Buying Down Risk Using Standardized Management Systems

In today’s business landscape, many companies operate in a heavily regulated environment where strict compliance is essential. The consequences of non-compliance can be severe, ranging from substantial fines, legal liabilities, reputational damage, and even the loss of business. Hence, it is vital for companies to take a proactive approach towards managing their compliance obligations to minimize risks and fulfill all applicable laws, regulations, and stakeholder requirements.

One effective approach to addressing compliance risk is by implementing a compliance management system. Such a system includes a set of policies, procedures, and controls designed to ensure that the company meets its compliance obligations. It also provides a framework for identifying, assessing, and mitigating risks associated with non-compliance.

The Role of Compliance Management

By implementing a robust compliance management system, organizations can reduce their exposure to identified risks and better protect their interests. These systems are designed to help organizations establish policies and procedures, define roles and responsibilities, identify and assess risks, establish controls, monitor compliance, and report on compliance activities.

Another advantage of compliance management systems is that they provide a centralized view of compliance activities across the organization. This enables businesses to identify and prioritize compliance risks more broadly, allocate resources more effectively, and monitor compliance activities in real-time.

Why choose ISO 37301:2022

There are numerous management system standards available for organizations to choose from. However, the ISO 37301:2022 Compliance Management Systems (CMS) standard offers a versatile solution for managing obligations at both the corporate and operational levels. By effectively managing a wide range of programs, including those related to sustainability, environmental concerns, security, safety, quality, and more, it can help to ensure compliance with legal, regulatory, and voluntary obligations.

ISO 37301 is a recently published international standard that provides guidelines for establishing, developing, maintaining, and improving compliance management systems. This standard provides a structured framework for managing compliance risks, including identifying and assessing compliance obligations and managing non-compliance.

ISO 37301 shares many similarities with other standardized management systems, such as ISO 9001 for quality management, and 14001 for environmental management, as examples. However, there are some key differences that set ISO 37301 apart, including:

1. Focus on Compliance: Unlike other management systems, ISO 37301 is specifically designed to help organizations manage compliance risks.

2. Risk-Based Approach: ISO 37301 requires organizations to identify and assess compliance risks, prioritize them based on their likelihood and impact, and develop and implement appropriate controls and safeguards to mitigate those risks.

3. Integration with Other Management Systems: ISO 37301 is designed to be compatible with other management systems, such as ISO 9001, ISO 14001 to allow organizations to integrate their compliance management activities with their other management systems.

4. Standard is certifiable: Not all management standards are certifiable. Certification is a formal process that involves an independent third-party certification body (i.e., and accredited auditor) assessing the organization’s compliance management system against the requirements of the ISO 37301 standard.

The ways ISO 37301 addresses compliance risk

1. Compliance risk assessment: Risk assessment involves comparing the level of compliance risk that is acceptable with the level of compliance risk set out in the organization’s policy. This helps organizations identify and prioritize compliance risks and develop appropriate controls and processes to manage them.

2. Compliance management system: ISO 37301 provides guidance for establishing and implementing a compliance management system that aligns with the organization’s compliance risks and objectives.

3. Continuous improvement: ISO 37301 requires organizations to continually monitor and review their compliance management system to identify areas for improvement. This includes collecting and analyzing data, conducting regular reviews and assessments, and making changes to processes, controls, and procedures as needed.

4. Accountability: ISO 37301 emphasizes the importance of accountability in compliance management: “The responsibilities of top management should not be seen as absolving other levels of management of their compliance responsibilities, as all managers have a role to play with respect to the compliance management system. It is therefore important that their respective responsibilities are clearly set out and included in their job descriptions.”

5. Training and education: ISO 37301 requires organizations to provide training and education to employees, contractors, and other stakeholders to ensure that they understand their roles and responsibilities in managing identified compliance risks. ISO 37301 also states that, “properly designed and executed training can provide an effective way for personnel to communicate previously unidentified compliance risks,” which provides additional resiliency.

Conclusion

The ISO 37301:2022 Compliance Management System standard offers a versatile solution for managing obligations at both the corporate and operational levels. This standard provides a structured framework for managing compliance risks, including identifying and assessing compliance obligations, implementing controls and safeguards, monitoring and evaluating compliance, and managing non-compliance.

By using ISO 37301, organizations can identify and prioritize compliance risks across the organization, integrate their compliance management activities with other management systems, and continuously improve their compliance management system to ensure ongoing effectiveness.

Join us for our upcoming webinar where we will take a deep dive into the ISO 37301 standard and outline steps to implement it within your organization.