By far, one of the worst mistakes large businesses make is to overlook the importance of product compliance management completely. For some reason, most companies just don’t seem to care and take into account the inherent risk (which, sometimes, can rank in the millions of euros) as a standard business expense. Product compliance officers are a company’s most important asset and line of defence against the occurrence of costly mistakes!
However, most compliance officers have a myriad of responsibilities and tasks all wrapped up into one: advisor, teacher, prosecutor, etc. And despite the pressure to get everything right every time, they too make mistakes that can have dire consequences. A solution, oftentimes, is investing in a good product compliance management system that will streamline all compliance operations and help mitigate regulatory risk. Such a compliance system will provide all the tools compliance officers need to do their job correctly and mistake-free.
Learning from our own mistakes is crucial for our growth but learning from the mistakes of others is often even more valuable. The following paragraphs provide insights and advice from highly successful product compliance officers in the Nordic region of Europe. Read below the most common mistakes made by compliance officers.
Having collaboration and coordination between various internal departments (e.g. Compliance, Product Development, Business, etc.) and with external partners is a formula for success. But the reality is often different, especially when it comes to knowing what’s happening within the compliance department. Compliance officers don’t run their ideas or needs by other supporting leaders and spend about 50% of their time doing tasks outside of their scope. As a result, in-house compliance is inefficient, and the compliance officers have unwittingly earned the reputation of “business inhibitors”.
Product compliance officers are overwhelmed with tasks and responsibilities, and often lack the time and resources to get done what needs to be done. But effective in-house compliance takes more than the bare minimum. Compliance officers should not be afraid to ask for what they need, whether that is a bigger compliance team or a management system for effective compliance.
All year round, businesses must comply with constantly changing industry standards, national laws and international regulations. And if a compliance officer is not aware of the changes in the applicable laws, regulations and standards, it could lead to regulatory repercussions. Compliance officers are “awarded” with a mammoth task of ensuring a compliant business environment. So, it’s important that they’re aware of the impact of a change in legislation so they can take immediate actions if compliance issues arise.
One of the biggest mistakes that compliance officers make is not to tell the story of their programs with metrics. Metrics help translate operational and regulatory requirements for the business context. They provide clarity on how things are going and whether any changes are required. A well-structured compliance report with KPIs and goals will provide business leaders with a better understanding of how the regulatory framework affects their organisation. As a result, they would be more willing to allocate additional resources to the compliance department or take specific actions.
Detecting and preventing small regulatory issues could help indicate a larger issue. A layoff here or a missing document back there may all seem nonthreatening. But depending on the context of each one, they could add up to a product regulatory misstep, or worse. Compliance officers must update the red flags regularly so that they don’t end up blindsided and unprepared. Using proper compliance tools to detect any potential risk areas of non-compliance will allow compliance managers to be always on top of their product compliance work.