Strategic Start To The Year: Managing Upcoming Regulatory Change
The current regulatory environment is a quagmire of information, leaving compliance professionals grappling with unrelenting updates from multiple channels. Developing a robust strategy for managing upcoming regulatory changes that will roll in through out the year will help set your compliance efforts for success — and here is how.
Establish Your Regulatory DNA
With the new and existing regulations in constant flux, identifying the applicability of the ever-evolving legal requirements is becoming more difficult year after year — especially if managed manually. Often, compliance teams rely on various spreadsheets to track "Legal Requirement Obligations" or "Compliance Requirements," which are distributed among team members. However, this method poses significant challenges: it's susceptible to infrequent updates, vulnerable to human error, and results in multiple, often conflicting, sources of truth.
A more strategic and scalable solution for regulatory compliance starts with building your own law library. This centralized resource will become the vital backbone of your regulatory change management system, adeptly accommodating new amendments and updates. Essentially, your law library will be the heart of your compliance efforts, ensuring you navigate regulatory changes with ease and precision.
Here are the key steps in this process:
Identify applicable regulations;
Understand the requirements and associated risks;
Establish controls tied to risks;
Track changes to regulations to update risk and controls, as needed, to maintain compliance;
Collect compliance documentation;
Capture the compliance process in an auditable format;
Scan the horizon to anticipate future legislative changes by analyzing bills and enforcement actions.
Remember to include third-party relationships as well.
Conduct a Thorough Compliance Audit
Begin by evaluating the current compliance baseline of your organization. How effectively are you meeting the required standards in the jurisdictions you operate in?
Make sure to identify the weaknesses in your current compliance program as well — from security policies to risk management procedures. Look for compliance gaps and problem areas that pose a risk or negatively impact the organization. Check if your program needs to cover topics, such as:
Environment, Health, and Safety
IT Safety and Security
This holistic approach to compliance auditing will help fortify your organization against potential legal and regulatory challenges.
Establish and Maintain Policies and Procedures
After conducting the comprehensive audit mentioned earlier, the next crucial step is to establish and maintain policies and procedures that align with the identified compliance areas.
Policy and Regulation Alignment: Map your company's policies and procedures to the laws and regulations in your law library. Include legal entities, products, risks, and controls.
Responsive Policy Updates: Whenever a regulation changes, update impacted policies and procedures.
Evidence Collection and Policy Management: Implement an organized process for collecting evidence related to policy management. This should include tracking mechanisms to record when stakeholders have reviewed and acknowledged (signed off) the policies.
Stakeholder Coordination: Engage with relevant stakeholders during the evidence-collection process.
Evidence Review: Regularly review the collected evidence to ensure compliance and to assess the effectiveness of your policies and procedures.
Regulatory Compliance Training
This step is essential to ensure that everyone within your organization, from junior staff to senior management, is thoroughly informed about the latest policies and procedures. It's equally important that this awareness extends beyond your internal team to encompass your external stakeholders such as partners, vendors, and customers. By doing so, you create a unified front where everyone involved with your organization is on the same page regarding compliance. This not only minimizes the risk of non-compliance but also helps in building stronger, more transparent relationships with all parties involved, enhancing your overall business integrity and reputation.
As regulations change and new laws are introduced more frequently, you must continually stress-test your controls. And with today’s regulatory scrutiny, you need to be able to holistically demonstrate the following:
How you are adhering to country and region-specific regulations;
How you are evidencing good culture and conduct;
What monitoring mechanisms are set up for self-audit;
Show program maturity:
How you are improving from previous audits/audit findings;
How the controls are being strengthened (a weak control may not achieve compliance with current law/regulations).
External auditors are looking for a comprehensive way to see your compliance and control testing. If you struggle to demonstrate your processes holistically, the auditor will assume your compliance program is incomplete.
Incorporate Automation Tools
There is a lot on the line for risk and compliance officers, as it takes a lot of work to manage regulatory compliance holistically, often leaving teams overtaxed and lagging behind. This can jeopardize timely policy updates, especially if there is an auditor coming in, leading to hefty fines and bad press for the company.
Today’s automation tools have evolved from automating repetitive tasks to preemptive automation. The use of artificial intelligence (AI) in technology complements human expertise by adding efficiencies of scale and liberating time and resources for more high-value priorities.
While some solutions fulfill a very specific need within a compliance function (like providing regulatory alerts or risk management), there are more comprehensive options that cater to the entire regulatory intelligence process – tailored law library, regulatory change management, and compliance management.
Regology’s regulatory intelligence platform comprises both regulatory change management and compliance solutions, offering: