Essential Components of a Compliance Management System

Banker Resource
June 10, 2013 — 1,844 views  
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An effective compliance management system is an essential part of a well-oiled and properly functioning corporation. A company and its managing committee spend a lot of time drafting the various policies, procedures, and their documentation in an effort to ensure that as many aspects of company integrity are covered. As a result, it is essential to ensure that the integrity of the company is not affected.

What It Comprises

There are a number of different elements for the effective working of a Compliance Management System. The grassroots of any Compliance Management System starts out in educating the employees of the organization about the various policies and procedures. If the employees are not well informed about the compliance system, they cannot be held completely responsible for the same. The compliance management system needs to be shared with the management as well as low-level workers within the company to the fullest effect.

A compliance management system also ensures that various policies and procedures are incorporated into various processes within the business. Due to the ever-changing landscape of many industries, a compliance management system also allows for regular updating of the charter that it follows. Additionally, taking actions and the various degrees of punishment need to be set down in the compliance management system.

Role Played By Board of Directors

Because of the role that they play in the running of a company, the board of directors is a primary cog in the working of the compliance management system. First and foremost, they should make the expectations they have of the staff absolutely clear to follow the compliance plan in place. They also need to ensure that the entire system is as clear as possible – without leaving anyone unsure of the policies and procedures. With the backing of the compliance management system, the board of directors also needs to ensure that the expected levels are being met by performing surprise and random compliance audits.

Components of a Compliance Program

An effective and well-planned compliance management system comprises of a number of different components. These aspects of the compliance program include policies and procedures being officially established and written down, training, monitoring compliance, as well as a system for consumer complaints. It is important to remember that simply having a compliance management system in place is not the be-all and end-all of the concept. The presence of a compliance management system is over-ridden by its effectiveness. Experts say that smaller companies need to be more alert and have regular audits because of how easy the system is usually manipulated as a result of it not usually being an official printed document.

In conclusion, it is important to have a compliance management system setup – but it only helps if there are regular checkups and audits done on the same. Having confusing policies and procedures does not help anyone and should be avoided at all costs. Training should be imparted on a regular basis while audits must be conducted even more regularly.

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