How to Build an Agile Plan to Manage Regulatory Changes

Jonathan Brun

What is Compliance Management?

Compliance management ensures a business follows all relevant laws, regulations, and industry standards. It involves identifying and assessing compliance risks, implementing policies and procedures to address those risks, and monitoring and reporting on compliance activities.

Effective compliance management helps companies avoid legal and financial risks and maintain their reputation and credibility. It also helps to properly train employees on their responsibilities and best practices, especially in heavily regulated industries such as energy, healthcare, and finance.

The Importance of Compliance Management

Compliance management is a continuous effort that addresses evolving regulations, business expansion, geographic reach, and newly implemented laws. It generally follows both mandatory standards and federal or global regulations, such as the following.

International Standards Organization (ISO)

ISO provides quality standard guidelines for various industries, such as manufacturing, healthcare, and transportation. The guidelines are widely accepted as a standard in the industry but don’t have legal obligations. Regular external audits, performed by third-party auditors, are necessary for organizations to maintain ISO compliance.

Committee of Sponsoring Organizations of the Treadway Commission (COSO)

The organization offers a structure and procedure to establish internal financial controls to prevent fraudulent activities, including bribery and violations of campaign finance laws.

The Federal Energy Regulatory Commission (FERC)

This government agency sets standards to protect critical infrastructures as part of the Federal Power Act. Compliance with approved reliability standards is mandatory for bulk power system owners, operators, and users, who must register with North American Electric Reliability Corporation (NERC) via their respective regional entities.

The Occupational Safety and Health Administration (OSHA)

The OSH Act of 1970 created this federal agency, and it’s part of the US Department of Labor. OSHA establishes and enforces regulations that mandate employers to ensure a risk-free and safe workplace.

The Food and Drug Administration (FDA)

The FDA is a federal agency under the US Health and Human Services Department. Its responsibility lies in regulating and enforcing laws on drugs, medical devices, and biological products to safeguard public health. The FDA regulations extend to cosmetics and veterinary products as well.

Health Information Portability and Accountability Act (HIPAA)

The law regulates, enforces, and administers fines for violating the use, storage, and transmission of protected health and patient information.

The Difference Between Compliance and Risk Management

Compliance and risk management are two essential components of any successful business strategy. While they are closely related, the two have some key differences. Compliance management ensures that a company follows all relevant laws, regulations, and standards. It includes maintaining accurate records, reporting on financial activities, and adhering to ethical principles.

On the other hand, risk management is about identifying potential business risks and mitigating them. It can include everything from assessing the likelihood of a cyber attack to developing contingency plans for natural disasters. Industry norms or regulatory guidelines, including risk severity, can guide the risk assessment.

Compliance management focuses on legal requirements, whereas risk management focuses on broader business objectives.

Challenges in Compliance Management

Compliance management can present many challenges, and some factors can increase complexity. It may be beneficial to address these obstacles proactively.

Teams Working Across Multiple Platforms

As many organizations embrace working remotely, assessing risks and implementing procedures across multiple systems, pose challenges. Investing in new technology that enhances visibility and promotes team alignment may be necessary to ensure strict compliance.

Volatility in Security and Compliance

Changes in compliance can occur rapidly due to technological advancements and security risks. It’s sometimes necessary to make timely updates with little notice. So, a compliance officer must ensure the plan remains current.

Working With Third Parties

Many organizations work with external parties, such as consultants, suppliers, and vendors, during their product lifecycle. It may not be feasible to manage their compliance processes. Nonetheless, you should inform them of your compliance management standards, ensure they follow them, and provide audit reports as proof of compliance.

Siloed Functions

There are often circumstances that trigger compliance processes, such as regulatory changes, legal disputes, or criminal investigations, and the approach is not always holistic. This separation of responsibilities can result in communication obstacles between departments, potentially hindering stakeholder cooperation.

Disconnected Systems

Separating compliance responsibilities into different areas may result in a lack of integration in the technology used to perform those responsibilities. Managing compliance effectively across business lines, functions, or locations can be challenging. Multiple individuals may need to search for the same information without a unified approach to exchanging data.

Manual Processes

Using spreadsheets, shared files, and documents to manage compliance may have made sense before, but these tools cannot keep up with ever-changing regulations. Updating every spreadsheet manually for a single regulatory change can take hours. With hundreds of regulatory changes that occur, the problem multiplies. Re-entering or copying data also increases the risk of human errors.

Lack or Absence of Metrics

Combining information from various systems into reports can be time-consuming and prone to errors. Reports are often outdated by the time they’re completed. And without advanced analytics, compliance management may focus only on past events, not potential risks.

