Compliance
Software

Understanding the environment (legal, contract, accepted practices, etc.) in which you operate is key to mitigating regulatory risks that could substantially impact the organisation. Compliance demands have extended across legislators and regulators, investors, customers, employees, and other stakeholders. Factoring regulatory compliance into the risk management strategy dramatically assists in reducing incidents of compliance failure and the resultant penalties, going a long way to solidifying director protection and increasing organisational durability.


Principle 13 of the King IV code (copyright Institute of Directors Southern Africa) states that the governing body should govern compliance with applicable laws and adopted non-binding rules, codes, and standards in a way that supports the organisation being ethical and a good corporate citizen.


Besides the most apparent reason to comply, namely, that it is the law and the risk of penalties, fines, imprisonment, and loss of operating license for failing to comply is high, complying with the requirements provides additional benefits to an organisation. Organisations that have practical compliance functions create a competitive advantage for themselves through:

• Enhanced client satisfaction and confidence. There is a direct link between high levels of client satisfaction and certainty for businesses that are perceived to be compliant,

• Management of reputational risk. A practical compliance function is vital in the monitoring and mitigation of reputational risk critical to the sustainability of any business,

• Enhanced investor confidence. Organisations that have a practical compliance function demonstrate transparency and business integrity, thus enhancing investor and stakeholder confidence,

• Enhanced access to capital and financial markets due to improved disclosure and investor confidence,

• Higher market value for the organisation from increased investor confidence,

• Better organisational performance resulting from ‘running a tight ship’ with good internal controls,

• Enhanced social and environmental standing. An effective compliance function demonstrates ‘good corporate citizenship’ necessary for the survival and growth of any organisation,

• The ability to operate in a global business environment. For an organisation to survive the accelerated dynamics of a worldwide market (‘village’), it requires a practical compliance function demonstrating good corporate governance.

Compliance is a crucial business function for all organisations. Keeping up with the regulatory landscape requires time and resources, but it is vital to remain compliant. Compliance means that employees and operations adhere to regulations and standards in a business. This is an essential function for ensuring that the company runs smoothly.

Compliance programs must be well-defined to ensure that they achieve their objectives. In addition, they should be aligned with the expectations of the organisation’s stakeholders. Whether the organisation is a non-profit or a large corporation, it is important to ensure the effectiveness of its compliance program. To this end, the Board of Directors should receive regular updates from the Chief Compliance Officer. The Board should also review the compliance program annually. The board should discuss the results and approve any changes that are necessary.


A compliance program should clearly define the organisation’s “why.” This “why” should be a set of values and ethical principles. The compliance function should help the organisation reach these principles by training employees and holding them accountable for their actions.
Compliance complexity and the consequences of non-compliance are increasing all the time. Without a structured approach enabled by specialised compliance management software, compliance is a daunting task, bordering on impossible.


The BarnOwl compliance module enables an organisation to document and manage its regulatory universe by identifying and monitoring compliance with the acts, regulations, and provisions at every level of the organisation. The BarnOwl compliance module supports and embeds best practices frameworks such as Generally Accepted Compliance Practice Framework (GACP). The BarnOwl compliance management software:

• Dramatically reduces the administrative burden of compliance,

• Enables an organisation to manage and keep up to date all acts, regulations, and provisions as they pertain to your organisation,

• Embeds a culture of compliance in your organisation with the automation of compliance checklists, control self-assessments, and ‘living’ action plans,

• Provides ongoing monitoring of your compliance environment with early warning notifications of non-compliance,

• Automates follow-up and monitoring of treatment action plans,

• Provides register/s for non-compliance issues, loss events, near misses, conflict of interest, gift register, etc.,

• Generates regulatory and management reporting,

• Limits director exposure through a formalised approach to risk and compliance management.

Pros


Allows businesses to:

• Integrated compliance requirements all in one place; up to date regulatory universe with latest acts and provisions (obligations) available in a centralised database

• Streamline the compliance process, save time, achieve better compliance

• Track and monitor compliance related provisions / obligations and remedial actions

• Automate compliance-related tasks such as online compliance checklists and action plans

• Minimise potential fines and / or penalties relating to non-compliance

• Provide director / accounting officer protection by demonstrating a formalised system

• Embed corporate governance culture by driving compliance ownership and accountability across the organisation

• Improve overall efficiency by identifying areas of improvement in compliance-related processes

• Provide insightful reporting to enable informed decision making regarding compliance-related matters

Cons


Some of the barriers to using compliance software include:

• The volume of compliance content can be overwhelming, however this is what is required to perform compliance effectively

• Compliance functions are intrusive and can result in information overload for the business

• Superficial tracking of compliance can be done in Excel.

• Compliance is a huge administrative burden and requires dedicated time and effort

• Compliance software together with 3rd party compliance content can be costly

• Ongoing cost of keeping acts up to date can be onerous and costly