Are you familiar with the term – ‘compliance’?
Whilst doing business, your organization and its workforce must adhere to a variety of regulations.
An organization, regardless of its size or niche it is governed by a set of laws, regulations, and internal policies. And it is essential to follow the rules that pertain to the industry to protect your business.
Most business organizations do not quite understand what compliance management means, let alone why it is important. In fact, the term compliance is often poorly defined and considered legal jargon.
That is why we have put together a post that explains what compliance is and why it is important.
Let’s jump right in.
What is Compliance?
According to the Cambridge Dictionary, the word compliance refers to “the act of obeying an order, rule, or request” or “the fact of obeying a particular law or rule, or of acting according to an agreement”.
What does this mean for you? Allow us to explain.
Compliance refers to the practices that organization use to guarantee that personnel and the organization as a whole follow a defined standard of conduct as well as external rules and laws. It could include your company's written values, ethical policy, employee handbook, and legal compliance policies (like taxes and corporate reporting). It may involve or be housed under a general counsel's office in larger organizations. In smaller firms, compliance often falls under the purview of the training & compliance manager and head of human resources.
Truth be told, every employee will encounter compliance in their day-to-day job. It's a broad term that encompasses virtually all of the rules and regulations that you must adhere to while at work, regardless of whether you're an employer or an employee.
What about Healthcare Compliance?
As we all know, healthcare is a highly regulated industry which intensifies the importance of compliance. Healthcare compliance covers a diverse range of rules, regulations and laws related to healthcare practices. However, most of the healthcare compliance issues are closely connected to patient safety, clinical care and patient data privacy.
Maintaining compliance with industry standards and regulations allows healthcare systems to enhance the quality of healthcare. Healthcare organizations such as nursing homes, specialty clinics, hospitals and care homes are subjected to standards, rules, and legislation. Any violations of these statutes can result in lawsuits, financial penalties, or license revocation.
In the U.K, healthcare regulation consists of two categories: regulation of the quality and safety of care provided by health care providers, handled by the Care Quality Commission (CQC), and regulation of the market in health care services, handled by Monitor (NHS) and the Department of Health.
Why Compliance is Important?
- Reduces Legal Problems
When it comes to protecting sensitive information, several industries are required to follow government rules. Organizations that receive, manage, retain, or transfer patient health information, for example, must ensure that they comply with GDPR regulations. Failing to protect such data would lead to hefty fines and a damaged reputation.
A doctor’s surgery in Hertfordshire has been fined £40,000 by the UK’s privacy watchdog for giving out personal medical information in breach of data law.
- Improves efficiency and safety
Many rules and regulations might actually help your business rather than hindering your operations. For instance, rules and policies against discrimination and abuse in the workplace can help you improve the work culture and boost employee morale and productivity. Following safety and security guidelines helps in avoiding injuries and ensuring employee safety, all of which can have a negative impact on your bottom line.
- Build a better brand image
Fulfilling legal duties promotes your organization’s reputation in the eyes of the public, regulators, and other stakeholders. You can share your accomplishments on your website and in marketing materials. It also makes it easier for regulators and stakeholders to make decisions when they believe the company has strong ethical standards and procedures.
Medical associations, payers, and various communities have often publicly expressed that they tend to view those organizations that comply with legal duties in a more positive light.
- Higher employee engagement
Employees might put your company's compliance efforts in jeopardy. An employee may mistakenly leave his workstation unattended or open an email that should have been discarded, resulting in a security breach. Mobile devices can jeopardize your security efforts as well. Hence, it is essential to include your workforce in the process of improving security for compliance.
Employees have a critical role in safeguarding sensitive information. Organizations with a strong sense of responsibility, regulation framework and positive culture can attract and retain talented individuals to their workforce.
- Nurture customer trust
The trust you develop with your consumers is undoubtedly one of the most essential contributors to your revenue. Customers are, after all, what keeps your firm afloat. If your organization is stringent on following regulations and rules, then your customers will know you care about keeping their personal information safe.
A GDPR or CQC-compliant healthcare provider, for example, will be able to quickly acquire the trust of their patients, and the patients will know that their personal health information is adequately safeguarded.
Implications of Non-Compliance
Failure to comply with regulations might entail quite different things across the various industry domains.
If your organization is a member of an accredited body and fails a compliance inspection, it could mean that they are no longer accredited. This can be detrimental, although it isn't always disastrous. However, failure to comply with life-or-death requirements, such as fire safety regulations, could result in disciplinary court proceedings, if not severe fines. For example, non-compliance with GDPR can result in fines of tens of millions of euros.
Above all, the regulations that compliance must deal with are primarily focused on protecting people and money safe, and the penalties for failing to do so can be severe. You may not want to be concerned about compliance, but it is critical, regardless of your business niche or size.
Non-compliance can have substantial, and perhaps catastrophic, commercial ramifications. In response to growing legal scrutiny and ethical standards, as well as the financial and reputational harm that can follow from non-compliance controversies, compliance has topped the list of priorities for many business organizations.
In a nutshell, compliance is and should be an integral part of your organization. The most effective strategy to ensure compliance is to train your staff about the fundamentals of compliance and how it applies to your work environment. JMS One, with its automated assessments and reporting capabilities, can help your organization to promote an effective compliance strategy.
