. If directors have any interests outside the organization, it influences their decision making.
This level of transparency promotes the confidence of stakeholders and lowers reputational risks.
Emphasize integrity
Integrity is not limited to honest reporting. An organization must encourage a sense of integrity in all actions, and ensure employees have sufficient incentives to put it into practice.
Wrapping up
Good governance is a cornerstone of success and development for a company. It is a work in progress and needs to be evaluated at all times, so an organization doesn't lose its way and forget its mission.
If you're looking for a better way to manage governance in your organization, take a look at GRC software by VComply.
The mention of the very word audit evokes panic for business owners and compliance officers. You might be surprised to know that auditing can become a painful experience even for the auditors. Tight audit budgets, number of policies to flick through, lack of cooperation from stakeholders can all cause auditors' obstacles.
We spoke to some internal auditors, and here are some of the major challenges they face:
If the organization you audit does not understand the importance and scope of the audit and does not provide you enough information, then it becomes difficult for you to complete the audit processes.
Make clear what the expectations are. Agreeing the terms of audit engagements is one of the requirements. It ensures a clear understanding and communication of the auditor's responsibilities and the duties of the management. As an auditor, you need to make your organization understand that you intend to identify risks and then help them make a remediation plan.
Hear what the leadership team and staff have to say. You need to understand what is working for them and what is not, and what do they want to improve in the organization. Ultimately, you need to suggest improvements to help them get what they want. Once you get their cooperation, they will share the evidence and data you need!
If you fail to define the audit scope, there are chances that audit conversations can spill outside the scope, and the audit can become vague. At the same time, if you find some critical findings during the audit, it's worth mentioning and exploring, even if it's beyond your audit work scope. The internal controls implemented to be compliant with standards like PCI DSS, NIST, GDPR, and SOX could be your primary focus.
The auditors' responsibility lies in finding out whether the defined requirements are met. Instead of looking for whom to accuse, the focus should on on remediation. However, it does not undermine that the auditor has to let go of finding on blatant fraud. The auditor as well as the management is responsible if a fraud is ignored unless proven otherwise. It may arise due to management override of internal controls. The auditor has to set aside all assumptions and apply professional skepticism when carrying out their audit. The appropriateness of journal entries will ensure that there are less chances of collusion. Segregation of duties should be in place. Any inappropriate or unusual activity should be flagged. Any provision or accounting estimates should be thoroughly checked for fraudulent intentions and biases. Hence, a retrospective review of management judgments and assumptions related to significant accounting estimates is important.
This article has tried to highlight major challenges that an auditor faces. The auditor's primary goal is to make the organization better. A good review process by the audit firm may also flag any additional areas as deficiencies in the process. Thus, ensuring robust internal controls and timely compliance shall help the company to emerge victorious in such scenarios. VComply is a robust compliance and audit management software that helps auditors analyze and report on audit findings.
In a world where efficiency is king, it comes as no surprise that the practice of workflow automation is as popular as it is. Every process has some form of workflow to go through, and these often include several manual tasks, which increase risk exposure due to their inherently error-prone nature. Workflow automation addresses this lack, working on a company-wide scale. For instance, as per data published by the Annuitas Group, marketing and process automation drew in a 417 % increase in revenue.
Considering the burdensome nature of the compliance process, it is clear that operating without automation is a risk, to begin with. But does automation scale as effectively when optimizing the compliance workflow? As a matter of fact, it does, and very elegantly too. Workflow automation for compliance works primary because it streamlines the flow of crucial information and key compliance responsibilities. With traditional compliance workflows, there is a lot of manual effort and input required from the compliance officer. Compliance oversight and coordination can also be challenging in such a system, but such complexities can be reduced with automation.
Another good example is the ability to adapt to new compliance norms. In a fast-paced, ever-changing market space, regulatory reforms can be an administrative nightmare for compliance officers. However, with the right tools, adapting to these new rules doesn't require a complete and expensive controls' overhaul. This is just one among the many benefits, and for more insight on this subject, read on.
Compliance officers have their work cut out for them no matter the industry the organization operates within. This is especially true for companies without any form of automation in place as this means that workflow processes are still reliant on manual input. Human error is among the primary risk factors to account for when dealing with any form of manual work.
