Every business, from the largest international corporation to the smallest law firm, would benefit from implementing a compliance program. Compliance programs help educate employees on national and international laws and regulations, ethical business behavior, requirements applying to them, and what they can do to efficiently comply with them. They are especially important at start-up companies, and easier than ever to implement before even opening your doors.
Any time is a good time to implement a compliance program, but the best time is as you start your business. Here are 6 reasons why your new start-up needs a compliance program:
1- It is Easier (and Less Expensive) to Implement Up Front
It is easiest to implement a compliance program when there are no other systems in everyone’s mind. This allows you to follow legal requirements from the beginning, so you can avoid costly mistakes down the line. Some businesses, after implementing compliance programs, are still held responsible for mistakes they made before focusing on compliance. If you’ve had it in place since the beginning, you have less to worry about.
2- Protect Your Future
Any business owner’s worst nightmare is a lawsuit. Compliance programs help you mitigate any potential risks your business holds, particularly ones you are completely unaware of. Compliance is not just “the right thing to do” – it is a practical investment in your company’s future, covering your blindspots and protecting your business model.
3- Create a Culture of Corporate Compliance
Implementing a compliance program from the beginning is not just about following government regulations. It is about instilling a culture of care into all of your employees. When your employees know that your company cares about the outside world and about the workplace environment, it instills purpose into everything they do. It also is much more difficult to change the practices of long-standing employees than it is to create good habits from the beginning.
4- Reassure and Impress Your Clients
The results of your compliance work will immediately be noticeable by your clients. It creates a sense of legitimacy and assures the client that you are trustworthy. Simple things like complying with privacy regulations on your website, with money laundering and anti-corruption laws, diversity and inclusion in the workplace show a potential client how much you care before they even have any formal interaction with your business.
5- Attract reliable Investors and Third Parties
Investors and third parties (vendors) play a key role in the success of a start-up, however managing these important relationships bring risks. It’s critical to manage these risks in a way that ensures third-party products and services, as well as investors’ money, are in compliance with applicable laws, regulations, and security best practices. The presence of risk-based and integrated processes, appropriate controls, relationship management, and the presence of actions and consequences in the face of misbehaviors, ensure a start-up is dealing with reliable investors and third parties.
6- It is Simple to Get Started!
Creating a compliance program is not difficult, especially as you are building your start-up.