Compliance risk equates to integrity risk. All businesses and financial regulations are evolving. And, compliance regulations standardize the business practices so that organizations act fairly and ethically.
If your organization fails to comply with industry-related codes of conduct, internal policies, best practices, and laws, it poses damaging risk compliance threats. These will encompass financial loss, material loss, fines, and voided contracts. Besides these, your organization might lose future business opportunities and your standing and reputation.
Hence, in such a situation, compliance risk management comes into play. But, compliance and risk management can also be distinguished as two different tasks.
When you establish your business agendas, distinguishing risk management from compliance may not seem like an essential item. But, segregating compliance risk management can make all the difference between merely avoiding risk and actually creating tangible value.
Risk managers and leadership teams who understand how compliance and risk management differ and how the two can be brought together can impact. Their organization can thrive. But, if such teams do not exist in your organization, you can outsource compliance risk management services from us.
We, at TRC Corporate Consulting understand that compliance and risk management are closely aligned. If we manage compliance with established rules and regulations, we help protect your organization from numerous unique risks. On the other hand, our risk management services will protect your company from threats that could lead to non-compliance, which, in fact, is another risk.
In the end, both compliance and risk management will help your business to maintain its stability and integrity on many levels. In fact, your company can’t really have a robust risk management program without compliance. Hence, compliance risk management is a package deal. However, their differences are worth noting because compliance and risk management related activities deserve different approaches and execution tactics.
Non-compliance should not be undervalued as it can trigger expensive fines and penalties as well as damage to the reputation. However, it needs more of a box-checking approach to ensure that your business is obeying the prescribed governance risk and compliance rules and regulations. On the other hand, risk management should depend heavily on the analysis in order to avoid risks or determine which ones are worth taking.
Under compliance risk management, compliance has a prescriptive nature, whereas risk management has a predictive nature. This explains that the former is more tactical, and the latter is more strategic.
With compliance, your organization must adhere to rules and regulations which are already in place. However, risk management should be less reactive. Rather, it should be able to forecast the impact risks will have on your business. And, focus on spurring new and innovative processes that minimize risks or benefit from their upsides.
Compliance does have its upsides. However, conforming to governance risk and compliance rules and regulations does not equal to value-generating company propositions. It requires the long-lens approach of risk management.
The stopping point of compliance is usually with the verification that a rule has been followed to avoid risks. However, the best risk management can transform the evils associated with compliance into a winning proposition.
Compliance under compliance risk management is often driven by a siloed compliance department or siloed initiatives in various departments. And while these procedures certainly benefit from broad transparency, their survival is possible without it.
Impactful risk management programs cannot perform in isolation. Integrating departments, technology systems, and the process are necessary to determine the risks within your business. Also, it provides a fair idea of how they should be handled- whether it’s to avoid their implications or drive value from it.
Despite the distinctions between compliance and risk management, the ideal compliance risk management technology can actually address both.
It can first work as a compliance management system, helping the compliance professionals centralize all the information on administrative and other operational tasks. Further, it helps them comply with FCPA, ISO, IT requirements, NIST, Sarbanes-Oxley, and more. Apart from this, it can more specifically:
Serve as a depository for all known governance risk and compliance regulations, with change tracking and monitoring.
Create the connection between governance and the potentially impacted processes, people, and places.
Facilitate compliance attestation using PDFs to minimize effort and time for self-assessment.
Provide a full audit track, including participant copies of testimonies.
Maintain interface with other internal or external systems for relevant regulation updates.
Doing all of this addresses the prescriptive and tactical nature of compliance, but the technology can do so much more. It has the ability to consolidate compliance and risk information in one place, as well as produce the strongest of analytics. Also, an ideal compliance risk management technology enables predictive, strategic, and integrated risk management.
The compliance risk management can surface your relevant risk information from wherever it is hidden in your company. Then, it will analyze it with other internal and external data and normalize it securely. Further, you can easily answer vital business questions uncovering both threats and opportunities for your company. And, allow you to focus on areas where attention is most required. Conclusion
Eventually, the ideal compliance risk management services can serve the dual purpose of compliance and risk management programs because of its own dual purpose. It incorporates streamlining of administrative tasks while serving as an essential analytics skill.
In the end, it can be understood that compliance and risk management are distinct. Companies need to be careful not to lump the two together as one initiative with a single approach. However, understanding their connection and how to align the two is equally vital. It will help you to reap the benefits from compliance and risk management being in sync.
The governance, compliance and risk part of an organization’s function is more than just values, regulations, rules, and data. It is about exhibiting and verifying accomplishments and hurdles, even in the face of a risk predicament. And, we strive to help your organization sustain a solid foundation for future business goals.
Our professionals manage compliance and risk functions, while also explain the when, how, and why of the plan and implementation procedures to enable readiness for any threat or unwarranted situation.
At TRC Corporate Consulting, we have a robust compliance risk management strategy that helps turn your business risks into sustainable growth prospects and ensure work in the long-run. If your agenda is to attain a competitive lead, a superior brand image, and profitable financial returns. Contact us for more details!