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4 Proactive Ways to Avoid Costly Compliance Issues Regulatory compliance — and issues associated with it — comes in many forms. The concept refers to a business’s duty to comply with the various regulations, laws, and guidelines required...

By Deanna Ritchie

entrepreneur daily

This story originally appeared on Due

Regulatory compliance — and issues associated with it — comes in many forms. The concept refers to a business’s duty to comply with the various regulations, laws, and guidelines required within their industry.

Regulatory compliance is important because it isn’t just a goodwill gesture to a brand’s audience. It is a key responsibility. When violated, it can result in fines, suspension of business activities, and worse.

In the realm of regulatory compliance, one of the keys to success is staying ahead of potential issues. Rather than waiting for problems to arise, savvy leaders look for ways to head them off.

There are many proactive strategies to identify and address compliance gaps before they escalate into costly issues. Each of these requires a company’s time, finances, and other resources. However, the regulatory nightmares that they help avoid make them well worth the effort.

Here are several proven techniques, examples, and actionable steps for mitigating compliance risks before they become full-blown issues. They can ensure a business maintains seamless operations by proactively navigating the complex landscape of regulatory compliance.

1. Set up robust internal controls

The standards companies use to manage their internal activities can go a long way in helping to avoid costly mistakes over time. Quality internal controls are also ground zero for healthy compliance. These in-house protocols define ethical responsibilities and maintain accountability in the workplace.

A good example of this in the Pharmaceutical industry is the importance of a quality TMF or Trial Master File. A quality TMF is important to demonstrating the compliance of the clinical trial with regulatory requirements.When a Pharma organization acquires an asset, the TMF is part of this acquisition. Just in Time GCP, consultants in GCP compliance and TMFs, adds that a robust quality trial master file not only documents the progress of the study, but it adds value to a brand. In fact, it provides the story of the asset you are purchasing.

Good sponsor oversight with well defined quality control processes, such as regular ongoing review and maintenance of an up to date TMF, ensures both regulatory compliance and brand value. It demonstrates a company’s commitment to integrity of product and regulatory compliance, whether that is through a TMF for a clinical trial, a GMP certification for a cosmetic product, or any similar set of business parameters.

Remember, each industry has its own requirements and regulations. For instance, a healthcare provider must follow HIPAA (Health Insurance Portability and Accountability Act) laws, while a tech company must be up-to-date on the latest GDPR (General Data Protection Regulation) requirements. As a business owner, it’s up to you and your team to figure out what these priorities are for your brand and industry and then take steps to meet them on an internal level.

2. Invest in continuous monitoring systems

Guarding a company from cyber threats has become a primary concern for 21st-century businesses. With thousands of digital attacks taking place every day, IT security has become a major focus of regulatory compliance.

One of the biggest issues with cybersecurity is the never-ending changes taking place across the digital business landscape. Cybercriminals are regularly working around existing safeguards, and software is constantly adapted to meet new threats.

One of the best ways to maintain compliance on the digital front is by setting up continuous monitoring systems. This is a form of regulatory technology (regtech) that approaches cybersecurity through rolling safety protocols that perpetually guard against a breach.

CrowdStrike, an AI-powered cybersecurity company, explains that healthy continuous monitoring can not just keep a system protected from external threats. It can improve visibility of digital activity across a company. This leads to faster diagnoses and accelerated response times.

They explain that this improves mean-time-to-resolution or “MTTR” rates, adding, “The sooner you spot errors, the earlier you can begin the root cause analysis and the subsequent remediation process. In other words, you are lowering the mean-time-to-resolution (MTTR).”

Continuous monitoring takes multiple forms. You can apply it to anything from company infrastructure and network monitoring right down to individual applications. Consider the areas of your company that are prone to cyber threats, and make sure you’re implementing continuous monitoring systems to maintain compliance not just now but in the future.

3. Work with third-party firms, agencies, and consultants

The world was already moving toward remote work before the pandemic accelerated its adoption. Since then, many jobs have remained off-site and, in many cases, outsourced to contractors or freelancers.

The sudden explosion of artificial intelligence as an applicable workplace tool has pushed this fractionalization and outsourcing of work even further. Leaders in every industry are rethinking their approach to employment, and for many, the answer is to outsource when internal teams and AI can’t fill a skill gap.

One area where third-party solutions are useful is with compliance. Compliance concerns often focus on specific areas of a business’s activities. For instance, they are particularly relevant to a legal or IT team. Another area is finance and accounting.

Tracking income and expenses and properly reporting taxes is a complicated activity. Even with advanced tech tools and AI-powered platforms, it requires human expertise to ensure a company is not only balancing its books but staying compliant over time.

CFO Hub points out several benefits that come from outsourcing accounting, such as the fact that it’s cost-effective, scalable, and time-efficient. The financial site also points out that utilizing qualified third-party accounting firms provides unique access to industry expertise.

The site adds, “Outsourcing accounting to a professional team will help you reduce the risk of errors and fraud. Professional accounting firms usually have strict controls and procedures in place to ensure accurate financial reporting and compliance with regulations.”

If you want to maintain compliance in complex, issue-prone areas, such as IT or accounting, think twice before assigning them to your internal team. Bringing in a third-party agency, firm, or independent contractor can infuse your operation with a degree of professional excellence that makes it much easier to stay up-to-date and compliant where it counts.

4. Hire smart and review often

Finally, it’s important to consider the long-term maintenance of your compliance. Being proactive with rules and regulations is never a one-time ordeal. It requires consistent attention.

This starts with planning regular opportunities to conduct reviews. Obviously, this starts with checking how compliant your business remains over time. But you want to go further. Set up times to review your compliance systems, too.

If you set up internal controls to make sure you follow GMP standards or maintain a meticulous TMF, those internal controls need upkeep. Or, if you install cutting-edge cybersecurity, make sure it’s up to date. If you work with a contractor to stay compliant, connect with them regularly.

Frequency is important here. The staffing and recruitment team at Cradlefin Consultants points out that the size of a business, the industry it operates in, and the complexity of its operations can all impact how often work system reviews are in order.

They recommend one to two years as a general rule, adding, “It is also recommended that any major changes within the organization (such as implementing new technology) should trigger a review sooner rather than later in order to assess whether these changes have had an impact on efficiency/effectiveness levels.”

With this in mind, review the factors above and evaluate when reviews should take place in your organization. Consider any disruptions, as well, such as adopting an AI tool or outsourcing a key responsibility.

Along with consistent reviews, invest in your leadership team. A C-suite should never get in the way of compliance concerns. On the contrary, they should help create a top-down culture of compliance. This brings a fresh, authoritative vision to compliance efforts while also maintaining creative momentum as you move forward as a company.

Engaging in compliance and creativity is a balancing act and one that few leaders can genuinely handle well. From CFOs to CEOs, CTOs to Chief Supply Chain Officers, make sure every hire your company makes invests in the long-term compliance standards you’re trying to establish for your brand.

Proactively Addressing Compliance as a Company

From finance and legal to tech, manufacturing, and supply chains, the need for compliance is everywhere these days. The world is only becoming more complex. As technology reaches its pervasive tentacles into every area of business and the global economy continues to bring everyone closer together, the pressure to stay compliant is mounting.

As the rules and regulations continue to pile up (and change on a regular basis), it’s important for businesses to take steps to proactively address compliance concerns before they turn into costly issues. Use the suggestions above to create a plan for ongoing compliance. Remember, the up-front effort in the here and now will save you plenty of time-consuming, resource-draining headaches in the future.

The post 4 Proactive Ways to Avoid Costly Compliance Issues appeared first on Due.

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