How to establish or refine corporate compliance programs

John Sherman

Regardless of company size or industry, remaining compliant with current laws and regulations is imperative. At the same time, it’s essential for employees to stay compliant with internal policies and rules. With both, an organization runs smoothly, safely, and effectively. The best way to protect your business is by adopting the right corporate compliance program, one specific to your type of operation.


Compliance programs cover a wide variety of topics. For instance, implementing machine guards as part of a manufacturing process, using a properly rated fire suppression system in an internet data center, installing a ventilation system in a restaurant, or as in the case of Medicaid, saving a minimum of $5 million a year under the Deficit Reduction Act of 2005 are all examples. Regardless of the situation, an effective program accomplishes multiple goals, including:

  • Operating in accordance with current laws and regulations
  • Meeting high professional and ethical standards
  • Maintaining a culture of integrity and honesty
  • Preventing abuse and fraud
  • Identifying compliance issues early on, followed by taking prompt corrective action
  • Developing employee and customer confidence and trust

What it comes down to is corporate compliance programs ensure your company and workers follow all applicable laws and regulations mandated by the government, along with ethical practices and standards established in-house. 

Consequences of being non-compliant

By not meeting all compliance guidelines, your company could be at significant risk. Perhaps the most critical concern is it changes the legal status, making your business vulnerable to government audits, hefty fines, lawsuits, and even failure. Following are a few examples of how a non-compliant issue could severely compromise your company.


Not paying your staff minimum wage plus required overtime pay would put you at risk of violating your state’s compliance laws. Once someone reports it, you could expect an audit and possible lawsuit, not to mention losing valued employees and damaging your company’s reputation.

Hiring practices

In recent years, the government has come down hard on businesses with unethical and even illegal hiring practices. As an example, you can’t discriminate a job interview or actually bringing someone onboard due to age, race, gender, sexual orientation, and so on. Make sure your HR Director is up-to-date by visiting the US Equal Employment Opportunity Commission’s website.

Proper licensing

For multiple businesses like law firms, hair salons, day spas, and automotive repair shops, staying compliant requires them to maintain all necessary business licenses and permits. For instance, a convenience store that sells alcohol must have a current license from the Alcohol and Tobacco Tax and Trade Bureau.

Workplace safety

One of your greatest responsibilities as a business owner is to provide your employees with a healthy and safe work environment. The great thing about compliance programs is they ensure everything is in order from the floor to the ceiling. Even one accident leading to an injury could prove catastrophic to your company. 

Protecting your investment

Often, the requirements to remain compliant are complex, which is why becoming educated and having the right leadership team in place is crucial. Thanks to compliance programs, which include training courses offered online through a reputable Management Learning System platform, you have a way to protect both your financial and legal standing.

Compliance programs are a formal solution based on current laws and regulations combined with your company’s policies, procedures, and actions. The ultimate goal is to prevent, detect, and fix issues. This type of program goes well beyond a standard “code-of-conduct” policy by focusing on specific risks within your organization and then addressing them by taking the appropriate measures. 

Even if you have a compliance program in place, it may not offer the maximum level of protection that you need. In fact, the wrong program could be wasting valuable time, money, and resources. Instead of a “hit and miss” system, meaning some things are compliant while others aren’t, you need to implement a comprehensive program. With that, your company leaders can detect all potential problems quickly. 

Developing or refining

Whether you need to develop a corporate compliance program for the first time or fine-tune an existing program, it’s essential that you keep it focused and simple. After all, your HR Director, Risk Management team, and corporate trainers need to communicate the details of the program to their staff in a way that’s easy to understand and adhere to. 

From day one of bringing a new employee onboard, your HR Director needs to have information prepared to ensure that person has what he or she needs to follow compliance laws, regulations, and policies. Again, during orientation and training, it is imperative your leaders provide the same information.

As for your current employees, they need the same details. Any time a compliance law, regulation, or policy changes, the respective department’s manager should pass down the information to every employee. If you receive a fine, get audited, or face a lawsuit, ignorance isn’t going to help. Fortunately, there’s an abundance of videos, podcasts, and articles available online that cover a broad range of compliance topics.

Every corporate compliance program worth adopting consists of specific core elements. Knowing what these are will help you develop or refine a program that protects you, your business, and your employees. The benefits of building a successful corporate compliance program far outweigh the risks. 

The program works to develop a work environment based on accountability, starting with the top executive level and moving down. A well-developed program also makes it easier to identify and address issues, document all pertinent information, and evaluate the efforts made.

Compliance manager

Have a credible Compliance Manager as part of your team. It’s this person’s responsibility to understand current laws, regulations, and policies, educate employees, detect potential risks, correct issues, and create detailed reporting. Overall, the Compliance Manager protects the company from fines, audits, lawsuits, and failure. This individual will lead the way in building compliance into your company’s operations.

Program scope

On a periodic basis or as compliance laws, regulations, and policies change, it’s critical to identify both internal and regulatory compliance needs. At the same time, the program scope should properly align with responsibilities across the organization. 


