Coping with compliance: a compliance officer’s perspective
Over the last decade, compliance has become an important concern of companies engaged in shipping and trade. But what exactly is compliance? And how does a company create a business model that addresses its requirements and minimizes risk -- without impeding business? The answer is to create a program for integrating the new regulatory requirements into the daily operations of your business, then overseeing the new operations to ensure that all regulations are observed.
Compliance is a relatively loose term that encompasses many different areas. When one speaks of compliance, a company’s business ethics, code of conduct and interest in protecting the environment may come to mind. Other areas such as a business’s adherence to applicable national and international law, fair labor laws, laws protecting fair competition and trade in the market place, laws against corruption and bribery, and laws and regulations specific to the operation of the business are also part of the compliance landscape.
When creating or improving your current compliance program, it’s important to take a comprehensive, pervasive, and layered approach. A successful compliance program has:
- Executive management backing and support.
- Dedicated resources supervising, implementing, and driving the program.
- Defined processes and procedures that address all departments.
- Clearly outlined expectations, objectives, and tools available to employees.
- A dynamic approach, always looking to improve upon and proactively address any legal or regulatory requirements; and continuous auditing and training of employees’ day to day activities that must be compliant with governing regulations.
Complying with laws and regulations in day-to-day operations must begin at the executive level. Drafting mission statements and codes of conduct with an eye toward compliance is important, but the company’s leadership must understand, and stress, that everyone in the organization is responsible for maintaining the goals of its compliance program. For this reason, it’s imperative that management always adhere to compliance policies, being careful never to take actions that could raise doubts or suspicions as to their commitment. This is not just for the eyes of the staff, but for the message their behavior may send to any government oversight or investigative authority. This latter consideration could be a factor in mitigating a government sanction in the event of a potential regulatory violation.
There are instances when an organization developing a compliance program is best served by consultants with expertise in its specific business sector. When researching and interviewing consulting companies, it is essential to ensure they create a unique program tailored to the overall goals of the organization, rather than using an ‘off-the-shelf’ approach. They should analyze the current business processes, provide gap analysis, and help to develop a solution that fits the unique needs of the organization. However, using consultants is not a substitute for creating an internal compliance team. While consultants can lay the foundation and provide needed guidance, companies are ultimately responsible for taking control and managing their own compliance programs.
Another key element to success is the ability to integrate and improve upon the business processes in place. It is important to remember that all parts of an organization play a vital role in creating a successful program. The requirements outlined by the various laws and regulations should be clearly defined and analyzed to determine which departments are affected.
To properly assess and implement necessary procedures, the compliance officer(s) must investigate and understand the roles and responsibilities of each department. This helps determine what departments and areas are best suited to accomplish a given requirement. It’s important to note that the department affected by the risk or decision point is the one best suited to incorporate and accomplish the specific procedure.
This article was written by Jeika Prichard, Esq., Manager Compliance of DACHSER USA Air & Sea Logistics Inc.