What is legal compliance and why is it essential for your business?

What is legal compliance and why is it essential for your business?

Many businesses are simply unaware that easily avoidable compliance failures can destroy a successful company in one day.

‘Meeting regulatory compliance’ describes an organisation ensuring that they are aware of, and take the necessary steps to comply with relevant laws and regulations for Quality, Environmental, Health & Safety, Security and Facilities Management.  Managing legal compliance is therefore critical for any organisation.

In its business sense, “compliance” refers to a company meeting its legal obligations. Businesses are often not fully aware of the specific legislation that applies to their company activities and unfortunately, this is not a defence in a court of law should things go wrong.

Understanding legal requirements can be time-consuming and expensive. Many companies sign up to online services, however, even this can be frustrating as the company still needs to interpret what is relevant and just as importantly, what is not.

The most obvious consequence of effective compliance is that it decreases the risk of fines, penalties, work stoppages, lawsuits or even a shutdown of the organisation.   Too many companies are so focused on day to day business that they ignore the growing need for a compliance management strategy. Another, lesser known consequence of effective compliance is that by effectively managing processes, organisations tend to save significantly on costs.

Failing to meet your legal obligations, can also be very costly. A recent survey* showed nearly 50% of the organisations are not aware of the cost of compliance. This points towards mass wastage of time and money.

This survey also found that the use of an integrated management software solution improved compliance management significantly, allowing business owners to focus on day-to-day operations.

So you need to change, but how?

Once the need for a regulatory change is identified, many organisations struggle to ensure that the change process is completed.  Regulatory change is often handled on a project basis, supported by spreadsheets and other such manual tools.  Such an approach is fraught with risk – things can slip through the cracks and evidencing results to key stakeholders, including regulators, senior management, and Boards of Directors, can prove to be difficult.

Organisations that adopt a regulatory change management system are better able to realise a range of benefits, including reduced compliance risk and improved communication with stakeholders. The time and resources freed up by a simpler, streamlined approach means that businesses can focus on enhancing shareholder value through improved analysis, more thoughtful reporting, and working directly with the organisation to improve strategic planning.

Icet solutions ltd are an Integrated Management Solutions provider working within Quality, Environmental, Health & Safety, Security and Facilities Management sectors offering an end to end compliance solution.

*Source:  NAVEX Global research