What is Compliance Risk?
A compliance risk is a risk to an organisation being exposed to legal penalties, financial forfeiture and material loss, resulting from its failure to act in accordance with industry laws, policies and regulations.
Organisations of all types and sizes are exposed to compliance risk, whether they are public or private entities, for-profit or nonprofit, state or federal.
An organisation’s failure to comply with laws and regulations relative to its industry can affect its revenue. This can lead to loss of reputation, business opportunities and valuation.
Examples of Compliance Risks
There are many types of compliance risks that organisations need to monitor because of the severity of the consequences and risks to health and safety if they were to be left unmonitored.
Managing these risks in line with industry laws avoids any serious legal action or large fines.
Breaches of privacy laws are a huge compliance risk.
If a company handles sensitive information, it is the company’s responsibility to take the appropriate measures to keep this information protected and safe from any privacy breaches.
Companies are at risk from potential viruses and malware that could cause a data breach, so it is important to be aware of this and take precautions to avoid this.
Corrupt or Illegal Practices
Legal compliance ensures that organisations and everyone that falls within that organisation are abiding by laws and regulations relative to their industry.
Commonly found compliance risks relating to this include fraud, theft, bribery and money laundering carried out by employees.
Environmental compliance risks relate to pollution and environmental damage caused by the company’s operations and procedures.
Examples of this can include the destruction of natural habitats, the use of harmful chemicals and hazardous waste being disposed of incorrectly.
Health and Safety
It is a legal obligation for companies and organisations to legally follow certain health and safety protocols.
There are certain agencies that monitor whether these health and safety protocols are being followed or not.
The U.S have the Occupational Safety and Health Administration (OSHA) and the U.S Food and Drug Administration (FDA) and Europe has the European Agency for Safety and Health at Work (EU-OSHA) and the European Medicines Agency (EMA).
Process risk is a failure to follow an established procedure or includes a deviation from standard procedures.
Companies or organisations must document certain procedures so that they can be reviewed for compliance. If an employee abuses the proper procedures it is considered a process risk.
Compliance Risks in Schools
The majority of the types of compliance risks listed above are also relevant to compliance in schools and educational establishments.
There are many risks present in educational establishments, these risks can include:
- Fire safety and fire exits
- Electrical safety
- Water hygiene
- Hazardous substances
- Gas safety
- Food hygiene
- Building work
- Weather and temperature
- Traffic management
- Building work
Schools will often have regular health and safety audits and a competent compliance management system to highlight and manage all of these risks and any other risks that should be monitored.
What is Compliance Risk Management?
Compliance risk management is the process of identifying and assessing any potential losses that may arise from an organisation’s noncompliance with laws and regulations both internally and externally.
Management practices are intended to help organisations maintain compliance with these regulations and laws
How to Manage Compliance Risks
Knowing how to manage compliance risks is essential for the health of your establishment and for any stakeholders surrounding that establishment.
Conduct Regular Risk Assessments
You can’t manage compliance risks if you aren’t aware of what the risks to your business or establishment actually are. Without a thoroughly carried out risk assessment, your policies and precautions will accomplish little if they are not addressing the right risks.
There is no standard one-size-fits-all approach to risk assessment. Different establishments each have their own compliance risks and issues associated with them.
Consider a Compliance Management Software
As compliance is seemingly getting more complicated, the need for more complex internal and external auditing measures is becoming much greater.
A compliance management software manages all compliance activities and has all the tools to ensure no compliance tasks are missed, no records or evidence of compliance is lost and compliance auditing and reporting is quick and simple.
Compliance management software is usually designed to be accessible to users of various IT comfort levels, staff do not need to be computer whizzes to understand the software.
Continuously Monitor Your Compliance Efforts
As your business is currently changing and evolving, your compliance efforts should also adapt and change to fit this. It would be a mistake to look at risk assessment and compliance management as a one-off thing.
You will only know if your policies and procedures are working effectively if you evaluate them regularly. A key benefit of having a compliance system is that it can give you access to all the data at a glance via handy dashboards and automatically generated reports.
Be Confident in Your Compliance
If you’re looking for compliance software for schools or a more general compliance management software, we have you covered to make sure you keep on top of important risks and compliance activities such as scheduled inspections, accident and incident reporting and first aid administration.
If you’d like to learn more about our software, you can either book a demo, or contact us directly for a no-obligation quote.