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Why your company needs to give it importance
…To properly monitor the above, it is advisable to have a compliance officer, regardless of the company's size…
[/vc_column_text][us_separator size=”small”][vc_column_text]By Julio Aparicio | Partner, Lexincorp Central American Law Firm
Corporate compliance simply refers to how a company ensures it is up to date with all the requirements it is subject to by law. These range from keeping its corporate governance records, such as shareholder meetings, in order, to those related to health requirements, which have become even more relevant in these times.
Ensuring compliance with all regulations requires three basic things:
- Knowledge of the laws, regulations, and other standards to which the company in particular and the industry to which it belongs in general are subject.
- Establishment of a code of conduct to which all people associated with the business, from shareholders to employees, must adhere.
- Clear procedures and ongoing training at all levels to ensure compliance.
To adequately monitor the above, it is advisable to have a compliance officer, regardless of the company's size. This position should be able to work closely with the auditing body, establish staff hiring and training policies with human resources, and develop a code of conduct with the company owners that aligns with their unique vision for the business.
In addition, two general areas of action for these policies must be considered:
- Within the company: That is, the conduct that all stakeholders must have with the company's material and time resources. This involves how expense verification protocols are established, for example. In several highly successful companies, such as Netflix, employees are granted a high degree of discretion, not only over their work schedules, but also over the expenses they incur on behalf of the company. It seems counterintuitive, but the results indicate that the greater the trust granted, the better the employee response. Clearly, not everyone will be prepared for such freedom, but this is where verification procedures come into play, as well as the importance placed on performance.
- Outside the company: This refers to ethical or unethical conduct toward third parties. Many international companies have, within their own corporate compliance policies, a prohibition on doing business with companies that commit acts of corruption such as bribery or influence peddling. In the case of large loans granted by financial institutions, violating one of these prohibitions can lead to the loan being foreclosed.
As we can see, corporate compliance encompasses all aspects of a business's life, so it's vital to establish sound practices of adherence to legal regulations, as well as a code of ethics that guides the company's actions. A compliance officer who can work closely with the company's management and owners, as well as appropriate legal counsel to determine regulatory aspects, must be part of the strategy of any successful venture.
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