What Compliance and Risk Management Means for Businesses in the 21st Century

There have been some attempts to stem the tide of regulatory burden on businesses, but there is no denying the long-term trend: governments will continue to impose more and more onerous laws on businesses for as long as they can get away with it.

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What Compliance and Risk Management Means for Businesses in the 21st Century

To combat this threat effectively, businesses must design comprehensive strategies that allow them to avoid financial fines while also reducing compliance costs.

But many businesses have not adapted to the new regulatory environment and are still relying on out-of-date ways to compliance, which puts them at danger of falling foul of regulatory requirements. Businesses must build sophisticated compliance and risk management systems if they are to thrive in today’s competitive environment. But, exactly, what do these terms mean and imply?

Can you tell me what the difference is between compliance and risk management?

It turns out that compliance management systems and risk management systems are not the same thing after all.

Compliance management is concerned with the development of procedures that allow businesses to adhere to the regulations, no matter how difficult or arbitrary the rules may be to follow. In order to comply with current regulatory requirements, businesses must create training and management systems to ensure that every aspect of the business operates in compliance.

Risk management is concerned with taking actions to control the uncertainties that arise as a result of new rules and dealing with government agencies that have the legal authority to levy fines and penalties. The process of designing methods that will undercut any regulatory case against a corporation and exonerate it from responsibility is therefore required.

As you might expect, you can’t establish a successful compliance management plan without first putting in place a solid risk management procedure, and vice versa – the two go hand in hand in terms of effectiveness.

An Evolutionary Approach to Compliance and Risk Management is Required.
Because of recent changes in the regulatory environment, several of the world’s most respected companies have dramatically altered their approach to risk management and compliance management. The reactive approach to compliance and risk management that was formerly sufficient is no longer sufficient. Regulatory threats must be addressed as soon as they are made known to businesses. It is critical to be audit-ready. Furthermore, it is no longer sufficient for compliance to be handled piecemeal — as is currently the case with the compliance department. It is essential that it is comprehensive and appropriate throughout the entire organisation.

As a result, the new paradigm is that compliance must be both intelligent and comprehensive, encompassing the entire organisation. For a company to succeed, a centralised plan orchestrated by senior management and implemented throughout the organisation is required. By adopting a consistent, company-wide protocol, businesses can decrease risk, increase customer satisfaction, and reduce shareholder losses as a result of regulatory fines and penalties.

The Importance of Implementing Enterprise-Wide Compliance and Risk Management Solutions
Making enterprise-wide compliance and risk management systems is more difficult than it appears at first. Whilst some businesses have the in-house competence to handle this, the vast majority do not. Because of this, it is critical that they seek professional services that can give them the frameworks that they can use to ensure long-term compliance and reduce risks in their organisations.

A uniform compliance framework contributes to the development of a compliance culture throughout an organisation. A combination of training, increased coordination between the many arms of the organisation, and professional risk management solutions can all assist businesses in navigating the complex regulatory landscape. Furthermore, it contributes to greater transparency, which in turn improves public relations.

JVR Consultancy has experts local to you that can help with all your Compliance and Risk Management needs – get in touch with us today. Please use the enquiry form, email us at info@jvrconsultancy.com or call on 01628 565256.

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JVR Consultancy was formed in the year 2008 and their head office is based in Windsor and Maidenhead. We noticed that there was a gap in the market, for companies who work in the construction, rail, utilities, oil and gas sector who were not fully supported in the way that they could be when it came to industry compliance and certification. That is why our highly experienced team of compliance consultants can serve these sectors by providing over 135 years of combined experience with all compliance needs. In short, you won’t find anyone else who cares as much, or who tries as hard as we do.

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