It is something that should be second nature to companies, however, being law-abiding and ethical is not something that seems so straightforward in many industries. The topic of compliance is still in dispute, and it’s something that can bear repeating, why we should be compliant. Many corporations and smaller businesses have pressures to define their values and adhere to strict guidelines. So with this in mind, why are compliance rules so important?
To Avoid Regulatory and Criminal Proceedings
From a business perspective, being committed to compliance is not just something that should be done, but it is going to yield various strategic outcomes. When we operate with an ethical and compliant attitude, we are going to reap the benefits, but we will also make sure that we don’t run the risk of being punished. Many health and safety consultants are more than aware of the sanctions imposed on businesses that do not follow the rules and regulations.
There are many internal and external consequences that may be incurred. For example, in the realm of health and safety, one employee that hurts themselves on site could claim exorbitant damages which runs the business into the ground. The main purpose of compliance is to avoid any ineffective behavior and minimize risk. The reality of complying can cause major consternation in the rights because of the numerous rules that need to be followed, but this is why businesses should adopt policies and processes to comply.
One of the most prominent examples in recent years of companies not following the rules is the numerous cutting of corners by car manufacturers such as Volkswagen, where they had been using an illegal shutdown system to manipulate nitrogen oxide levels, which appeared to cut down on carbon emissions but was actually the opposite.
The Importance of Social and Cultural Responsibility
Ethics are such key components of rules and regulatory structures in the modern-day, it doesn’t just have an impact on the internal processes of the business, but the customer. It is crucial for businesses to not just comply with rules, but also adhere to certain moral values standard to their specific industry. This means that companies need to be socially responsible too.
Social responsibility is predefined by certain regulatory bodies, this is evidenced in industries such as chemicals and energy companies who do not operate with consideration of the environment. If they do not incorporate sustainability practices, they may find themselves sanctioned and criticized, which has a knock-on effect on their abilities to trade.
Social responsibility is a must, but it all begins with following the rules. Compliance is a very difficult thing to adhere to, especially for younger businesses that do not have all the finances. However, compliance can be a benefit to a business because it is, much like the business plan, a way to keep yourself on track. It’s not enough to make sure you are in compliance with health and safety procedures, but you should make sure that, for the sake of your business, your reputation, your efficiency, and your longevity, you follow a form of compliance and regulatory practice.