Regulatory compliance, and the problems associated with it, comes in many forms. The concept refers to a company’s duty to comply with the various regulations, laws and guidelines required in its industry.
Regulatory compliance is important because it is not just a gesture of goodwill towards a brand’s audience. It is a fundamental responsibility. If violated, it can result in fines, suspension of business operations, and worse.
In regulatory compliance, one of the keys to success is staying ahead of potential issues. Instead of waiting for problems to arise, savvy leaders look for ways to prevent them.
There are many proactive strategies for identifying and closing compliance gaps before they turn into costly problems. Each of these requires company time, finances and other resources. However, the regulatory nightmares they help avoid are worth it.
Below are several proven techniques, examples, and actionable steps to mitigate compliance risks before they become full-blown issues. They can ensure a company maintains seamless operations by proactively navigating the complex regulatory compliance landscape.
1. Establish robust internal controls
The standards companies use to manage their internal operations can go a long way in avoiding costly mistakes over time. Internal quality controls are also ground zero for healthy compliance. These internal 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 demonstrate clinical trial compliance with regulatory requirements. When a pharmaceutical organization acquires an asset, the TMF is part of this acquisition. Just in Time GCP, GCP and TMF compliance consultants, adds that a strong quality evidence master file not only documents study progress, but adds value to a brand. In fact, it provides the history of the good you are purchasing.
Good sponsor oversight with well-defined quality control processes, such as regular and ongoing review and maintenance of an up-to-date TMF, ensures both regulatory compliance and brand value. It demonstrates a company’s commitment to product integrity and regulatory compliance, whether through a TMF for a clinical trial, a GMP certification for a cosmetic product, or any similar set of company metrics.
Remember, each industry has its own requirements and regulations. For example, a healthcare provider must follow HIPAA (Health Insurance Portability and Accountability Act) laws, while a technology company must stay 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 understand what these priorities are for your brand and industry and then take steps to meet them internally.
2. Invest in continuous monitoring systems
Protecting a business from cyber threats has become a primary concern for 21st century businesses. With thousands of digital attacks occurring every day, IT security has become an important focus of regulatory compliance.
One of the biggest issues related to cybersecurity is the constant changes taking place in the digital business landscape. Cybercriminals regularly bypass existing security measures, and software is constantly adapted to deal with new threats.
One of the best ways to maintain compliance on the digital front is to establish continuous monitoring systems. It is a form of regulatory technology (regtech) that approaches cybersecurity through continuous security protocols that constantly protect against potential breaches.
CrowdStrike, an AI-powered cybersecurity company, explains that healthy continuous monitoring cannot simply keep a system protected from external threats. It can improve the visibility of digital activity within a company. This leads to faster diagnoses and accelerated response times.
They explain that this improves mean time to resolution rates, or “MTTR,” adding: “The sooner you catch errors, the sooner you can begin the root cause analysis and subsequent remediation process. In other words, you are reducing the mean time to resolution (MTTR).”
Continuous monitoring takes many forms. You can apply it to everything from enterprise infrastructure to network monitoring to individual applications. Consider the areas of your business prone to cyber threats and ensure you implement continuous monitoring systems to maintain compliance not only now but in the future.
3. Collaborate with third-party companies, agencies and consultants
The world was already moving towards remote work before the pandemic accelerated its adoption. Since then, many jobs have remained offsite and, in many cases, outsourced to contractors or freelancers.
The sudden explosion of AI as a workplace tool has further pushed this fragmentation and outsourcing of work. Leaders in every industry are rethinking their approach to employment, and for many, the answer is to outsource when internal teams and artificial intelligence fail to fill a skills gap.
One area where third-party solutions are helpful is compliance. Compliance issues often focus on specific areas of a company’s operations. For example, they are particularly relevant for a legal or IT team. Another area is finance and accounting.
Tracking income and expenses and reporting taxes correctly is a complicated business. Even with advanced technological tools and AI-powered platforms, human expertise is needed to ensure a company not only makes ends meet but maintains compliance over time.
CFO Hub highlights several benefits of accounting outsourcing, such as the fact that it is cost-effective, scalable, and time-efficient. The financial site also highlights that using qualified third-party accounting firms provides unique access to industry expertise.
The site adds: “Outsourcing your accounting to a professional team will help you reduce the risk of errors and fraud. Professional accounting firms usually have rigorous controls and procedures in place to ensure accurate financial reporting and regulatory compliance.”
If you want to maintain compliance in complex and problem-prone areas, such as IT or accounting, think twice before assigning them to your internal team. Involving a third-party agency, company or independent contractor can infuse your business with a degree of professional excellence that makes it much easier to stay current and compliant where it counts.
4. Hire smart and review often
Finally, it is important to consider long-term maintenance of compliance. Being proactive about rules and regulations is never a one-off challenge. It requires constant attention.
This starts with scheduling regular opportunities to conduct reviews. Of course, this starts with checking your business’ level of compliance over time. But you want to go further. Also establish times to review your compliance systems.
If you set up internal controls to ensure you follow GMP standards or maintain a meticulous TMF, those internal controls require maintenance. Or, if you install state-of-the-art 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 recruiting team at Cradlefin Consultants points out that the size of a company, the industry it operates in and the complexity of its operations can impact how often work system reviews are needed.
They recommend one to two years as a general rule, adding: “It is also recommended that any major changes within the organization (such as the implementation of new technologies) 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 above factors and evaluate when reviews should take place in your organization. Also consider any disruptions, such as adopting an AI tool or outsourcing a key responsibility.
Along with consistent reviews, invest in your leadership team. A management team should never get involved in compliance issues. Instead, they should help create a culture of compliance from the top down. This brings a fresh, authoritative vision to compliance efforts, while maintaining creative momentum as you move forward as a company.
Commit to respect AND creativity is a balancing act that few leaders really manage well. From CFOs to CEOs, CTOs to Chief Supply Chain Officers, ensure that every hire your company makes invests in the long-term compliance standards you are trying to establish for your brand.
Proactively address compliance as a business
From finance and legal to technology, manufacturing and supply chains, the need for compliance is everywhere today. The world is becoming more and 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 increases.
As rules and regulations continue to accumulate (and change regularly), it’s important that companies take steps to proactively address compliance issues before they turn into costly problems. Use the tips above to create a plan for ongoing compliance. Remember, the initial effort here and now will save you a lot of time- and resource-consuming headaches in the future.
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