It may feel like an investment into creating a compliance culture that competes with more growth-orientated funding. However, growth without compliance lacks sustainability. Implementing a pro-active compliance strategy to align with governing bodies’ focus to address unmet needs of certain stakeholders in the market, can be used as a tool to gather insight, establish possibilities for evolutionary growth, and at the same time mitigating future risks.
THE UNDERPINNING NATURE OF COMPLIANCE
In essence, being compliant increases room for your business flexibility. Of course, nature and intensity vary during the numerous phases of your business and surely on your calendar during the year. However, meeting your business’s legal obligations is not only a requirement, as it relates to your business health, but it also contributes to your image and the safety and welfare of others. Compliance should go further than minimal data collection and reporting obligations, it should effectively address an identified market need and in turn, provide the business with a competitive advantage. The importance of compliance is more evident as issues become growingly complex when your business develops. You will have expanded responsibilities regarding your all stakeholders viz, including employees, suppliers, industry, customers, and shareholders. Ironically, making compliance your underpinning value stretches your scope of trade.
The most obvious consequence of compliance is that it decreases your risk of fines, penalties, work stoppages, lawsuits, or a shutdown of your business. The South African business environment is significantly governed by policy. We have strong labour laws that govern the employment relationship, B-BBEE legislation that directs procurement actions, the Company’s Act that drives the responsibilities of directors, etc. There is no free ride. Non-compliance is detrimental to trade in every way and in every situation. The only way to survive is to manage your business compliance with proper understanding and carefully selected navigation strategies.
APPETITE FOR BROADER ISSUES
We cannot remain naïve as citizens of South Africa, at least if you want your business to be regarded as relevant. Your ignorance will harm you. South Africa is a young democracy with a vibrant society. Unfortunately, our society suffers from a lack of several socio-economic basics. The social disparity and substantial economic inequality represent only two key issues. More paramount is the declining appetite for morality, as can be seen in the levels of corruption and gender-based violence. The question is: Can your business ignore these pressures? The answer is, No. You are being judged by your very own stakeholders. Saying and doing nothing speaks volumes. There is no room for such naivety in the South African business environment and its society. The question is not, do I participate or ignore, the question is, how best do I participate.
When you meet your legal obligations and participate in society’s pressing issues, you become a caring institution. Businesses who take a real interest in activities promoted by compliance governance will gain much more value from their investment than just the compliance score. The far-reaching value of being a preferred supplier, preferred employer, an influencer, and a brand who sincerely care about their compliance investments will have a sustainable effect on growth. There are various levels of image returns that a business can gain from this. However, the ability to produce substance remains crucial in the stockpiling of positive image returns as they can be wiped away at any moment. Can your business systematically produce the same results that will pass any compliance and substance test?
Many business compliance issues deal with luring and retaining stakeholders. Stakeholders include clients, suppliers, partners, etc. It goes without saying that people trust businesses that systematically produce acceptable compliance actions, services, and products. In the modern world, where information travels at the speed of light, you gain and/or lose stakeholders rapidly. Your retention activities are best serviced if they include compliance as a key factor.
PILLARS FOR A COMPLIANCE CULTURE
To build a foundation for a culture of proactive compliance, look to the following pillars:
- Start with leadership
- Align to a greater purpose
- Be interested in broader issues
- Align compliance with enterprise risk management
- Uplift and upskill
- Value ethical behaviour and act with integrity
- Learn from compliance mistakes
- Put Effective Technology in Place
- Strive to transform