Regulatory compliance refers to the laws, regulations, guidelines and standards of a particular industry or area of operation that an organisation must adhere to. Whilst regulatory compliance differs from state to state and country to country, the essential goal is to ensure that businesses operate within the standards set in their particular industry, so that society as a whole benefits from their operations.
Why does regulatory compliance matter?
Regulatory compliance, particularly today with the growing importance of environmental, social and governance compliance standards, is significant for businesses large and small because any failures in compliance may lead to financial penalties or even lawsuits. Staying up to date with all the latest changes in the regulatory compliance landscape can be difficult at times, but is incredibly important for businesses wanting to adhere to the standards in their industry. Here are the top 3 reasons on why regulatory compliance matters.
- Corporate Reputation
An organisation’s adherence to rules and regulations signals its commitment to their industry and cements their reputation as an organisation with high ethical standards that takes its actions seriously. With more and more discussions being had around corporate sustainability and the idea of a corporations as “citizens”, an organisation’s compliance with regulatory standards can be seen as a way to enhance their corporate reputation and in this way attract new customers and retain existing ones. For example, showing clients SOC 1, SOC 2 and SOC 3 reports can help build trust between an organisation and its clients.
- Protection against threats
Keeping up to date with compliance standards can save an organisation from threats such as cyber security attacks or breaches. By investing in the skills needed to adhere to cyber security compliance standards, such as introducing a compliance officer to oversee business operations, an organisation can save itself any headaches which may arise in the event of a threat such as a cyber-attack. Such threats have the potential to ruin an organisation financially so ensuring that an organisation’s operations are in line with the latest rules and laws is essential to ensuring its protection.
- Efficiency in business operations
Due to the streamlined processes involved in regulatory compliance, such as submitting reports on a regular basis and conducting a business analysis to identify any bottlenecks in the business, an organisation will tend to operate in a more efficient manner over time. This helps to give an insight into the true state of the organisation and whether anything can be improved in its operations or strategies. This type of reporting and analysis can lead to an organisation reducing costs and adopting different strategies to increase revenue.
At Arnotts Technology Lawyers, we can provide tailored advice on the statutory and common law obligations applicable to your business. For a discussion about your regulatory compliance needs, do not hesitate to contact us today or call us on 1800 749 292.