All entrepreneurs should take steps aimed at ensuring that their businesses meet regulatory obligations such as ISO Compliance. Failure to do so puts you in the radar of regulatory agencies, and the path of legal troubles. Similarly, you could be missing out on business opportunities simply because your company isn’t compliant.
For your business to be considered compliant, it must conform with state and federal rules and regulations. Nonetheless, staying compliant is difficult, given that laws and regulations are varied and vast. They also get amended regularly. Here are some common compliance-related issues that you should know about.
Your Compliance Checklist Will Grow As Your Business Expands
As your business expands, its compliance obligations will equally grow. Upon registration, you were probably only required to have a business license and tax certificate. As you expand, the compliance issues will become more complex. For instance, you will have more responsibility towards your employees by complying with regulations on recruitment, remuneration, and workplace safety.
Compliance Proves That You’re Business Savvy
When your company meets its regulatory obligations, you prove to employees, vendors, clients, and government agencies that you are aware of laws that govern businesses in your industry. You can tout this on the company website and in marketing material for PR purposes.
For instance, when advertising for vacancies, you can tout the fact that your company is an equal opportunity employer. This will help you attract top talent. Compliant businesses also find it easy to attract clients and funding from investors, besides managing risks more professionally.
Privacy is a Key Component in Compliance
If there is a breach that discloses the private information of your employees or clients to the public, there are laws that allow them to seek legal redress. In the health industry, for instance, the Health Insurance Portability and Accountability Act (HIPAA) prohibits the release of patients’ health data without their consent.
Digital and Physical Security Policies Are Crucial to Regulatory Compliance
We are living at a time when data breaches are commonplace. Both digital and physical security policies play a significant role in your firm’s regulatory compliance efforts. As part of your data security policy, you should be specific about which employees can physically access particular facilities. This should also apply to vendors and guests.
As part of your data security policy, you must put in place measures for determining who is accessing server rooms or other places that house your company’s IT infrastructure. With such a policy in place, there will be accountability as far as handling data is concerned. As a result, data breaches will be minimized or eliminated altogether.
Corporate Disclosures are Obligatory
The Sarbanes-Oxley Act (SOX) was enacted to safeguard stakeholders and the public against fraudulent practices and accounting errors by businesses. The law is meant to improve the accuracy and validity of public disclosures by companies, thus enhancing corporate governance and accountability.
Your company needs to adhere to standards set by the SOX Act for it to be considered compliant. This includes compliance with the financial and IT-related provisions of the Act. Although the Act doesn’t explicitly state how companies should establish their set of business practices or store records, it offers guidance on which records ought to be stored, and for how long.
To comply with the SOX Act, businesses must save all records, including electronic messages and records for at least five years. Failure to comply with this regulation can attract a variety of noncompliant fines or incarceration, or both.
Employees Must Be Aware of Compliance Issues
Businesses are mandated to relay compliance issues that regulate their industry to employees. Often, regulatory compliance issues are complicated. As a result, employees may not consider them to be purposeful or relevant. If you want to stay compliant, your employees must be made aware of why compliance is essential. Similarly, they should be regularly trained to stay apprised with emerging compliance issues.
Compliance Improves Operational Safety
Many business owners tend to be apprehensive when it comes to compliance issues. These fears are unfounded given the fact that most rules and regulations are enacted to streamline rather than harm your business operations. For instance, rules regarding harassment and discrimination in the workplace help create a positive working environment, thus boosting productivity. This highlights the significance of meeting your legal and regulatory obligations.
Often, business owners assume that there are no benefits to compliance apart from avoiding hefty penalties and fines. This is a misconception because compliance opens up tons of opportunities for your business. By complying, you stay up-to-date on industry trends besides gaining the ability to improve standardization and business efficiency.