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Protecting Stakeholders through Compliance Training
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Today’s regulatory landscape is highly dynamic. There’s a need for business owners and managers to take an informed approach when handling issues relating to compliance. Attuning your internal policies, rules, and regulations with industry-wide regulatory standards alone isn’t enough. Training stakeholders about compliance is critical to the success and sustainability of your business.
What Does Compliance Training Entail?
Before you even think about what compliance training is, you should first define stakeholders. Generally, these are people who can get affected by your organization’s actions, policies, and objectives. Stakeholders play a critical role in the day to day operations of your business. They include employees, vendors, customers, and government agencies.
Compliance training entails educating your employees, vendors, clients, and other stakeholders about laws and regulations that apply to their industry and job function. These laws and regulations are imposed to maintain safety standards at the workplace, to protect company and client data, and to encourage fair competition.
By implementing an effective stakeholder compliance training program, you will be able to prevent poor conduct, thus ensuring proper governance. Similarly, it will enable you to minimize business risks, maintain your organization’s reputation, and provide an excellent working environment for your employees.
Organizations that engage in stakeholder compliance training have these goals in mind:
- Detect and avoid stakeholder violations that can cause legal liability to the organization
- Creation of a respectful and hospitable workforce
- Paving the way for complete or partial defense in case stakeholder wrongdoing leads to disasters such as data breaches
- Value addition and giving the organization a competitive advantage.
Once you implement an effective compliance training program, stakeholders will familiarize themselves with your organization’s philosophies and operating procedures. They will also stay abreast of state and federal laws and regulations that apply to your industry.
Positive Impacts Of Stakeholder Training
Sometimes, business owners and managers think that compliance training isn’t that important. If you are unsure about how compliance protects stakeholders, you need to look at the repercussions of non-compliance.
Often, organizations perceive stakeholder compliance training as a “get-over-with” program. With such a mindset, it’s usually tricky to nurture the culture of compliance. It even becomes unsurprising when employees fail to engage in training or learn from it. Here’s how compliance training can benefit your organization.
It Creates Awareness
An effective compliance training program gives stakeholders a clear understanding of laws, standards, regulations, as well as their obligations. When you make such information easily available, you lessen the likelihood of lawsuits and penalties that typically result from non-compliance.
These penalties and fines can cripple your organization’s operations, especially if it’s a startup. Moreover, the reputation damage that arises from non-compliance can be costlier. In today’s digital world, the corporate scene is highly interconnected. Businesses hope to gain both trust and brand awareness. Non-compliance can lead to the loss of both. This puts you at the risk of losing your standing in the industry.
Keeps You Apprised with New Laws and Regulations
The easiest way of staying apprised with new laws and regulations is through regular compliance training. Through this, stakeholders will have the knowledge that they need to stay on top o any regulatory changes, thus minimizing the risk of non-compliance.
Since regulatory laws change overnight, businesses face the risk of violating new regulations if they fail to train stakeholders. Rather than wait for regulatory changes to catch up with you, it is imperative to implement a training approach that addresses emerging legal and regulatory changes.
Compliance Training Is a Risk Management Strategy
Risks are part and parcel of the entrepreneurial journey. Your compliance program should focus on enlightening stakeholders about threats that come with their positions in your organizations, and how they can manage them.
Undertaking compliance training in itself helps you manage reputational risks. Therefore, the program alone helps you build brand transparency and trust with your customers. Minimizing legal problems and avoiding hefty fines and penalties is essential to all organizations. Often, such occurrences arise due to failure to manage risks appropriately.
How to Run an Effective Compliance Training Program
If you are mandated with running your organization’s compliance risk program, you must first identify the compliance laws and regulations that the company ought to satisfy. After that, evaluate specific criteria that should be satisfied.
This will help you acquire content from reputable sources. The content that you use to train stakeholders should be based on regulations, policies, and legislation, which typically change over time. An audit helps you determine how effective your training program was.
The significance of stakeholder compliance training cannot be understated. By incorporating risk management in your stakeholder compliance training, you will prevent common business risks from becoming realities. In doing so, you will be protecting your staff, vendors, customers, and the business itself. Thanks to digital technology, it’s easier to train stakeholders as well as keep them apprised with emerging legal and regulatory obligations.
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"The only constant in life is change." – Heraclitus
Such is true for life, as it is for business. The entire ecosystem our organization operates in—our customers, competitors, suppliers, partners, the company itself, etc.—is constantly changing and evolving. Change can be driven by emerging technology, regulation, leadership change, crisis, changing consumer behavior, new business entrants, M&A activity, organizational restructuring, and so forth.
Thus, the understanding of, dealing with, and mastery of the Change Management process is one of the most critical capabilities for our organization to develop. Excellence in Change Management should be viewed as a source of Competitive Advantage.
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About Shane AvronShane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.
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