Limited to No Visibility

A lack of an integrated view of compliance-related activities can result in gaps and inconsistencies in compliance tracking and management. It can lead to undetected or unaddressed risks, potentially causing damage as the full impact is difficult to gauge until it’s too late.

Elements of a Strong Compliance Program

According to the United States Sentencing Guidelines, a federal law that specifies damages for fraud against the government, a successful compliance program must include these seven aspects.

  • Policies, procedures, and conduct standards are in place – Organizations with clear policies and guidelines outlining compliance requirements are more likely to achieve consistency.
  • Provide program oversight – Assign a compliance manager to oversee, monitor, and enforce your company’s compliance program. This person will also be your company’s go-to person for any questions or concerns.
  • Employee education and training – A training program must be in place to communicate the program’s criteria, including an annual refresher session to remind staff of the code of conduct and any updates.
  • Safe and effective communication channels – Employees must have safe means to communicate about compliance, ethics, and challenges effectively. An anonymous reporting system must be available for reporting compliance issues and fraudulent or illegal activities without fear of retaliation.
  • A method for monitoring and auditing – Establishing a monitoring system, including formal audits, can assess the effectiveness of your company’s compliance program and identify potential hazards.
  • Adheres to disciplinary guidelines – Develop a plan to ensure prompt compliance with behavior standards, including appropriate corrective actions for employees who fail to meet program requirements, regardless of their position.
  • Responding promptly and taking action – Make a prompt and consistent effort to address vulnerabilities or violations discovered through monitoring and audits.

Creating a Compliance Program

Compliance programs are not a one-size-fits-all approach. Although some basic principles and practices exist, you must customize your plan based on your company’s requirements. The following steps will help you streamline this process.

Secure Leadership Support

The success of compliance programs relies on the endorsement of senior management. If the board and the C-suite do not prioritize compliance, it may result in a program that is only superficially effective, if not wholly absent.

A company’s dedication to compliance is crucial in encouraging adherence across the organization. Proper allocation of resources can also motivate others to comply.

Make a Thorough Assessment of the Risks

Organizations must evaluate and address internal and external risks that could impact their compliance status. Assessing your organization’s risks involves considering legal risks related to non-compliance and risks related to vendors and transactions.

Develop Policies and Procedures

The compliance program you develop must define standards and control procedures in response to your identified risks.

For example, healthcare providers offering telemedicine services and accepting credit card payments must establish measures to protect electronic personal health and cardholder information. These measures may include endpoint encryption, firewalls, and data separation to meet compliance requirements.

Communicate the Plan and Train People

Effective compliance management requires clear communication to ensure all stakeholders know the regulatory requirements and understand their responsibilities in maintaining compliance.

You can disseminate the plan through various communication channels, such as emails and training sessions. The training sessions should include essential aspects of the compliance plan, such as relevant regulations, the repercussions of non-compliance, and the process of reporting any violations. It should also be interactive and informative to allow employees to seek clarification and ask questions.

Monitor the Results

Once a plan is in place, it’s essential to evaluate the effectiveness of current compliance methods through monitoring. Proper evaluation of risks requires using appropriate strategies and assigning responsibility to the relevant individuals or groups.

Conduct Periodic Audits

Conducting regular audits is an excellent way to monitor the results of your compliance management program. Audits allow you to assess the effectiveness of your compliance policies and procedures, identify areas of non-compliance, and develop corrective actions to address any issues.

Internal audits will help you identify gaps in your compliance program and ensure it’s up-to-date with the latest regulations. In contrast, external audits by an independent third party will ensure objectivity and impartiality.

Monitor Your Organization’s Compliance Obligations With Nimonik

One of the most critical aspects of compliance management is keeping track of your organization’s compliance obligations. It can be daunting, especially if you have multiple sites, employees, and regulations to comply with. That’s where Nimonik comes in.

Nimonik is a cloud-based compliance management app that helps you monitor your organization’s compliance obligations. Here are some of the things users can do with Nimonik.

  • Access more than 2,000 free audit templates based on standards and best practices
  • Customize your audit template and distribute it throughout your organization
  • Upload your internal documents and get recommendations to prioritize compliance actions
  • Prioritize compliance obligation using risk matrix and track deadline over time
  • Stay up-to-date on the latest regulations and receive notifications of relevant changes
  • Generate real-time audit reports in PDF, Word, or CSV formats to share with stakeholders

If you need help implementing a Comprehensive Compliance program for your organization, please contact us at or at +1-888-608-751