Regulatory compliance is a major issue for companies wishing to expand internationally. Many businesses have been surprised to discover that the global business environment is highly regulated, contrary to their initial expectations. They compared this situation to navigating a complex maze. But do not panic ! In this article, I will give you some tips to help you easily navigate this regulatory maze.
As a lawyer specializing in the field for over 20 years, I have faced many international compliance challenges over the past 18 years. I also gained experience as a senior legal advisor in two multinational companies listed on stock exchanges in the United States and operating in more than 70 countries around the world.
It is now clear that companies with international ambitions must develop effective compliance programs to help executives, managers, professionals and other employees understand the laws and regulations applicable to their business activities, whether locally, in the United States or globally.
An effective compliance program should cover all aspects of the compliance process based on each organization’s unique risks. The owner of the compliance program should be clearly identified (for example, the audit committee) to ensure that it is prepared, formally disseminated, communicated throughout the organization and regularly reviewed.
There has been much discussion about the elements of an effective compliance program, but based on my experience developing and managing compliance programs for companies with over four thousand employees and contractors, as well as my involvement In the US Department of Justice’s investigation into a large European logistics company, I identified the following 5 essential elements for the successful implementation of a compliance program:
1. Written Policies and Procedures: Compliance policies and procedures must be written and accessible to all employees. They should be reviewed periodically based on the regulatory environment, possible violations and improvement of their implementation.
2. Communication: Compliance policies and procedures should be detailed and communicated to all employees and other stakeholders. It is important to provide notice of review and update policies and procedures regularly and ensure that all employees read them at regular intervals. The new employee onboarding process should also include the requirement to review compliance policies and procedures. It is also essential to consider cultural differences and understand local customs when communicating these documents.
3. Training: All staff members should undergo regular compliance training, especially employees on the front lines of regulatory compliance matters. Mastering these topics is one of the pillars of an effective compliance program. Compliance training must be tailored to each culture to be effective, particularly during implementation.
4. Monitoring and auditing: Compliance policies and procedures should be regularly evaluated for effectiveness. It may be tempting to focus on high-risk topics, but it is essential to review all topics because the level of risk may not impact potential exposure. A monitoring process can be built into the procedure to detect strengths and gaps. An audit should also be carried out at regular intervals to independently assess the effectiveness of policies and procedures.
5. Violations and disciplinary procedures: A procedure and environment conducive to reporting violations should be in place, without any consequences for unfounded reports. If a violation occurs, it is important to investigate, identify any deficiencies, and update policies and procedures as necessary. Records of any investigation and review must be adequately maintained. Appropriate disciplinary action must also be taken consistently to deter future violations of policies and procedures.
Regulatory compliance is now a key success factor for many organizations, as well as a determining factor in attracting investment, financing and access to key technologies, particularly for companies seeking to do business with US companies. or European. Developing and implementing an effective compliance program is an intangible investment that should ensure the sustainability of the company and give it a competitive advantage.