Maintaining Compliance Obligations in Highly Regulated Industries
Legal professionals and management teams in highly regulated industries – including financial services, health care, and manufacturing – must ensure that they are maintaining compliance with all applicable regulations. While federal and state regulations may seem onerous, these requirements are in place to protect consumers. As such, compliance is not optional, and non-compliance comes with potentially significant penalties and risks.
Maintaining compliance requires understanding the framework of rules to which the business is subject and taking steps to proactively address and mitigate risk. The following best practices may help your organization meet its compliance requirements, regardless of your industry:
- Designate a responsible party. Some industries mandate the appointment of a chief compliance officer, chief risk officer, or some similar position. Even if your industry does not require a designee for compliance purposes, naming someone and empowering them to manage your firm’s compliance program is a best practice.
- Formalize policies and procedures. Using applicable regulatory requirements as a guide, create policies and procedures for your organization, documenting which area or department of the company is responsible for carrying out each procedure. While you may have the opportunity to purchase ready-made policies and procedure manuals created for companies in your industry, it is important to tailor them to your company.
- Create a risk inventory. Look closely at each area of your company’s operations, including sales, marketing, product manufacturing (if applicable), distribution, finance, technology, etc. Identify areas that could potentially be sources of risk for the organization.
- Review controls. What measures do you have in place already to address potential risks? Is your company following its policies and procedures? Document your controls and evaluate their continued adequacy. Adjust risk mitigation efforts as needed. Periodic (i.e., annual or quarterly) reviews of controls may make sense in some industries, whereas others may benefit from more frequent reviews and updates.
- Train employees. Employees and contractors cannot comply with established policies and procedures if they do not understand what is required of them. Make sure your company’s initial and ongoing training and communications are designed to help workers meet both job requirements and compliance expectations.
Baer Reed offers a variety of business and legal services designed to support organizations in highly regulated industries maintain compliance controls and build efficiencies. Contact us today to discuss how our team can help.
- On July 2, 2020
- Back to post list