Corporate compliance is important for every business. Any company that falls out of compliance loses its good standing status in that state. If that goes on for too long, the state has the authority to dissolve the business, so knowing what regulations to follow is crucial.
However, the corporate compliance basics involve more than just investing in services. That’s a big step, but just as important is a company implementing its own proactive corporate compliance strategy. Here’s the why and how:
What Is a Corporate Compliance Program?
Corporate compliance services can handle specific duties such as writing and submitting annual reports, helping to get foreign qualification status in other states, and even providing registered agents. However, there’s more to compliance than that alone. Depending on the business, some companies may need to adhere to additional operational, safety, and health standards. A service provider can’t maintain these corporate compliance basics; these strategies are something business owners must create and implement themselves.
For example, proper payroll management is financially crucial. While these services may help with filing appropriate payroll-related documents, the actual management of payroll stays within the company itself.
An important step is designating someone as the expert or “officer” of corporate compliance. Having someone on staff aware of the different financial, legal, or even health or safety requirements means there is a source of expertise on site. These professionals help guide and advise staff, rather than leaving these responsibilities up to various individuals across your business.
Once you have a corporate compliance officer, it’s time to do a risk assessment to see which areas should be monitored for falling out of compliance. These could be health, safety, or even operationally related areas, depending on the business and its industry.
Every business must implement standards and controls. For example, a hospitality business that hosts guests might need to implement onsite rules respecting privacy. This may include only posting images of guests online if guests have been asked and given consent.
The final and most important task is to train employees. This is the most essential basic because even if you and your corporate compliance officer know the regulations, employees are the ones who must observe them. Employees in payroll, for instance, must know the tax regulations when handling finances. Other managers must record the data required for annual reports. For additional aspects of business, such as health and safety in a restaurant, it falls to employees on the floor to execute your compliance strategies.