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Corporate Compliance Report

Satisfactory Essays
Corporate Compliance Report

Companies that are being established as well as companies struggling with compliance issues need some method of dealing with governance. The method of handling corporate governance and compliance issues is to implement an enterprise risk management system (ERM). The system should examine alternatives and incorporate the suitable processes that fit into the company's structure. Developing internal control and corporate governance procedures is the foundation for such a system. Developing these procedures include identifying and putting into practice compliance steps and processes. The company will need to implement preventative internal controls that incorporate risk mitigation. This segment of the process includes utilizing systems and benchmarking organizations for compliance techniques. Lastly, the company will need to determine which techniques to put into practice in its compliance attempt. The company will begin to implement its enterprise risk management system by developing an appropriate internal control and corporate governance system.

Developing Internal Control and Corporate Governance System

Establishing internal control and corporate governance system helps ensure corporate compliance. Significant strategic planning is needed when developing a functional internal control and corporate governance system. This strategic planning includes developing preventive, detective, and corrective controls to cover the aspects of the corporate compliance.

The first step or control procedure a company should undertake when developing a governance system is developing preventive controls to avert a possible compliance violation. Preventive controls include developing guidelines and responsibilities to conduct reviews of ethics policies, conflict-of-interest procedures, and updates in corporate compliance procedures that will protect and position the company to prevent a possible compliance violation. An associate of the company's preventative control measures include comparing the organization's current conflict-of-interest policy with industry regulations on a regular basis, reviewing recent government filings, and evaluating the company's current compliance program. If these control steps are proactively taken regularly in the organization, the company will have taken preventative steps to avoid a potential future compliance violation (Maltz, Nov/Dec 2003).

The second step or control procedure a company should take to promote corporate compliance is a detective control. Detective controls will enable the company to detect if a possible compliance violation occurred or is at-risk for a violation occurring. The company will assign an associate or group of associates the responsibilities of taking detective control measures in regard to compliance regulations. Detective control responsibilities include reporting promptly and addressing objectively any compliance violations, making sure a prescribed observation program is in place to make certain the organization adheres to its code of ethics and compliance regulations, and formally reviewing and aligning company compliances with government regulatory compliances.
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