This exposure only widens with complexity as employees start to seek workarounds and shortcuts in an attempt to provide quick solutions. As a result, this exposes the organization to some form of a regulatory violation. Workflow automation helps mitigate this risk as employees can only operate within set parameters, and these are designed to comply with internal policies. However, complex manual processes are just one among the many compliance breakpoints. Here are other common compliance problems areas that workflow automation can help optimize against.
Even though employees understand the importance of compliance responsibilities, they can forget or lose track of when and what needs to be done. So, it important that responsibilities need to entrusted to various stakeholders and provide a due date for completion. For example, an IT manager needs to submit a cybersecurity report. Compliance workflow automation makes creating, assigning, and monitoring compliance responsibilities easier. An automated tool can send reminders to stakeholders who are supposed to complete a responsibility. Automation can drastically improve compliance oversight, coordination, and collaboration.
A systemic problem plaguing many organizations is that information, often vital, is transmitted through less than secure channels such as email. Companies could face severe consequences if a document is seen by people who aren't authorized to view it. An efficient way to minimize exposure to this vulnerability would be to take control of document distribution with the help of automation. The company creates workflows with customized roles and employs automated document routing for maximum safety. Another solution is to have a workflow form that requests sensitive data and once uploaded, this data is automatically transferred to a unified document management program, such as SharePoint, and grants access only to those authorized.
Compliance norms vary based on the industry and there may be some especially strict rules to follow. This is a problem because not all tools are equipped for these unique requirements. Some software may not support necessary compliance frameworks, which can spell trouble since it might manual controls. Automation helps this by enabling the design of flexible workflows to ensure that any complex processes required by regulation aren't sidelined.
Businesses have to manage and transmit large volumes of data via documents on a daily basis. Generally, organizations use some form of database or a cloud service to store and interact with this data. Unfortunately, this can cause inconvenience as many such technologies don't allow you to track these documents' movement.
Another issue is tracking down the data shared within these systems for the purposes of removal. This is a near impossible task as information is shared across various platforms. A solution helps automate the otherwise tedious process of creating the audit log or trail.
In any company, there is always some form of the hierarchy followed regarding how information flows. For instance, employees may be required to get certification or approval from specific executive staff and chasing these approvals can be quite tedious. This is especially relevant to larger organizations where a request may get lost in the email inbox or may get delayed for some other reason.
In such cases, it is quite common for employees to either skip this crucial step of approval or for administrators to issue quick approvals just to maintain pace. Any such occurrences are major compliance vulnerabilities that shouldn't exist and workflow automation can safeguard against them. These tools can be designed to ensure that information gets automatically routed to the designated recipient and follow-up alerts get issued in a timely manner.
Considering the consequences that come with being noncompliant, there are several reliable and ingenious ways to leverage workflow automation for compliance. Take a look at the options that all companies have at their disposal.
A robust compliance management or a GRC management tool can help companies automate compliance processes' overall management. Since no two companies are the same, internal policies and controls will vary and these tools can be used to design the automated workflows as needed. Some of the best ways to use this tool are to:
Succeeding at workflow automation for compliance does rely on software being used. Not only should it have the certification, but it should also be equipped to operate within the applicable compliance framework. The VComply GRC software suite meets all these requirements and goes further to offer integrated risk assessment and management programs. Armed with this tool, you can empower your compliance teams to work optimally and prioritize compliance as they should. For more information, contact us online.
Gartner research shows that only the better-prepared enterprise firms developed contingency plans much before situations worsened in the wake of the unprecedented Coronavirus pandemic. With obvious management and operational risks, and additional cybersecurity risks (there was a 273% rise in cyber attacks in Q1 alone), risk management has become essential for enterprises to both survive and thrive.
What is Risk Management?
A decade ago, risk management meant property insurance, malpractice insurance or derivative instruments. However, modern businesses have more diverse risks. In the present day, Risk Management is a business strategy that designs a framework for Management of Risks to Reputation, Operations, Legal Management, Human Resources Management (HRM), Security and overall Governance. It involves active management of risks and making the Plan of Action available to stakeholders. If your organization has finally decided to invest in an Risk Management software, here are the questions that you need answers to before taking the next step.
