Environmental, health and safety laws are tightening up, making a regulatory compliance program a must-have for all organizations. A principal challenge in implementing a compliance program is perceived costs. It is therefore critical to transform the cost of compliance into a continuous improvement exercise for your organization. Believe it or not, a well-run compliance program improves the bottom line.
A clear analogy to the current approach to compliance is the “Quality Crisis” of the 1970s, when Japanese manufacturers came into the North American market. Back then, quality was perceived as a cost and automotive companies chose to prioritize production over quality. In contrast, the Japanese prioritized quality over production. The consequence was dramatic. The market share of US automotive companies went from 90% to 45% in 50 years. By tackling quality upfront, the Japanese upended an entire industry and ended up reducing their production costs as they avoided re-work, unhappy customers and scrapped products. If you tackle compliance proactively you will avoid penalties, fines, cleanups, spills and worker injury. The challenge is to convince your colleagues this is the right move. The US car companies only really changed in the face of overwhelming competition.
At the end of the day, the success of any business decision comes down to the management. Management needs to believe in proactive compliance and set the expectations for all of their colleagues and plants. It is critical to implement a program that allows you to compare compliance across all your facilities to identify and correct the problem areas as soon as they appear. You should be able to identify problem areas in real-time without having to wait for various individual facility reports.
A critical element of a global program is the standardization of compliance across your operations. A significant risk of a decentralized compliance approach is inconsistent reports leading to your team comparing apples with oranges. A patchwork compliance program leads to useless data or even worse, misleading data that makes things seem better than they are. To compare apples with apples you must standardize your tools and the reporting format for all of your facilities. A comprehensive compliance program would empower you to use an EHS incident in your China facility to improve the entire organization’s program, not just that facility.
When the ramifications of EHS incidents cross borders, shouldn’t EHS compliance programs too?
As the EHS leader at your organization, you are responsible for EHS compliance at all the locations, not just the headquarters. Unless you connect all your facilities with the same compliance program and tools, you are going to be in the dark and will continue to lack a complete overview of compliance across the organization. And until you standardize your compliance program, you cannot commence your journey on comprehensive compliance and thus cannot turn compliance costs to investments.
Many EHS heads at big organizations agree with me on this. We recently surveyed 15 senior EHS professionals on their views on central vs local compliance approach. It was great to know that 55% were already using Central Compliance approach and 66% were already seeing improved results. 33% think that their staff across the world feel more empowered with uniform compliance reporting. 80% are preparing to make the transition to centralized compliance and everyone agreed that a centralized compliance approach will solve at least one of the many challenges associated with locally managed compliance.
Benefits of a centralized approach:
- Obtain a complete picture of the state of compliance at your organization
- Standardize your facilities’ tools and compliance programs
- Tackle compliance proactively to avoid headaches and help drive operational efficiency
Disadvantages of a de-centralized/ locally managed compliance approach:
- Disconnects facility compliance programs from HQ and each other, preventing a clear picture of the state of compliance and evolving risks across your organization
- Prevents you from achieving comprehensive compliance and keeps compliance as cost and not an investment
- Increases your facilities costs as they feel unsupported and spend resources identifying local compliance approach and tools
Our understanding of the need for a centralized approach is supported by firms like Deloitte with their National Practice leader for Governance and Enterprise Compliance Services, Nicole Sandford saying in a recent article that “Even in a decentralized environment, there needs to be a way for leaders to look across their compliance infrastructure to understand, monitor and address developments. The winning model for enterprise compliance is the one that can deliver that view in a consistent and efficient way”.
Achieve comprehensive compliance with Nimonik
Nimonik exists to help organizations comply with regulatory requirements – leading to less environmental damage, better worker safety and higher quality products. We can help you with:
- Access over 200,000 EHS regulations, standards and guidelines for global jurisdictions on our easy to use software, NimonikApp.
- Receive alerts when applicable documents change or new ones get introduced.
- Access specific requirements in over 200,000 EHS regulations, standards and guidelines for global jurisdictions on our easy to use software, NimonikApp.
- Receive alerts when the specific applicable requirements change or new ones get introduced.
- Use the specific requirements as audit protocols to assess your compliance.
- Assess your compliance to industry standards, corporate policies, customer requests or any other set of requirements with our robust mobile and web auditing app, Nimonik Audit.
- accuracy and comprehensiveness of our regulatory content
- rapid publication of regulatory changes
- easy to use software
- exceptional customer support
- state of the art IT security