Fordway Blog

Why compliance is key to managing risk

[fa icon="calendar"] Jan 20, 2021 10:00:00 AM / by Neville Armstrong

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Cynics sometimes describe compliance as little more than a box that has to be ticked to remain in business. It’s often seen as a burden – a means of ensuring your organisation meets the regulatory and legislative standards of the environment you operate in.

However, that shows a misunderstanding of what compliance is all about. Rather than a burden, you should consider it as a statement of your organisational values and an investment in future growth. It’s a vital part of ensuring your organisation moves in the desired direction.

Compliance can even enable you to create added value for your business. Done properly, it assures your customers that your systems and values are visible, secure and viable, supporting sales and driving revenue. Increasing or enhancing compliance can give you a competitive advantage over your rivals and open up new markets. It will also reduce costly mistakes and made lack of performance visible to senior management.

There are internal benefits too. It will ensure everyone in the organisation understands their roles and responsibilities and cement accountability. Operating externally audited best practice policies and processes will create confidence among employees, improving morale and increasing staff retention.

Understanding risk is an important aspect of compliance. Each organisation needs to assess its Risk Appetite i.e. the threshold value above which it treats each of the risks as a potential disruptor to operations. It can then consider the cost of putting in effective compliance against the costs to the business if a threat succeeds.

Risk appetite needs to be reflected in tailored management systems, such as a Quality Management System (QMS), or in an Information Security Management System (ISMS) where IT security is key to business development and sustainability. Organisations who wish to focus on customer satisfaction may implement a Service Management System (SMS), or those who want to assure their community and ethical values may want or need, to implement an Environmental Management System.

Existing standards can provide a basic framework, but they need to be tailored to your organisation’s specific needs and strategic direction to extract value.

There’s more information about compliance in our White Paper on Managing information security risk in a digital world, from a discussion of the three types of compliance to tips on assessing Risk Appetite and streamlining governance and compliance.

Want to know more? Read what our CEO, Richard Blanford has to say about Risk Management here.

 

Topics: technology, risk management, compliance

Neville Armstrong

Written by Neville Armstrong