A Risk Management software is a long-term investment, so make sure it is worthwhile by getting concrete answers to the following questions.
1. What are your organization's compliance and risk management requirements?
Evaluate these key aspects and rank them in order of priority along with other unique concerns.
Make sure you take current and potential future regulatory standards into account and ensure that your chosen Risk Management software can evolve accordingly.
2. What is the risk management process of the software?
Once you have determined your specific requirements, evaluate the software's entire risk management process and check if it aligns with your organization's existing procedures. If your organization doesn't have an adequate risk resolution database, you should ideally look for risk lifecycle management as a key process. Features such as real-time risk management and active monitoring are a must.
3. Do its features align with your organization's objectives?
Making a list of non-compromizable features before selecting an Risk Management software would be helpful. For example, if yours is a small organization where teams are new to risk management, a risk workshop feature would be essential. You need to ensure that the software's pace and wavelength are in sync with your organization's pace and wavelength.
4. Can it be integrated with existing software?
Look for a system that can smoothly integrate with your ERP, HR, eCommerce, Accounting, point of sale, and other software. An Integrated Risk Management software can help you ensure that management is not carried out in silos and avoided in any department.
5. Is it a cloud-based or an on-premise-house software?
While it makes more sense for compliance-heavy industries such as pharma and finance, a tech startup might find a cloud solution more feasible because of its scalability and fewer resource requirements. Cloud solutions can free you from maintenance tasks, providing better scope to focus on core business strategies.
6. Does it have a mechanism to involve stakeholders?
Internal stakeholders need to be given their rightful say in risk management in the age of inclusion instead of limiting it to top management or a specific team. Choose a tool that allows you to evaluate risks with co-workers and collaborate and communicate well.
7. Does it have active monitoring features?
Risks, especially cybersecurity-related, can strike at any moment. It is crucial to have a good monitoring system that continuously evaluates all controls to mitigate any approaching risk better.
8. What is the software company's customer service like?
The quality of customer service is as important as the quality of the Risk Management software. Opt for a service that is available 24x7, has highly-skilled support specialists on board, and has a wide knowledge base to guide you.
In conclusion…
A Risk Management software is indispensable in this day and age, and choosing the right one help your team be more effective.
VComply offers a complete compliance management solution to help you streamline everyday compliance processes with a centrally managed, cloud-hosted system.
In a highly competitive environment that thrives on doing anything and everything it takes to succeed, ethics are a key system used to govern business operations. Business ethics, by definition, is a system of beliefs that serves to guide a business organization and the individuals within that organization. These largely revolve around the behaviors, decisions, and values of all involved, and are sometimes incorporated into regulatory norms.
For most businesses, some laws dictate ethical protocol as well, some of which commonly include:
It is interesting to note that the attributes and factors that qualify as business ethics are now vastly different from those of the past. Naturally, businesses now operate on a much larger scale and leverage more advanced technologies and media. As such, there are standards both unspoken and known that should be followed for optimal business operation. More to the point, companies and organizations with a defined ethical protocol are often known to be more successful.
This is proven by the fact that companies on the World’s Most Ethical Companies list were found to outperform the U.S. Large Cap Index by a significant 13.5% for a 5-year period. In short, good ethics translates into good business and it is a no-brainer that it benefits businesses to invest in a well-defined ethics program. For more insight on what this entails and the consequences of ignoring business ethics, take a look at these pointers.
There are 3 main areas of ethics, and all have a role to play in any organization. A lack of any, and in any form, exposes the entire company to risk or non-compliance. The first, and arguably most important, are the ethics in leadership. For any business ethics program to successfully become a part of its culture, the senior management has to be proactively involved and must be seen doing so.
With senior management instilling ethics, other leaders at various levels are able to transmit the message forward effectively. Moreover, when the higher-ups lead by example, a long-lasting ethics culture is created, promoting beneficial operations.
Some of the benefits of establishing ethics in leadership include:
The second area of ethics deals with employee ethics. Employees are known to benefit from a well-designed business ethics program greatly. For instance, business ethics can guide employees and help them make better business decisions, quicker. In addition to this, employee ethics also:
Additionally, when employees are part of businesses that operate by maintaining a high standard for ethics, they are more likely to improve their ability to do their job more effectively. This all goes back to how good ethics makes for good business.
