The push for better business practices has reached a dramatic fervor over the last few years in the wake of the financial crisis and the many scandals which have come to light as a result of it. In order to survive the many regulations being implemented to promote more transparent business practices, as well as the recent increase in enforcement, companies have found a greater need than ever for the development of their own well-developed corporate governance programs. However, designing and enacting such procedures is far easier said than done. To help aid companies in this process, here are the first five out of ten necessary compliance elements as defined by the United States Federal Sentencing Guidelines.
1. Put the Program in Writing
The first necessary step in the implementation of any compliance program is the planning and development phase. Here, companies will need to begin designing and writing out a series of policies and procedures which will guide the program once it has gone into effect. These procedures will need to outline what methods the company plans on using to preempt, detect, and investigate fraudulent activity and criminal misconduct.
2. Board and Executive Support
Before any such program can be implemented with any degree of effectiveness, companies will first need to incorporate their executives and board of directors into the program by training these individuals on the issue and having them make a declaration of the importance and their support of this program to instill a stronger sense of urgency as it is disseminated throughout the rest of the organization.
3. Allocate Responsibilities
A team will also need to be developed to handle such issues. From the early development stages onward, it is important that an organization have the right people to see through the implementation and upkeep of this program. These individuals will need to be highly qualified and well-trained in the handling of corporate governance matters, and can either be pulled from within the company’s preexisting employee base or hired on from outside.
4. Ongoing Commitment
One of the points at which many of these programs fall through is in the ongoing dedication to their upkeep and maintenance. Far too many companies view the development of their compliance programs as a one-time ordeal only to be revisited every now and then. This is not how a proper compliance works. At the core of such a program is a risk management strategy designed to safeguard the organization from any unnecessary threats, both internal and external, which may harm the company. Such strategies, however, cannot be left neglected, but must be continuously maintained to account for new and changing regulations, as well as all the other potential dangers that may arise.
5. Good Hiring Practices
Every company’s most valuable resource, the one that it all relies upon most heavily in order to succeed, is its employees. This dependence is no less true when it comes to proper corporate governance as it falls upon a company’s employees and their dedication to values and ethics, to ensure that such a program does not fail. This will mean applying new techniques in the hiring and interview process to ensure that candidates possess a similar code of ethics to that of the organization.
Find the next five compliance program guidelines in the second half of this article.
Published by Conselium Executive Search, the global leader in compliance search.
