Compliance: building an effective system in the company

Russia’s involvement in the integration processes of the global economy has led to the active introduction of legal tools in the sphere of entrepreneurial activity in order to prevent risks.

In the Russian legal framework, compliance is an internal control mechanism related to ensuring compliance of an organization’s activities with legal requirements while creating mechanisms for identifying, analyzing and assessing potential risks.

The key role of the legal and compliance function is to focus on specific risk management objects, such as: compliance with legal and regulatory requirements, acceptable ethical behaviour, internal controls, information and technological security, sustainability and quality assurance.

The implementation of all functions of this line of defence is realised through the provision of advice and expert support, monitoring and escalation of identified risks primarily to management and the business to take operational measures aimed at minimising risks.

The implementation of a company’s compliance system may be conditioned by:

  • legal requirements
  • the decision of the organization itself

It is possible to develop a compliance control system based on:

  • International standards. ISO 19600 “Compliance management systems – Guidelines” standard of the International Standardization Organization contains recommendations on developing and building a system of compliance control in an organization.
  • National standards. These are Methodical Recommendations on Development and Implementation of Measures to Prevent and Combat Corruption by Organisations.

7 steps for introducing a compliance system:

  1. Determine which areas of the company’s business are at risk of violations (tax, antitrust, etc.).
  2. Develop a list of compliance measures to prevent identified violations.
  3. Develop internal documents on compliance control: regulations, procedures, etc.
  4. Include the necessary clauses in contracts with employees.
  5. Select responsible persons and entrust them with implementing and monitoring the measures taken.
  6. Provide systematic training in the areas of compliance control.
  7. Create a quick feedback loop – so that any person can report the risk of a violation in a timely manner.

Today, companies’ decisions to introduce and develop compliance programs are driven, among other things, by sanctions against Russia, compliance with antitrust laws, adaptation to pandemic conditions, etc. Measures are introduced both in relation to external factors and to manage internal processes.

In conclusion, it should be noted that any business entity may face compliance risks. Therefore, this form of internal control will minimise certain groups of risks inherent in the financial and economic activities of the company. In this case, the presented recommendations are aimed at building a competent system of compliance control in the organisation, which will have a positive impact both on financial results and on the business reputation of the company.

 

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