Compliance and its impact on organizational reputation
What is Compliance?
In general terms what is meant by compliance is to be in accordance and confirmation with a set of pre-defined and well established guidelines, specifications, policies and guidelines. It is something which is very prevalent in businesses to make sure that they are in accord with the industry as well as the government norms. As the regulatory and legal norms always keep on increasing and there has been an ever increasing demand for operational transparency, it has become extremely vital for the organizations to ensure proper compliance control in their organizational system. They have to be very vigilant and ensuring and maintaining of all the regulatory requirements with complete understanding.
How does Compliance Impact Organizational Reputation:
As this compliance of regulations and specifications has become such a major concern for the business organizations and especially their managements, they are moving towards using specialized compliance softwares and consultancies. Many organizations even go to the extent of forming a compliance department and appointing a chief compliance officer who takes care of the entire compliance risk as well as compliance audit. The various factors on which the audit is done are dependent on the industry of the organization, its type of ownership and its business. There are regulatory compliance training programs conducted by the compliance department so as to ensure absolute following of rules and orders.
Maintaining proper compliance standards is extremely important for an organization as it can extremely affect its reputation. In fact,non-compliance of regulations and policies can pose the biggest threat for a company’s reputation in the market. Even the biggest of the brands have lost their market value just because of their unethical behavior. Reputation of organizations can be said to be its biggest asset as without it businesses will cease to exist thus, failure of compliance today is said to be the leading source of reputation risk.
What if there is no Compliance in an Entity?
If the organizations fail to deliver their clients the required standards and the quality of products or adopt unethical means ad practices, it will hit them hard on exposure. These will tarnish their reputation and they will lose the confidence of the customers. A company that maintains all the set of given standards and delivers what has been promised by them and the industry is definite to grow by leaps and bounds in the upcoming future but those who are unable to perform as such always carry a Reputation risk and sooner or later have to pay for their misconducts. Hence, non-compliance in the business world today is totally unacceptable.