Compliance – a necessary evil?

For those of us involved in the relocation of customers across international boundaries, issues of compliance have become ever-more complex in recent years.

Regulatory requirements in most countries continue to tighten and multinational corporations are increasingly concerned at the prospect of penalties from a failure to comply with the growing number of new rules that they face around the world. Corporations are making significant investments to ensure that they – and their supply chains – comply with the laws, regulations and ethical standards of wherever they are doing business. 

How does an industry as fragmented as ours respond to the challenge of compliance? Having a Corporate Compliance program in place makes good business sense but requires time and expenditure which deters many companies. The potential cost of non-compliance, however, is such that breaches of some laws can result in penalties that could erase years of hard work and investment. How, therefore, do we prevent this from happening?

A company like Crown Relocations faces challenges in both our internal and external supply chains. Recent legislative changes in the areas of data privacy and anti-bribery and corruption have led us to further enhance our approach to these important issues. Following the steps below has positioned us as an industry leader in this arena:

1. Implementing policy, procedure and controls for employees and partners has enabled us to reduce the risk of misconduct. This includes establishing a Code of Conduct for our employees as well as our partner network. Creating policy and procedure is relatively easy – establishing controls is a harder challenge.
2. Appointing senior functional management to provide input and guidance allows Crown Relocations to manage compliance objectively both within and outside of the company. If you don’t have these resources, consider appointing an external party who can perform that role.
3. Background checks on employees and partners - do not delegate authority to anyone with a propensity for illegal conduct. There are sophisticated mechanisms available for such checks but a good start is by accessing a corruption index, such as that of Transparency International. The index shows locations which are perceived to have low corporate governance. If you’re doing business in those locations, extra background checks and procedure controls may be necessary.
4. Education – communicate the expected standards of behaviour to all employees and partners. Crown Relocations does that through e-Learning, but other mechanisms can be used. Having recipients acknowledge their understanding is key.
5. Take all reasonable precautions and steps to ensure compliance – this includes auditing, monitoring and establishing reporting mechanisms. Educate employees to watch out for ‘red flags’ when dealing with locations where risk is higher. Encouraging everyone to report suspected incidents will help identify issues that may require action.
6. Consistent enforcement of policy - using appropriate disciplinary measures will ensure that your employees and partners understand the potential consequences of breaches.
7. Respond to incidents in an appropriate manner and implement measures to prevent re-occurrence – the objective and fair investigation of incidents is essential if repetition is to be avoided. Be careful here; these can be tricky situations to handle as they involve either employees or ‘trusted’ partners. Ask your HR adviser for their support.

Enforcement agencies generally advise prosecutors to take the existence and adequacy of a compliance programme into account when considering prosecution for the criminal actions of an organisation, its employees and its supply chain. If a breach does occur, being able to demonstrate adherence to the steps outlined above will help.

The greater the number of transactions a company carries out, the greater the risk. The geographical range of service provision also heightens risk. Keeping abreast of legislation and alert to increasing risk is a fundamental role of management and there are external organizations who can help too.

Despite all of this, the ability to completely eliminate breaches by individuals is likely to remain beyond our reach. Rather than becoming depressed by that thought, do as Crown Relocations has done and take positive actions in your business to minimize risk. That way, compliance will become something to be proud of, rather than a necessary evil.

 

Stuart Lawson

Stuart Lawson is the Global Alliance Manager of Crown Worldwide Group. Headquartered in Hong Kong, Crown Worldwide Group provides transportation, relocation services, logistics and storage services from offices in nearly 60 countries.

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