The third area to note are industry-specific ethics. These are trickier to navigate as they vary with industry and country. For instance, an energy company will have to employ a very strict and clearly defined environment ethics program to ensure that it can continue to operate as needed. Any ethical oversights or mistakes are likely to draw in the public's wrath and the numerous regulatory bodies. On the other hand, there are companies, like Google, Amazon or other e-commerce platforms, that don’t have a direct impact on the environment. These are bound by ethics related to customer security and data privacy. In fact, ethics in marketing is a hot topic within this sector as it involves selling user data for marketing gain.
Considering that ethics promote employees to conduct their work with integrity, it is clear that every company needs one. However, it is important to consider the deeper role and significance of such a program. As per the U.S. Department of Commerce, any ethics program that is deployed must first relate to all business functions. This aids seamless integration of the program across the various departments, after which businesses can focus on maximizing its impact.
In order to do so, it is crucial that an ethics program be designed to meet set goals. As per Gartner, a global research and advisory firm, an ethics program should:
Business ethics are important because they facilitate operating with integrity. They also promote all the benefits mentioned previously, catering directly to business longevity and sustainable employment. However, besides these reasons, business ethics also offer the benefit of increased profitability. Because operating within ethical norms boosts a business’ reputation, there is data that suggests stakeholders and investors are now investing differently. Investors are actively seeking out companies that operate ethically as it is arguably the smart choice. Companies that are known to disregard ethics are being sidelined, and investors are more reluctant to buy in or invest.
When any business chooses to operate outside ethical norms, it is actively choosing to squander the benefits of being ethical. In essence, the company has increased exposure, which brews a negative culture that will almost certainly spiral into the illegal. Some of the more common risks of operating unethically include:
Considering the risks associated with operating unethically, it comes as no surprise that companies are actively investing in business ethics programs. However, in today’s ever-changing regulatory environment, establishing ethical practice can’t be achieved in just one sitting.
Companies will now require specialized tools to manage such programs, adapt them for newer technology and update them, as needed, without incurring massive overheads. The VComply GRC suite offers such a solution and helps companies handle risks efficiently and effectively. With just a single program, your company can adopt and enforce risk programs seamlessly, to ensure that your business ethics are always a priority. To know more, contact us online.
We know that good governance is the culmination of robust internal controls. Risk management specialists and compliance officers always speak about implementing internal controls. What exactly is the definition of internal controls?
The federal security law, Section 13(b) of the Securities Exchange Act of 1934 provides a clear definition of internal controls interns of accounting and bookkeeping:
The act states that:
(1) All transactions should be conducted only in accordance with management's general or specific authorization
(2) Transactions are recorded as necessary (I) for the preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements (3) and for keeping the accountability of assets
(3) Access to assets should be done only by management's authorization
(4) Perform recorded accountability of assets with existing assets at reasonable intervals
This definition provides only a partial view of the scope for internal controls, which is also only accounting and bookkeeping perspective. Actually, in business, the scope of the term internal control is much more wide. Any measure or process you adopt to achieve the organization's operational, financial, and compliance objectives can be referred as controls. These could include policies or procedures that are preventive, detective, corrective, directive, or corroborative in nature. There would be no way to track the performance of compliance obligations or financial reporting in the absence of controls. It makes it difficult for the management to make fully informed financial decisions.
An entire internal control system helps the organizations establish an environment that ensures that the company is doing its business according to the rules and regulations. Regular audits are conducted to calculate the risks arising out of lack of internal controls or to test the effectiveness of controls.
The following are the basic features required for a robust internal control system:
Once the leaders encourage integrity through their actions, employees automatically follow them. It sets the overall value system of the organization. It can be continuously imbibed in the minds of the employee through written materials like handbooks and manuals. However, management should also follow the policies to ensure successful implementation of the policies and procedures.
