Does your business have a culture of compliance? If you answered, “I don't know!” or “What is a culture of compliance?” you should read on. 

What is a culture of compliance?

A culture of compliance is good business. It is an organization where team members, from the newest employee to the CEO, do the right thing even when nobody is watching. A culture of compliance is wired into the organization's DNA. It ensures that your business operates within the laws, regulations, and standards that apply to your industry. A culture of compliance can help you avoid legal issues, reputational damage, and financial penalties.

Testing your culture of compliance

Testing your company's compliance culture is crucial to ensure all employees adhere to the company's rules and regulations. Non-compliance is risky and can result in legal and financial consequences. Here are some tips for testing your culture of compliance:

• Question your team to assess their understanding of compliance: Conduct surveys or quizzes to test the employees' understanding of the compliance policies. This will help identify gaps in knowledge and allow for necessary adjustments to be made.
• Examine your organization's compliance metrics: Do you track compliance metrics such as the number of reported violations, compliance training attendance, and the time it takes to resolve compliance issues? These metrics can help identify any areas of concern and allow for corrective actions. If you do not have compliance metrics, this is a sign your compliance culture needs improvement.
• Encourage compliance reporting: Does your company have a way for employees to raise compliance concerns? Your company should encourage employees to report any violations or concerns they have. If your company does not have reported concerns or does not have a way for employees to report problems, your compliance culture may need improvement.
• Audit your compliance culture: Regular audits can help identify potential issues and ensure the company's policies and procedures are followed. It's essential to have an independent auditor conduct the audit to ensure impartiality.

By testing your company's culture of compliance, you can guarantee that the entire team operates within the confines of the law and avoid any potential legal and financial consequences.

What is the cost of non-compliance?

A non-compliant culture can cost your company in more ways than one. Not only can it lead to legal and financial penalties, but it can also damage your reputation and erode trust with customers, stakeholders, and employees. Here's an overview of the costs of a non-compliant culture. 

• Legal and Financial Penalties - Non-compliance with regulations can lead to fines, penalties, and legal fees that can be costly for your business. The top 15 highest non-compliance penalties range from $1.25 billion to $30.4 billion. In some cases, non-compliance can even lead to criminal charges and imprisonment for executives.  
• Reputational Damage - A non-compliant culture can damage your company's reputation and erode trust with customers and stakeholders. This can lead to losing business and difficulty attracting new customers or investors.
• Employee Turnover - A non-compliant culture can lead to high employee turnover rates, as employees may not want to work for a company that is not following regulations or ethical standards. This can be costly for your business, as replacing employees can be time-consuming and expensive.

By prioritizing compliance and creating a culture of ethics and integrity, you can avoid the costs of a non-compliant culture. 

How do I build a culture of compliance?

Building a culture of compliance takes time and effort, but it is essential for the long-term success of your business. By leading by example, training your employees, fostering open communication, implementing a compliance program, holding employees accountable, and regularly assessing compliance, you can build a culture of compliance that helps to ensure that your organization operates within the laws, regulations, and standards that apply to your industry. Here are some tips to assist you build a culture of compliance in your organization: 

• Lead by example: A culture of compliance starts with the leadership team. Ensure that your leaders set an example by following all regulations and standards. This can help to reinforce the importance of compliance throughout the organization.
• Train your employees: Ensure that all your employees know the regulations and standards that apply to your business. Please provide them with the necessary training to understand the importance of compliance and how to adhere to it.
• Foster open communication: Encourage open communication between employees and management. Employees should feel comfortable raising compliance concerns or issues without fear of retaliation.
• Implement a compliance program: This includes policies, procedures, and controls to ensure all employees adhere to regulations and standards. This program should be regularly reviewed and updated to remain effective.
• Hold employees accountable: Hold employees responsible for their actions. Ensure that non-compliance has consequences, such as disciplinary action or termination if necessary. This can help to reinforce the importance of compliance throughout the organization.
• Regularly assess compliance: Regularly evaluate your organization's compliance to ensure it remains effective. Identify any areas of non-compliance and take steps to address them promptly. 

Remember, compliance is not just a legal requirement – it's also good business practice. Contact the Dohrwardt Law Firm to learn more about how the firm can help you test and improve your culture of compliance.

The information provided is only for general information and is not meant to be legal advice.  Information on this website, including third-party links, may not include the most up-to-date information, so you should contact your attorney to discuss your particular matter. Third-party links are provided for convenience only and are not an endorsement by the Dohrwardt Law Firm.