For some people, the only way they will open up about a potential problem is if they feel comfortable going to their direct manager. For that reason, provide your leadership team with training resources that help them improve communication and build relationships with their staff. You want your managers to have an “open door” policy so that employees feel safe to bring up even sensitive topics.


Unless there are distinct and clearly defined objectives, your employees will struggle to achieve the set goals. As part of your strategic planning process, make sure to include a list of well-defined objectives based on both internal and external mandates.

Risk assessment

Your HR Director, Compliance Manager, and L&D Manager all play a critical role when it comes to identifying risks and probabilities. As trusted leaders within your organization, they need to develop their knowledge, giving them a keen sense of what to look for, how to report it, and what corrective measures to take. These three positions, in particular, need a clear understanding of their roles in relation to compliance.

Cultural testing

Especially if you have a company with more than one location, it’s vital to provide training to ensure the culture matches across the board. In other words, your Compliance Manager might be on top of things at headquarters while at a remote site, non-compliant issues exist. This is a prime example of why education and training are crucial for all employees regardless of position or level of authority.

Internal auditing

The last thing you want is to receive notification from a state or federal entity advising your company is being audited due to a possible non-compliant issue. To avoid embarrassment, risk, and fine, develop an internal monitoring system into the corporate compliance program.


You also need a place within the program for keeping your leadership team abreast of results, changes, and other pertinent information. Cross-communication about internal and external matters is of significant importance when it comes to compliance.

Remember, maintaining compliance requires a joint effort by many different people within your organization. However, it starts with the people you put in positions of authority. For the program to work, it must contain the following core elements. Even one oversight, whether intentional or not, could bring your entire company crashing down.

  1. Designated Compliance Manager (and other members of your leadership team)
  2. Written policies and procedures
  3. Open lines of communication
  4. Effective education and training
  5. Internal monitoring and auditing
  6. Quick response using appropriate corrective action for any identified problem
  7. Enforce standards based on clear disciplinary guidelines

 As for the seventh core element, “enforce standards based on clear disciplinary guidelines,” you want your HR Director to work alongside your L&D Manager to create a set of internal policies and procedures. You need to provide this information to all new hires, as well as current employees. Your entire staff must understand the risks of being non-compliant and what their role is in reporting an issue. 

Not only does this give your staff better direction and expectations on what you expect from them, but it also helps them invest more in the company. In other words, understanding how critical their insight is into possible compliance issues will make them feel valued and respected. After all, you depend on them to report anything suspicious. In return, you’ll find your employees more dedicated to achieving the company’s broader goals.

Prevention, detection, and correction

Those three words are the epitome of what an effective corporate compliance program is all about. Prevention covers your written policies and procedures, having a qualified Compliance Manager on staff, and ensuring that everyone within the organization has the proper training and education. 

As for detection, this includes your manager’s “open door” policy for communication. Now, if you have a sizable company, you should consider setting up a toll-free hotline. That way, your employees can report an issue quickly but also anonymously if they choose to do so. Detection is also about internal auditing and reporting.

Then there’s corrective action. Included in this is the investigation process that commences after detecting a potential compliance issue, followed by determining the best remediation and taking action. Your disciplinary policy for failure to report or causing a compliance problem also falls under this category.

Of particular interest are the written policies that you include in your code of conduct or code of ethics policy. For this, you need documentation for two levels. First, your leadership team needs complete details about the program, how it works, and the implementation process. Keep in mind; this goes beyond your HR Director, Compliance Manager, and L&D Manager.

Second, you want information compiled that goes out to every person working within your organization. These details should stress the urgency of staying compliant and what non-compliance could mean for the company and their employment. Again, recirculate information on both levels whenever laws, regulations, or internal policies change.

You also want the right person in the position of Compliance Manager. As a critical player in your company, this individual should have a bachelor’s degree at a minimum, experience, and compliance certification specific to your industry. A lot falls on this role, so having a qualified individual serving as your Compliance Manager is vital.

However, for your compliance program to work, your Compliance Manager can’t carry all the burden. This person needs an excellent support team. For this, consider establishing a committee that meets anywhere from two to four times a year. Along with other leaders in your organization, you can include outside experts.

During compliance committee meetings, the group would discuss trends, new and amended laws, regulations, and policies, reporting, grievance monitoring, additional employee training requirements, and any other topics of interest or concern.

According to LW Consulting, Inc., when it comes to leadership, “A successful compliance program is fully endorsed by senior management. In addition to support and endorsement by senior management, a company’s board of directors should also be involved in the process.” It went on to say, “When senior officers take compliance seriously, employees are more likely to follow suit.” Talk about spot on.

Allow us to help with your compliance program

For a broad range of compliance topics, as well as those covering leadership responsibilities such as communication, motivation, building morale, and more, we have a vast library of professionally created training courses available. Especially in today’s world, you can’t afford to have any non-compliance issue. Start developing or refining your program today for optimum protection.

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