Understanding the terminology
Stakeholder: A stakeholder is an individual or interested party with interest in any decision or activity of an organization. These people within the organization are either directly impacted or contribute in some way or just have an interest or stake in the activity. There are a wide number of stakeholders, and each will have their own needs and requirements. Stakeholders may include suppliers, internal staff members, customers (including shareholders, investors, and consumers), and regulators. They need to be engaged in a way relevant to them at each stage. Therefore, it becomes crucial to understand which stakeholders to communicate with, at which stage, what is the best way to communicate, and how can they contribute to the success. A stakeholder’s buy-in is essential at each stage of the process, leading to a solution where everyone benefits.
Grievances: As stated above it is imperative to have stakeholder engagement at every stage of the process for a project or organization to achieve its desired objectives. Stakeholders provide relevant information, opinions, and ideas that will directly affect the decision-making and planning process. Lack of understanding and communication leads to concerns, issues, and grievances among the stakeholders. Therefore, a grievance can be defined as any dissatisfaction that is formally brought to the attention of the management which leads to escalation.
Compliance: Compliance is a widely used and familiar term these days, but at the same time it is challenging as well. Compliance is about following the defined set of policies, procedures, and processes in adherence to the laws, rules, requirements, and guidelines set forth by the authorities. It is about doing things the right way, both in accordance with industry regulations and government legislation. There are several types of compliance that an organization should be familiar with based on the nature of their business such as regulatory compliance, HR compliance, data compliance, health and safety compliance, etc. Compliance, therefore, is all about demonstrating that the organization is in accordance with the defined guidelines and, thus, avoiding any legal/financial implications.
The critical role of enterprise compliance
Compliance provides a sturdy framework which helps the organization to grow and build its professional reputation. The importance of compliance in an organization cannot be ignored, and it must be part of the core values and culture. The reason I stated compliance is challenging is that with the regulatory compliance environment constantly changing, organizations need to keep abreast with these changes and learn to adapt, ensuring the business is not at risk.
Most organizations believe that ‘compliance requirement’ inevitably makes life difficult for business operations. But in reality, it provides various long-term benefits by reducing erroneous, negligent and even illegal behaviours. The trust is that adhering to compliance and regulations helps businesses mitigate risks and losses to their business objectives. Furthermore, ensuring compliance across the organization ensures the execution of internal and external operations smoothly. It provides transparency to the customers and stakeholders, builds trust, and protects the organization from hefty penalties and fees that could result in reputational loss and the organization being forced to shut down.
Challenges in ensuring organizational compliance
Compliance is a dynamic arena where challenges tend to evolve since they are impacted by regulatory environments, market trends and emerging risks. As said above, with the constantly changing regulatory environment and requirements, businesses must learn how to adapt to these changes, to always remain compliant. The challenges faced by an organization’s Risk and Compliance Team is to ensure that the business remains compliant and meets the necessary regulatory requirements.
First, they need to keep abreast with and assess how the organization needs to comply with the laws and regulations, and then identify the areas where the organization is not complying. Next, they must establish and implement controls at the required places as per the requirements, and finally, find ways to report on their compliance with the required laws and regulations. Also, now most of the organizations are focusing on improving their regulatory compliance leading to additional costs.
Therefore, a strong emphasis must be placed monitoring and adapting to changes in regulatory requirements to avoid any negative consequences of non-compliance. This can only be achieved when the compliance requirements are aligned with the organization's objectives, compliance buy-in, and appropriate budget approvals from the senior management and stakeholders.
Compliance should be treated as a critical component for any organization as it improves the business, increases profitability, protects from lawsuits and cybercrime, improves the organization’s overall operations and builds a positive reputation.
Resolving challenges to address stakeholder grievances
Stakeholder complaints and grievances is of utmost importance for an organization. Proper redressal of complaints and grievances is critical as it builds trust and confidence within the customers and stakeholders, brings in more business, and helps get to the root cause of the issue.
The various measures which can be adopted to overcome these challenges are:
- Active collaboration
- Assessing and understanding the grievances and risk
- Enabling non-siloed communication channels
- Integrating risk and compliance with grievance management to proactively address complaints
Lastly, compliance should be treated as a critical component for any organization as it improves the business, increases profitability, protects from lawsuits and cybercrime, improves the organization’s overall operations and builds a positive reputation.