The Problem
The public outcry following a string of avoidable incidents including building collapses, food and healthcare product contamination, heavy vehicle accidents and ferry disasters are causing regulators to invoke tough new laws to deal harshly with recalcitrant businesses and their directors.
Many other forms of poor adherence to compliance such as corruption and fraud are being reported on frequently and we are seeing a rise in enforcement actions resulting in huge fines and jail, as the response.
Across The Globe We Are Seeing
- Governments ramping up the volume of legislative changes and enshrining doctrines empowering regulators to carry out their duties with new aggression
- Revised laws enabling enforcement agencies to target individuals like company directors, compliance officers and others with governance responsibilities – no longer are they able to hide behind the corporate veil
- A massive increase in the magnitude of fines being levied for compliance breaches, with new records being set constantly.
The Penalties For Non-Compliance And Negligence Are Getting Tougher
The trend is perfectly illustrated in this recent example, where a trucking company received the biggest fine in Australian transport law history.
In the news article, Minister for Roads and Freight Duncan Gay and General Manager of RMS Compliance Operations Paul Endycott, comment on the landmark penalty, marking the largest in NSW history under Chain of Responsibility legislation:
“Under Chain of Responsibility Laws we can pursue everyone from the scheduler and packer to the consignor, consignee, right up to the company’s directors and CEO.”
Mr Gay further adds: “We will ensure companies are held responsible if they are involved in an incident which they could have taken steps to avoid.”
This is not simply a local matter. The trend is global. There’s nowhere to hide and the buck stops with you no matter how far up or down the ladder your rung is.
Why Auditing is The Answer
With the risk of non-compliance being higher than ever, the most effective strategy to ensure compliance is an efficient auditing process across the entire range of business operations, at all levels. You have to ask the tough questions of your own business to get the insight you need to manage it effectively.
A Solid Auditing System Will Give You
- A positive culture to ensure compliance and hopefully avoid any accidents. Led from the top, a compliance culture ensures that everyone in the organisation is aware of their roles and responsibilities to do the right thing, the right way, and be accountable for their actions.
- Evidence that you know what is going on in your business and are implementing change when problems are identified. Accidents can and will happen. To have any hope of defending yourself and your business from prosecution, you must be able to demonstrate that you have procedures in place to identify problems and rectify these promptly.
- A deep level of engagement to ensure your business is compliant across the entire chain of responsibility. Your compliance auditing activities must include your extended business operations and relationships. All staff should be aware of regulations applicable to all countries and locations in which your business operates, and the policies and procedures implemented to assure compliance.
- Peace of mind in knowing you are adhering to all relevant regulations and standards. As with all other areas of business, procedures and standards must be implemented and of course followed by all stakeholders, to ensure all business dealings are legal and compliant.
Auditing is a proactive and diligent approach to positive change in your business and puts the safety of your customers, staff, third parties and the larger public first. And it will help you sleep better at night.
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