Forming a strategic approach towards achieving any business goal is a must. Whether it is budgeting, sales strategy, marketing plans or even compliance risk management, it is imperative that a business aligns its processes and functions with objectives to meet those goals.
Compliance risk management is another function of a business that needs to be in sync with the business objectives as it ensures sustainable growth and operational effectiveness. Today, we are highlighting the ways of how to align compliance risk management with your business’ objectives. So, keep reading if you are trying to incorporate this strategic approach into your organisation.
Step 1: Clearly Define Business Objectives and Compliance Risks
To align compliance risk management with business objectives, it is crucial to have a clear understanding of both. Start by defining your business objectives in specific, measurable, achievable, relevant and time-bound (SMART) terms.
Example: The objective of your business is to expand into international markets within the next two years, it’s essential to identify the compliance risks associated with entering new jurisdictions, such as legal and regulatory requirements, cultural differences, data privacy concerns and so on.
Step 2: Integrate Compliance into All Processes and Verticals
Implanting compliance into your day-to-day business processes is essential for alignment. Identify key touchpoints where compliance risks may arise and mitigate those risks with appropriate controls.
Example: If your business is trying to improve customer data protection, you can align compliance by implementing data encryption, access controls and regular audits as part of your customer onboarding and data management processes.
Step 3: Foster a Compliance Culture
Creating a compliance-focused culture within your organisation is crucial for effective compliance risk management. This involves promoting awareness, training and communication about compliance risks and expectations throughout the company.
Example: To encourage ethical practices, your business can provide regular compliance training sessions, recognise and reward employees who demonstrate ethical behaviour, etc.
Step 4: Establish Key Performance Indicators (KPIs)
Developing relevant KPIs helps measure the effectiveness of compliance risk management in relation to business objectives. These indicators can be both quantitative and qualitative. Furthermore, they should align with your organisation’s goals.
Example: Your business is targeting to minimise financial fraud, you can track KPIs such as the number of fraud incidents detected, the time taken to investigate and resolve them, the percentage of employees who have completed anti-fraud training and so on, as an effective compliance risk management strategy.
Step 5: Monitor and Continuously Improve
Regular monitoring and evaluation of compliance efforts are essential to ensure ongoing alignment with business objectives. Conduct periodic risk assessments, internal audits and compliance reviews to identify gaps or improvement areas. Use the findings to update and adapt your compliance strategies to changing business objectives.
Example: In case your business objective shifts to expanding into a highly regulated industry, you may need to adjust your compliance risk management practices to align with the new industry-specific requirements.
Besides the points and steps mentioned above, it is crucial to remember that alignment between compliance risk management and business objectives is an ongoing process. It needs to be regularly updated and made employees aware of. To automate and streamline the process, businesses can leverage compliance management software. D&B Onboard is one of the popular compliance risk management platforms in India that caters to all the compliance needs of a business. Check out Dun & Bradstreet’s official website to know more about the software.