In the context of uncertainty caused by COVID-19, many companies are looking for new ways to operate, whether if it means internationalization to find new markets abroad or a complete review of the structure to adapt to the remote work. This implies a loss of control in the management of the company. The best way to prevent from poor performances is by implementing compliance.
During the pandemic, those companies with better compliance systems in force could adapt easily to the constant changing environment. Moreover, coronavirus has only accelerated the technological disruption companies were facing during the last years. The speed of technology constantly alters the way that consumers, industries or businesses operates and only those with better internal compliance will be able to adapt.
We will list below the reasons why compliance is essential to face the current constant changing environment.
- Working in a New Normal business world
Although it is unclear how the post-pandemic business environment will look like, companies must be prepared to adapt to a new normal.
In addition to the critical factor of how the company manages the crisis to cushion its impact, it is equally important to have compliance plans in place to deal with it. One of the main challenges for companies will be to identify the new threats from which they will have to protect themselves.
Companies will have to focus on their core business in order to recover and having the correct compliance control will prevent them to expensive waste of time.
- WAH revolution and compliance
Working at home has become the biggest change of the century in terms of employment. Having all employees working remotely is now a reality both for big and small companies. Companies had to adopt telecommuting from one day to another, forced by the pandemic.
Having the proper technological remote systems was a key factor to this adaptation, after nearly 12 moths, it is now compliance the key to guarantee the quality standards are maintained.
It is not just the technological structure that conditions a proper adaptation to telecommuting. It is also essential the cohesion of the system provided by a good system of compliance.
Working from home is a litmus test for the compliance skills of any company.
- All companies are for sale
All companies are for sale is an idea frequently associated with the IT sector, but now this will be extended to many other sectors.
With a business world moving faster, pushed by technology and the constant change of offer and demand, all companies must be on the marked for sale and many of them will be sold to survive.
Not all companies, depending on their volume and flexibility, will be able to adapt to the new normal, selling could be a safe way out that will prevent many of them from bankruptcy.
A due diligence would be compulsory to sell any business. Having the right compliance advisor will save the company many hours and money to proof the diligence and good practice of the entity.
- Your boss does not speak your language
Globalization and internationalisation are two of the tendencies that will not be affected by the Pandemic and will not be stopped by the virus.
We may not be able to travel but business continue to expand to new countries looking for new opportunities and enforced by technology.
You may be end up having your manager in Hamburg, the accounting team in India and the HR offices in central London, and reporting to the shareholders in China. A common language is compulsory to operate in this scenario and compliance is the new Esperanto language for business.
- Reputational damage cannot be rebuilt.
People want to interact with organizations that have a reputation for honest dealings. It takes years to build a good reputation and this can be lost very fast, by the incorrect performance of any of your employees.
If you are not trusted in the marketplace, clients are unlikely to work with you. On the other hand, if you are trusted, clients will give you sufficient credit. Leaders consistently rank reputational risk as their number one worry.
- Compliance helps define the culture of a company
A compliance function leads an organization to determine a set of values and ethical principles that guide the organization’s behaviour. It requires the organization to describe those values and ethics sufficiently so that team members understand them and will refer to them.
Having a strong compliance control in the company determinates and shapes the company culture by showing the employees the importance of a correct behaviour.
- Compliance is a behaviour guideline
When compliance is properly done, it increases efficiency and effectiveness because employees have been trained to know, intuitively, how to do their jobs and how to reason through ambiguous situations.
- Change and innovation are no longer an option
Innovate or die.
Companies that adopt change and innovation to their performance will not take a better piece of the cake, but will just survive. Change and innovation are no longer an option.
In a constant changing entity, it is compulsory to have a proper system of compliance to guarantee you still take the reins of the company.