Effectively managing risk and maintaining compliance are essential elements of sustainable growth and a positive company culture. Without risk and compliance procedures in place, organisations may face reputational damage, experience a high employee turnover, and lose out on investment opportunities.
Some common compliance risks include:
- General Data Protection Regulation (GDPR) laws
- Internal employee bribery and corruption
- Third party fraud and corruption
- Compliance with laws across different states and countries
- Lack of mandatory employee training
- Lack of an internal whistleblowing/hotline reporting channels
On the rise: emerging compliance trends and social transparency
The number of legal regulations surrounding risk and compliance are on the rise, especially in recent years. This could be due, in part, to social trends influencing policy; No longer are government compliance regulations just about avoiding court penalties and staying out of trouble. More recently, areas such as whistleblowing hotlines, ESG, diversity, equity and inclusion, and GDPR compliance contribute more than ever towards a company’s goals, investment opportunities, employee sentiment, and reputational value.
Companies need to find methods that resonate – such as setting up marketing campaigns or providing regular company updates on their website – to make it clear to investors, potential new employees, and the public, what they are doing to go above and beyond being compliant with new laws. The approach companies take to compliance speaks volumes about the approach they take to running a business and doing the right thing for their employees and the public. Organisations therefore need to take social trends seriously. People want to work for companies that have an ethical culture and demonstrate their dedication to emerging compliance regulations and policies. Without social transparency and trust around a company’s intentions and actions, organisations could quickly find themselves at financial and social risk.
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The Changing Environment: Risk and Compliance After COVID-19
Due to the increase of hybrid and remote work, certain risks, such as fraud and cybersecurity attacks, are on the rise. As an example, according to a recent survey from the Association of Certified Fraud Examiners, in 2021, 51% of companies reported increased fraud. Embezzlement, bribery and corruption cases are also expected to increase over coming years, as the remote landscape increases the opportunity for misconduct.
To tackle the rising increase of remote/hybrid working risks, companies need to ensure employees have extra security measures in place on their work devices. The basics of which include moving away from consumer cloud storage, banning unencrypted storage devices, and requiring employees to regularly change their passwords. In addition, companies need to ensure all newly onboarded employees, and those working in compliance, risk and data departments, are provided with ongoing and frequent training programs, on topics such as GDPR, that can be completed from flexible locations. For employees working remotely, notifications about compliance training may get overlooked, so ongoing consistent communication is key to ensure training and attestation is complete for all employees.
Integrating Technology and Data for a Holistic View of Potential Risks
To stay on top of the changing risk landscape, organisations should use integrated systems and make full use of the advances in risk and compliance technology solutions. Cyberattack cases are on the rise, using increasingly advanced methods; therefore, the technology used by an organisation must be frequently updated in order to keep up. In addition, risk and compliance issues should not be addressed using disparate systems. Companies should investigate purchasing a singular technology platform that provides the company with a holistic view.
Data silos are a key issue that many organisations continue to face surrounding data handling and technology. Companies can only manage what they can measure, so the right people must have access to the data critical to risk and compliance performance. Risk and compliance have not traditionally been looked at as a holistic practice; there are HR risks, financial risks, operational risks, etc., all functioning on disconnected systems. However, this practice is beginning to change, as companies realise the importance of collapsing these silos, and approach risk and compliance in a more integrated fashion. In addition, by providing a transparent and complete view of company data, senior managers and board members can detect potential risks before they can occur.
How NAVEX Can Help
To learn more about how NAVEX can help you to stay compliant or track and mitigate potential risks and challenges, discover our NAVEX One RiskRate and PolicyTech solutions, or book a free demo to speak with one of our dedicated and knowledgeable sales team members.