Regulatory Compliance

All About Regulatory Compliance: What It Is and Why Is It Essential?

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In this fast-moving world, there have been various developments and discoveries that are now impossible to work without. Every organization has been developing and incorporating the multiple findings made. With the addition of new equipment and the incorporation of new technologies and strategies, it is vital to maintain specific laws, policies, and regulations to maintain stability, security, a practical and statistical approach. With the implication of such rules, policies/guidelines, and regulations, an order of uniformity and stability is maintained. Legal actions can be taken if any regulation or policy is violated and is the basic foundation of the organization. These rules and policies are known as regulatory compliance. Employees are required to adhere to and follow the policies and regulations stated. Every working sector has regulatory compliance, which is followed, and violating them can result in legal consequences.

What Is Regulatory Compliance (RC)?

Regulatory compliance is the organization’s adherence to the various laws, regulations, policies, guidelines, and other standards, which the government establishes. It accomplishes the regulation’s commitment to accounting, tax, judicial reporting, and other compliance factors. Regulatory compliance is set for every industry by the government and varies from country to country. It is essential for business employees and administrators to have the basic knowledge and the understanding of the laws and regulations and how they work and why they are crucial. Failing to abide by the laws and regulations, legal action can be taken against the individual.

Regulatory compliance management and auditing are usually expensive ventures. The organizations need to invest in fulfilling the compliance laws and conciliating the stakeholders to maintain the business process by turning a profit simultaneously. It is often confusing and complex as the organization has to imply various compliance requirements in every sector in the organization’s market. There has always been a dual verdict when it comes to regulation. Many individuals debate about it, stating that it should radically diminish the burden of the regulation. In contrast, the other half of individuals debate contradicting to them on how regulation is essential to maintain accurate and secure corporate behavior.

Importance of Regulatory Compliance (RC)

Regulatory compliance is considered to be an establishment of customer protection. It ensures that the organizations do not have misconduct that may harm society. Organizations that do not follow/imply regulatory compliance can be fined and face other legal consequences. RC plays a vital role in consumer-oriented industries such as Healthcare (HIPPA), financial (PCI-DSS, GLBA), food and beverage industry (HACCP), and federal agencies (FISMA). Few organizations preserve compliance data: the data associated with the organization or included in the law, which is used later for auditing purposes and to implement and validate compliances incorporating the latest updates. Every organization needs to integrate regulatory compliance as it also helps in the management of compliance data, like audit trails, data transfers, etc., more efficiently.  When the rules, policies, and procedures are not followed/complied by, it results in a compliance breach. Breaches can result from human or technical error, the misconception of the obligations, or can be done intentionally. Compliance breach often ruins the reputation of the organization or the brand, leading to a lot of damage concerning the financial aspects of the organizations. The problem is minimized by enforcing compliance training, which giver a clear outlook of why and how is regulatory compliance is essential and how to maintain it.

Implementation of Regulatory Compliance (RC)

It is important to ensure the accurate implementation of regulatory compliance in an organization. To have substantial regulatory compliance, it must have comprehensiveness, attention to detail, precise analytics of the data and requirements. This can be broadly classified into six steps:

  1. Identification of applicable acts, regulations, directives, standards:

    Knowing which laws are required based on the nature/sector of the organizations is essential to understand implement an accurate act/law which is up to date with the terms and conditions. Every law has a unique structure making it difficult to finalize the apt law and acts required for the organization.

  2. Identify acceptable requirements:

    Identify all the laws, regulations, and policies applicable/suitable for the organization’s operations. Compliances are expensive and time-consuming, and hence it is necessary to know and understand which regulations and their applicability are apt for the organization and its standards. Government issues guidance documents help the organization understand the requirements and how the government interprets them concerning various regulatory aspects.

  3. Monitor for changes:

    With the evolution of technologies, there are constant changes in the requirements that regularly need to be updated. It is essential to monitor all the documents thoroughly to identify if a change in regulation is required.

  4. Determining the applicability of the changes:

    Once a change is detected in applicable law, determining if the changes would comply and fit in perfectly concerning the organizations is important. If it is apt, it can be implemented, and the required training about the updated law should be given.

  5. Collaborating with the team and with experts:

    Once a change is determined as applicable, it is necessary to imply tasks to close the compliance gap which has been caused due to the change. The tasks should be defined and supported by references supporting it and must answer the five W’s:

    • Why should we have the change?
    • When should we have to change?
    • What should be changed?
    • Who is responsible for implementing the change?
    • Where should the change take place (sector of the organization)?
  1. Documentation of compliance reviews: It is essential and a must to maintain evidence of the compliance reviews. This evidence plays a vital role during audits and helps in a better understanding of the compliance regulations and their overdue course time.


Regulatory Compliance Training

It is essential to regularly conduct compliance training for the employees to create awareness about the regulations, laws, policies, standards, etc., which are implemented in their organization. Regulatory compliance training ensures that the employees know every policy’s necessity and abide by them to avoid legal consequences when policy or regulatory law is violated. This prevents poor conduct, bad interpersonal behavior and enables in gaining a good reputation. Regulatory compliance deals with the laws, legal directives, and the legislation stated by the government bodies, whereas corporate compliance deals with an organization’s internal compliance structure, which all the organization’s employees follow. It is very crucial to maintain and protect the organization over the long term.

Compliance training has various benefits, such as:

  • Employee engagement by building employee awareness: Employees who understand and abide by the organization’s compliance are more reliable and often promote a healthier environment.
  • Defines the policies and goals of an organization: Every organization defines its policies and plans to succeed. The policies help in maintaining a smooth and ordeal environment which, when violated, can lead to legal consequences, which helps the organization eliminate internal threats and risks.
  • Safer working environment: A virtuous and stable compliance policy enables and promotes a positive working behavior, making it simple yet effective and have good communication amongst the employees, making them feel well associated with the organizational values.

Regulatory compliance is a crucial and vital part of every organization. To maintain the regulatory compliances and retain them, organizations hire compliance specialists who have complete knowledge and help the organization by suggesting and making compliance-related decisions to achieve the desired goals. Organizations usually prefer a certified specialist, as compliance is ultimately a technical process. Organizations typically hire a CISO to handle the organization’s significant security aspects, including regulatory compliance implications.

One must be a trained and certified CISO to take over and handle compliance-related issues. Many certification courses are available, where one can take up to become a certified CISO. One such certification is EC-Council’s Certified Chief Information Security Officer (CCISO), which provides a comprehensive, in-depth course about the roles and responsibilities of a CISO. Various organizations widely accept EC-Council’s CISO certification as various federal organizations accredit it.






What are the different types of Regulatory Compliances?
The different types of regulatory compliances are:

  • Healthcare Accountability
  • Data protection/ information security
  • ISO compliance
  • Workplace harassment based on gender, race, color, and beliefs
  • Compliance with licensing, permits, and certifications


Read More: Regulatory Compliance: How To Stay On The Right Side Of The Law

What are the types of compliance risks?
Some of the common types of compliance risks are:

  1. Workplace health and safety
  2. Data management and protection
  3. Corruption
  4. Quality


Read More: What Is Compliance Risk Management? Why Do We Need It?

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