Compliance in business is an essential part of demonstrating that your company acts responsibly and ethically, helping build trust with staff, partners and clients in an ever-changing competitive market.
Failure to meet compliance can have severe consequences on your business, causing your company to lose contracts and suffer financial losses.
But what is compliance in business, what legal requirements do you need to demonstrate, and how can you find another company’s compliance? You can learn it all in this post!
But before we start demystifying why compliance should be a vital part of your business operations, we must first ask:
What does compliance mean in business?
Business compliance is an effort to adhere to statutory and regulatory laws, rules, and standards that apply to a business.
Compliance processes require companies to regulate all areas of their operation with the same level of attention. This means observing laws on safety regulations for employees, environmental protection, accounting policies, financial reporting requirements, and more.
The goal of corporate legal compliance is to ensure that businesses are following industry-standard guidelines and protecting themselves from any legal or financial liability.
Why is compliance important?
Some may be asking themselves, ‘Why do we need compliance?’
The truth is that compliance for business should be at the forefront of any operation, and failure to do so can have dire consequences for the company – but more on that later on.
Businesses must be constantly up to date with specific legislation and regulations in order to be compliant, and will often find it necessary to hire outside firms for assistance.
Companies must also ensure that their employees are aware of their responsibilities when it comes to legal and regulatory compliance and that they are taking the necessary steps to ensure that their operations remain compliant.
This is because if a business fails to adhere to the regulations, laws and standards set out for them, it could lead to costly fines or other legal punishments. Therefore, it’s important for any company operating in an industry subject to specific laws and regulations to remain constantly vigilant.
Besides avoiding legal penalties, being compliant is also important for businesses in terms of their reputation. Some of the key benefits of compliance with the law are that businesses can build trust with customers and potential partners who know that they can rely on the company to act responsibly and ethically.
For example, demonstrating compliance in construction can help a company attract more customers and investors, gain rewarding government contracts, and become a more successful business in the long run.
Who is responsible for complying with the legislation and regulatory requirements?
Typically, a Compliance Officer is responsible for meeting compliance standards within a company.
The duties of a Compliance Officer can range from conducting risk assessments and implementing preventative measures to advising management and creating internal policies and procedures designed to limit legal liabilities.
The Compliance Officer will also be responsible for monitoring the company’s progress in meeting the compliance standards, as well as making sure that all laws and regulations are being followed by employees.
What are the legal requirements for a business?
There are many company compliance regulations and requirements that must be considered at all times.
The main areas of company compliance to consider are:
- Regulations set out by professional industry regulators
- General Data Protection Regulation (GDPR)
- Health and Safety for workers and visitors, including the HIPPA (Health Insurance Portability and Accountability Act)
- Finance regulations, such as HMRC, tax, payroll, PCI DSS and anti-money laundering regulations
- Employment Laws and Workers Rights
- Sector-specific permissions, licences and permits
- Third-party agreements and contracts
What are the risks of poor compliance?
Simply put, the consequences of non-compliance with laws, regulations and industry standards are not worth the risk.
Whether it’s a substantial fine of up to £18 million, a civil lawsuit or even imprisonment, demonstrating poor compliance can have severe effects on your business.
Failure to comply with the rules set out by the law and each respective industry’s governing bodies may also lead to damage to the company’s reputation and credibility in the eyes of customers, suppliers, investors and other stakeholders.
Additionally, in instances of non-compliance, companies cannot rely on business insurance to protect them.
In extreme cases, a company found to be in breach of compliance may even have its licence revoked, resulting in its closure.
Therefore, maintaining good compliance standards is essential for any business looking to succeed and remain competitive in the long run.
What does compliance in construction look like?
One industry where compliance is paramount is the construction industry.
Whether it’s to ensure the health and safety of workers and the public, or to gain lucrative government contracts, demonstrating compliance is key within this sector.
By showcasing relevant certificates, qualifications and safety records, construction companies can prove that they are compliant with all relevant laws and regulations, helping open doors to new opportunities and attracting a wealth of new customers.
Compliance can be seen as a badge of quality and reliability, as both customers and investors will have more trust in a company that openly demonstrates its commitment to following the law and best industry practices.
Failing to adhere to health and safety regulations can have a huge impact on those working in the sector – ranging from million-pound fines and even criminal charges.
For this reason, it’s essential for businesses operating in construction to be aware of the necessary legislation and requirements and demonstrate their compliance as best they can.
How to demonstrate company compliance
So, we’ve established the importance of company compliance, but how can you showcase to potential clients and partners that your business is compliant?
Or, perhaps you’re a buyer wondering how to review another company’s compliance.
With the Compliance Chain platform, businesses within the construction industry can demonstrate their compliance within the sector, helping to showcase transparency and improve trust.
Compliance Chain is a compliance management platform that can be used by buyers, subcontractors, Principal Contractors, Public Sector clients and more, with each tier of membership offering vital compliance information and evidence.
For example, Gold Members can use the platform to demonstrate their compliance with environmental management, equal opportunity, quality management and more with their accredited construction compliance certificate.
The platform also offers a comprehensive user dashboard, allowing users to easily monitor their insurances and certifications, and be prompted when any paperwork needs updating or renewed.
Using Compliance Chain can help businesses within construction build trust with partners that they are adhering to industry regulations, saving time and bringing new opportunities to your doorstep.
To discover more about how you can improve your company’s transparency with Compliance Chain, please contact our team or sign up for a gold membership today!
With over 6 years in the construction industry (specifically compliance within construction), Luke is responsible for managing and overseeing the functionality of Compliance Chain’s Supplier Solution.
