Every organization faces the key requirement of adhering to government-set guidelines and regulations. These guidelines can sometimes be difficult to comprehend and/or implement. However, failure to follow the law can result in legal fines, legal disputes, disruption of business operations, and, ultimately, a complete business shutdown.
The need for compliance has tremendously increased in the 21st century. Governments are strictly regulating essential industries such as finance and healthcare, making regulatory compliance a fundamental business need.
This article will delve into the purpose of regulatory compliance, its various types, benefits, requirements, and compliance examples.
What Is the Meaning of Regulatory Compliance?
Regulatory compliance is the practice of conforming to the guidelines and laws set by higher authorities such as governments. Every country’s government sets specific rules and regulations for every industry. Business employees are required to have solid knowledge of these laws and work accordingly. Government agencies can conduct surprise worksite checks and any organization found breaking these laws can be severely penalized.
Regulatory compliance is often used synonymously with corporate compliance. However, the two concepts are slightly different. Corporate compliance refers to the adherence to internal organizational rules. The penalty charged for not complying with government set laws is much higher than that of company policies and rules.
Many companies rely on compliance training to ensure employees have legal awareness and work in a legally acceptable way.
Why Is Regulatory Compliance Important?
From a societal perspective, regulatory compliance establishes customer protection. It is used to ensure companies do not behave in a manner that harms society. For instance, any company breaching environmental regulations can be fined heavily and persecuted. Regulatory compliance is especially important in consumer-driven industries such as healthcare, finance, and banking. Regulatory compliance in healthcare refers to the patient diagnosis procedure, quality control, and cost to consumers. On the other hand, finance and banking directly deal with customer money, so the government sets rules to make sure banks and other financial institutions don’t engage in unfair practices.
From an organizational perspective, a regulation breach can create a permanent dent in business reputation, brand image, and brand loyalty. With social media and easy access to news, even a small regulatory breach can prove costly for firms. This is why investing in compliance training proves to be less expensive than the possible costs of lawbreaking.
Regulatory compliance is also crucial for top executives of businesses as they can be held personally accountable for any guideline breach. Hence, it can prove to be career-limiting. For these reasons, it is always advisable to stay on the right side of the law by strictly adhering to rules and laws.
Types of Regulatory Compliances
Regulatory compliance consists of several compliance audits, such as:
1. Healthcare accountability
Formally known as HIPAA in the U.S., this regulation ensures that consumer health data is protected and ensures safety against fraud. This is mainly applicable to the healthcare industry.
2. Data protection/information security
This is a universal regulation that applies to every industry. It ensures a fair data collection, processing, and storage process. It broadly implies the safe handling of data.
3. ISO compliance
ISO collaborates with over 160 countries to solve interoperability issues among equipment and practices.
4. Workplace harassment based on gender, race, color, and beliefs
This is also applicable universally.
5. Compliance with licensing, permits, and certifications
Businesses are expected to renew licenses and permits on time to avoid penalties and legal action.
Examples of Regulatory Compliance
Some examples of regulatory compliance include:
- EU Data Protection Act: Many companies struggle with data protection. Fraud and hacking have become common in the 21st century and hence it has become necessary for companies to hire cybersecurity specialists to protect information security
- US. Equal Employment Opportunity Commission: This organization ensures that there is no workplace discrimination by making sure people are not treated according to their gender, race, color, and sexual orientation. It ensures employer actions are not racially driven. Failure to comply with these laws can cause reputation loss and legal action from employees.
- US. Environmental Protection Agency: This especially applies to manufacturing firms that are strictly regulated for harmful emissions and adverse environmental impact. There is a government-set acceptable level of emissions, which companies are expected to adhere to.
What Are Regulatory Requirements?
Regulatory requirements refer to all the applicable statutory instruments, orders, codes of practices, and regulations in effect at a particular time. These requirements tend to differ from industry to industry.
The above list is by no means exhaustive. Staying on top of so many laws and maintaining regulatory standards can be difficult. This creates the need for compliance training.
How to Ensure Regulatory Compliance
Ensuring regulatory compliance should be the top priority of every businesses. Companies can ensure compliance by introducing compliance training. This involves the use of professional services to make sure employees have adequate knowledge about the regulations. Training can take place in the form of in-depth sessions or testing. Secondly, it is imperative to stay on top of regulatory changes to maintain compliance standards. Regulations have increased in recent years and are subject to frequent changes. Hence, companies have to regularly conduct compliance training. Hiring a certified compliance professional helps since he/she is likely to be aware of even the smallest changes in regulations.
Additionally, compliance must be constantly monitored. Employees can miss or forget the regulations and hence, it is necessary to frequently monitor compliance. Companies can publish handbooks that employees can refer to. This way, the employee is less likely to make mistakes. However, make sure the handbook is constantly updated.
How to Get a Job in Regulatory Compliance
Due to ballooning regulatory requirements, there has been an increase in demand for certified compliance professionals. Compliance specialists help regulated industries to adopt business practices that align with regulations. Since a job in regulatory compliance is technical, it is advisable to become certified first. This will not only improve your regulatory compliance job prospects, but would also improve credibility.
EC-Council’s CCISO program is the perfect course to enroll in to become certified. Led by top-level information security executives, CCISO doesn’t just focus on imparting technical knowledge. Rather, it gives equal weightage to the application of information security management principles. Candidates are tested on topics such as governance and risk management, security program management and operation, and information security core competencies. The CCISO program can be attended online or in-person. The flexibility and ease of applying make CCISO a pioneer in information security courses. So, are you looking to become the next top-level CISO? Apply today!