An organization's ability to recruit and retain competent personnel indicates management's intent to properly record accounting transactions and compliance obligations. In addition, the retention of employees increases the comparability of financial records from year to year. Furthermore, an auditor's confidence in the underlying accounting records increases as he observes the reliability of the organization's personnel. This in turn reduces an auditor's assessment of the risk of a material misstatement in the entity's financial statements.
One can bifurcate a task into a series of small tasks by segregating it between various individuals. Segregation of responsibilities is intended to prevent unwarranted fraud and error. It is important to have an effective SOD policy to ensure the efficiency of the relevant internal control. This reduces the risk of errors, mistakes and misappropriations. It helps the company separate various related functions to ensure that a single individual is not in charge of an important task.
Documentation is an important component of any internal control. Maintaining appropriate records enables management of records like storing, safeguarding, and destroying tangible or electronic records. Using a GRC solution that seamlessly integrate various applications like Google Drive with the platform helps maintaining and managing . A backup of all the data ensures there is no data loss in case of power failure or there are no employee creates fake transactions. It also acts a legal proof during litigation.
Many safeguards prevent unauthorized access of company assets. They can be physical e.g. locks or intangible e.g. – passwords and pins . Irrespective of the methods, they are an important feature of the company's internal control plan. Documents such as blank checks, company letterhead and signature stamps are items that require safeguarding. One may commonly overlook this.
Thus, to ensure good governance and compliance, a company should have effective internal controls in place. VComply is a leading GRC platform that helps meet the demands of compliance professionals by helping them perform risk assessment and implement controls. It comes with built-in compliance frameworks that helps you automate the implementation of compliance controls.
Every organization faces certain types of risks in business. Any factor that threatens an organization's ability to achieve its goal is considered a business risk. The major categories of risks to consider are: strategic risks, compliance risks, financial risks, and operational risks. Another important way to categorize risk is based on the source of the risk and see whether they are internal or external risks.
If your risks are not managed proactively, they can severely affect the success of your business. You can respond to risks based on the priority of the risks.
The strategies to respond to risks can be one of the following:
Accepting risks involves identifying and analyzing risks and bringing these risks to stakeholders' attention so that everyone involved is aware of the risks and their consequences. The most common reason for accepting a risk is that the cost of mitigation options might outweigh the benefit.
One of the options to do with risk to avoid it. If the risk poses unwanted consequences, the organization chooses to avoid the risk. Not letting workers work in a construction site in bad weather is one example of avoiding the risk.
Another strategy to deal with risks is to transfer the risk or a part of the risk to a third-party. A conventional means to transfer risk is to outsource some services to a third-party. Outsourcing the non-core functions such as payroll, recruitment services to an expert agency is a typical example.
Organizations can mitigate unavoidable risks. Businesses use this tactic most often in risk management. Risk mitigation involves implementing controls to reduce the risk exposure or the chances of the risk occurring. It will help reduce its adverse impact on the organization.
How do you overcome these risks and lead your company to success? Consider implementing a risk management plan!
A risk management plan is a well-crafted document that details how to deal with risks facing organizations and actions that should be taken to tackle these risks.
Coming up with a risk management plan consists of the following steps:
The first step is identifying the potential risks and adding them to a risk register. All the risks-small or big must be noted distinctively. You need to involve all of your stakeholders in the risk identification process so that if any of them have faced any risks in similar projects, they can help identify them.
At this stage, you need to analyze the risks in terms of their likelihood and severity. What is the frequency of these risks occurring, and what could be the impact of these risks on business. You can use a risk assessment matrix to score it visually.
This becomes easy if you have a well-defined risk appetite statement. You can begin to answer questions such as:
Once you identified and assessed your risks, you can treat the risks by utilizing your resources optimally. Start implementing controls to treat high priority risks so that they are no longer be a threat to your organization.
A good risk management plan offers several benefits. It helps companies identify potential risks and make plans to avoid them or treat them as they pop up. It helps in improving operational efficiency and boosts the confidence of the organization.
While risks are an inherent part of every business, having a well written risk management plan helps minimize the impact of certain risks, while acknowledging and accepting others. VComply provides an effective way for businesses to track and mitigate risks. VComply helps manage and automate the risk management processes such as risk assessment and risk treatment. The best risk mitigation strategies involve maintaining a risk register, regular reporting, teamwork, and planning.
