Regulatory compliance is clearly an imperative for any organization.
The repercussions for firms that fall short in meeting their regulatory obligations can be significant ' fines, negative publicity and in some cases, even enforced closure.
But complying with the requirements you face can be a challenge. And when it comes to regulatory compliance, simply "doing the right thing" isn't enough ' you also need to document and be able to produce evidence that you have taken the correct approach.
That's where compliance reporting comes in. Detailed reporting can give you a clear picture of your current performance, enabling you to identify gaps that need to be filled, and provide proof that your processes live up to regulatory expectations. The reports you produce are the organizational equivalent of end-of-year exams; they show that you have understood what's required of you, and you are able to deliver it.
Essentially, a compliance report should be like a combination of a regulatory to-do list and a school report (albeit a somewhat turbo-charged one).
Why Do Organizations Need Compliance Reports?
Regular, in-depth compliance reporting is the best way for an organization to ensure that its approach is comprehensive; to measure the effectiveness of its current compliance program; and to create a checklist of required actions. Measuring your current approach is recognized as one of the five stages of an effective compliance program; any compliance audit strategy should have robust reporting at its heart.
Compliance reporting can identify areas for improvement, highlighting any compliance risks that aren't currently being adequately addressed. And it can act as an audit trail, showing where you have taken action and enabling you to spot where any oversights might have occurred. Compliance monitoring is the backbone of your governance approach, and in turn your compliance report is a central element of your monitoring strategy.
Compliance reports identify areas where your compliance goals are being achieved ' and those where further work is needed. Reports can be shared with the board and senior leadership to help them identify risk management priorities and allocate appropriate resources. They can be used as the basis for an action plan for improvement.
And of course, when it comes to continuous improvement, external regulations are not the only criteria against which you should be assessing your business. Organizations also need to meet their own, self-imposed benchmarks ' the internal policies and procedures that help you to deliver best practice. A compliance report can measure how well you comply with these as well as evidencing compliance with externally imposed rules.
One thing worth remembering when considering the value of compliance reports: The absence of an organizational crisis is not a guarantee that all is well. Many potential issues simmer away undetected long before they become a problem. If you don't report on your performance against set criteria, instead relying on blatant red flags to identify any problems, you risk missing the signs that you have potential compliance failures that require addressing.
Compliance reporting can identify at an early stage any misdemeanors or failings that might indicate a wider problem ' fraud or willful breaches of rules, for instance. In this way, a solid compliance reporting program can help to identify and eradicate problems that might fall outside of the regulatory compliance remit, but that would negatively impact the entire organization.
How to Create a Compliance Report
Producing compliance reports can be a lengthy and labor-intensive process. This can especially be the case if you compile your reports manually. It can take compliance teams hours ' even days ' to pull together the required compliance reporting.
Introducing an element of automation, however, can make the process faster, more efficient and more rigorous, minimizing the potential for human error and enabling real-time snapshots of compliance progress.
When creating compliance reports, some of the things you need to consider are:
Your reporting needs to be accessible to wide range of people - not just those in the compliance function who will be familiar with the terminology and focus areas.
Your board and senior leaders need to quickly understand the data presented and the issues identified - this way, you will get their buy-in to the steps you need to take to tackle identified challenges.
Who will you make responsible for building your compliance report? This is a vital role, and one that should be carried out by an experienced compliance officer. It's an important job, so the person you task with it should have sufficient time, as well as expertise, to do a thorough job.
If your appropriate person doesn't have the capacity to undertake reporting, it's important to free them up so they can dedicate adequate time to it. This might mean seeking out efficiencies in their other work - for instance, by introducing an element of automation to the compliance management process ' and/or delegating some of their usual tasks.
What You Will Report On
How will you measure whether your compliance processes are achieving their aims? Compliance reports should be objective; accurate data is therefore a prerequisite. This data might include: incident reports, customer complaints, time taken or revisions needed to publish customer communications or marketing content.
The data-gathering process itself shouldn't be exempt from scrutiny, with regular checks to ensure that the right things are being measured and information accurately collected.
Continuous improvement in compliance requires ongoing monitoring, even if the regulatory requirement only demands a report once a year or so.
Keeping a close eye on compliance performance all year round can have significant benefits, as we've outlined above and in our blog post on the importance of compliance monitoring. Make your measurement a rolling process and you can quickly bring to bear improvements where needed, continually reinforcing the robustness of your approach to regulation.
The Practicalities of Report Production
As mentioned above, creating a compliance report can be labor-intensive and time-consuming. This is particularly the case if you pull together your reporting manually, compiling data from a variety of internal sources and relying on manual record-keeping for your inputs.
You can speed, simplify and bolster this process by leveraging the technology available to you. The benefits of compliance solutions are well-documented; automated compliance solutions underpin some of the most robust reporting, enabling organizations to streamline their data-gathering and collate user-friendly reports at the click of a mouse. Clear dashboards make it easy to share reporting and regulator-ready audit trails ensure you have all the figures at your fingertips.