Corporate compliance applies to almost every business in one way or another, whether you’re head of a large company or a small business owner.
Compliance means adhering to a set of rules, such as a policy, standard, specification, or law. In some cases, compliance is voluntary. Organizations choose to pursue certifications for SOC (Service Organization Control) and ISO (International Standards Organization) to improve business operations and boost their competitive advantage.
In other cases, compliance is mandatory. Businesses must obey certain regulatory compliance obligations, such as minimum wage laws or environmental, health, and safety regulations. They must also comply with laws for how to handle payment cards, personally identifiable information, and other sensitive data.
A compliance management system helps an organization manage all its compliance obligations, and is essential in the modern business world. Non-compliance with laws and government regulations can result in significant legal disputes, penalties, and even criminal charges, plus reputation risks that might scare away customers, employees, and business partners.
Why Does Compliance Matter?
As your company grows, compliance will become critical in hiring, termination, employment discrimination, harassment, safety, wages, payroll, and benefits. Ultimately, corporate compliance promotes sound business standards, which leads to a positive working environment and a healthy culture.
Compliance matters because:
- It lowers the risk of possible fines, sanctions, labor strikes, lawsuits, or company closures.
- Safety and security measures help prevent injuries, fires, or evacuations of buildings that can result in downtime.
- Compliance with legal requirements and optional certifications instills trust among customers and boosts your competitive advantage.
- Employee retention increases when workers know that they are in a safe, professional, and equitable environment.
What Is Compliance in Business?
Compliance means that a company should have adequate policies and procedures in place to meet compliance requirements. In addition, an organization must have a precise record-keeping system to document those procedures and relevant audit trails.
Compliance relies upon strong corporate governance, which is the framework of rules, regulations, and company practices administered by senior leaders. More simply, corporate governance refers to how a business makes decisions. Organizations must investigate which laws and regulations apply to their business to assure accountability, fairness, and transparency with their stakeholders.
To further demonstrate what compliance means, let’s examine two regulatory standards that have a rather specific application but affect a wide range of companies.
What Is PCI-DSS?
Companies that store, process, or transmit payment cards or handle cardholder data must comply with PCI-DSS (Payment Card Industry Data Security Standard). PCI requirements apply to businesses regardless of the volume or value of credit card transactions they handle. The Payment Card Industry Security Standards Council (PCI SSC) enforces PCI compliance.
The standard defines requirements to guarantee the security of cardholder credit card data. It demands that merchants and other companies securely manage credit card data, reducing the likelihood that cardholders will have sensitive financial data stolen. If credit card information is not adequately protected, hackers can perpetrate identity theft – and the retailers ignoring PCI compliance might lose their credit card processing privileges.
What Is HIPAA?
HIPAA (Health Insurance Portability and Accountability Act) is a set of rules that define the lawful handling and disclosure of protected health information (PHI) and personally identifiable information (PII). HIPAA compliance is a vital part of a healthcare organization’s commitment to protecting the privacy, security, and integrity of patients’ sensitive data.
HIPAA applies to two types of organizations:
Covered Entities. This is an organization that collects, creates, or transfers PHI electronically. Healthcare organizations considered covered entities can include healthcare service providers, healthcare clearinghouses, and health insurance providers.
Business Associates. Business associates are any organization that has been contracted to perform services on behalf of a covered entity, such as billing agencies, testing facilities, law firms, and other organizations.
Do All Businesses Have to Worry About Compliance?
Yes. Compliance does not just apply to large enterprises. Small business owners might have fewer or different compliance obligations, but they must still comply with all applicable external and internal business requirements. Every company must investigate which laws and regulations apply to its own operations.
Businesses should designate a chief compliance officer accountable for managing compliance requirements. Larger companies may have a compliance department to keep track of the different business compliance requirements. This department will monitor all of a company’s compliance guidelines, corrective actions, and projects.
In addition, best practices suggest that a company should implement software with a database to automatically keep track of multiple compliance framework requirements and audit internal compliance performance.
Maintain Compliance with Reciprocity ZenComply
Developing a compliance program can take a significant amount of time and effort, especially if your company still relies on antiquated technologies and spreadsheets to manage regulatory requirements.
The compliance professionals at Reciprocity can assist you in developing your compliance risk management program and streamlining processes.
- Internal policies and procedures are revision-controlled and easy to find in the document repository.
- Common requirements can be mapped across several compliance frameworks to simplify evidence collection and reduce the workload on your team.
- Workflow management features offer easy tracking, automated reminders, and audit trails.
- Insightful reporting and dashboards provide visibility to gaps and high-risk areas.
ZenComply is an efficient solution for ongoing compliance efforts. It is a single source of truth that ensures your organization is always audit-ready.
Companies don’t have to worry about their compliance posture because ZenComply monitors it throughout the entire lifecycle. It automatically updates with the latest regulations and data protection requirements.
Schedule a demo and learn more about how ZenComply can help you implement compliance.
