Most companies have some sort of regulation they need to stay compliant to, and 2021 seems to be a landmark year. Over the past year, companies have had to deal with a growing remote workforce, end-of-life upgrades and the development of new privacy laws, as well as the existing regulatory landscape. Let’s take a look at why compliance is important for your business.
Before we get into regulatory compliance, we should mention that compliance with company-wide regulations are not exempt when considering your business’ compliance responsibilities. Knowing what mandates you need to adhere to provides a business the ability to build processes that work, manage their team’s output more comprehensively and promote compliance with regulations that you don’t have any say in.
Compliance Standards from Outside Your Company
Typically, when we talk about needing to stay compliant, we’re talking about compliance with the ethics-based regulations that help define fair enterprise in society. Since organizations create, collect and use data, and business is competitive, regulations are in place as a deterrent to unethical practices being used. They often come with the type of penalties that responsible managers want to completely avoid.
These regulations are governed by federal, state and industry legislative bodies, and, if not met, can present major problems for an organization. Businesses can be fined, and depending on the regulation, worse.
Staying compliant with your internal regulations may not carry with them the penalties that failing to remain compliant with federal, state, industry or local regulations do, but since presumably your organization’s decision makers came up with the regulation for a reason, not staying compliant can have a negative effect on your business’ ability to meet demand.
Push For Data Privacy
Over the past few years, consumers have become more active in their attempts to take control over their personal information. Most regulations have been concocted to protect against abuse of power. In the case of individual data privacy, there is now a pretty consistent push by regulatory bodies to circumvent the misuse of individual data. This has been met with resistance from major technology companies that have been using personal information to improve their products for years.
The first main data privacy regulation, called the General Data Protection Regulation (GDPR) was enacted in the European Union a couple of years back. The GDPR basically just shifted the power of data to the European consumer for the very first time. Today, its prevalence is forcing businesses that typically used consumer data with impunity, to make serious adjustments in the way they manage their consumers’ data.
Additionally, the establishment of the GDPR has brought the issue to the forefront in many other parts of the world. In the United States, for example, there are currently several proposed regulations that would shift the way companies can use an individual’s data. In fact, in March Virginia’s Governor signed the Virginia Consumer Data Protection Act (VCDPA) into law, which works in the same vein as California’s CCPA and the GDPR to allow consumers to take more control over their personal data. While in Washington and New York, data privacy acts reached the floor of the State Senate only to be voted down. It’s only a matter of time before the U.S. Congress is going to have to address this issue with legislation of its own.
As mentioned at the outset, most companies already have some type of compliance standard they need to meet. Whether it is HIPAA, PCI DSS, or some other standard, knowing exactly what you need to do to stay compliant is important. For the average business, compliance is as simple as fulfilling the following steps:
- Stay in good standing. In order to do business in any given state, you will need a Certificate of Good Standing. This is issued by your state and requires your business to be registered as a legal entity in your state, current on tax filings and other obligations, and not suspended by the state.
- Be aware of any laws that your business operates under. Laws are constantly changing and may affect your business in different ways. Keeping abreast on the latest regulations will go a long way toward putting you in a position to maintain compliance.
- Keep your contacts updated. It’s essential to keep your business contacts list up to date. This strategy helps by having contacts on hand so you can handle important issues that might arise.
- Follow best practices. There’s a way a compliant company does things, and then there’s a way other companies do things. Things like appointing a compliance officer, joining industry-based organizations, learning more about data security, compliance and business transparency and other practices can present the organizational knowledge necessary to stay compliant.
Staying compliant is a process, not a singular task. If you would like help with compliance, call our knowledgeable consultants today at 844.671.6071.