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Are the consequences of non-compliance worth the risk?


Countless local and international regulations that govern every business operation are put in place to ensure that commercial entities act in a reasonable and responsible manner. But with the abundance and complexity of regulations, and the fact that they change rapidly, many businesses tend to treat compliance as a secondary function with little consideration of the consequences.
In addition to penalties such as hefty fines and trade sanctions, other consequences of non-compliance with applicable laws can include:
* Criminal charges – No director or board member wants to face criminal charges for not ensuring that their enterprise adheres to the law. However, criminal charges are a potential consequence for certain regulatory non-compliance. Failure to comply in areas pertaining to staff management, workplace safety, marketing, supply chain, corporate governance, stock management and due diligence laws could result in jail time.
* Reputational woes – Business’ public image is key to its success. When a company is thrust into the public eye for failing to comply with regulations, there are reputational repercussions, which eventually leads to distrust. Once that happens, loyal customers may leave, new customers may be put off and potentially beneficial partnerships may never develop.
* Loss of lucrative opportunities – South African businesses are required to meet a host of regulations if they wish to do business with government or any of its parastatals. Non-compliance across your enterprise and business network could result in exclusion from the tendering process and supplier database. In addition, companies that place value on corporate compliance may avoid doing business with you as they would want to ensure that they meet their own regulatory obligations.
Greg Chamberlin, ‎business development: compliance at LexisNexis, says companies can avoid these consequences by having in place a well-coordinated compliance management system, which begins with identifying the acts and principles that apply to your organisation. In addition, he advised taking a pro-active approach to protecting the business. “It is extremely beneficial to keep abreast of the updates and changes to these regulations so that you can identify threats before they impact your business.
“Compliance is challenging and LexisNexis offers a variety of solutions to simplify the process,” he adds. “One such solution is Lexis Assure, a built-in notification service that informs customers of any regulatory changes that could specifically put their businesses at risk.”
LexisAssure is backed by a team of LexisNexis journalists and subject matter experts providing the information companies need to interpret emerging legislation. The solution keeps users abreast of regulations to determine their compliance obligations within the context of their own industry and organisation. This information powers the regulatory change management engine, ensuring that users never miss an important regulatory event and that they can action the necessary changes quickly and effectively.
The solution base package covers Human Resources, Financial and General Compliance. For a more comprehensive solution organisations can then add industry specific packages such as Banking and Financial Services, Manufacturing, Transportation and Retail.
Key features include:
* Regulatory Universe – A convenient snapshot of all the relevant Acts relating to the users’ business as well as the level of associated compliance risk for each Act.
* Proactive alerts – with emails that put legislative changes on the client’s radar within 48 hours
* Meaningful Expert Analysis – with simple, clear explanations of any changes to the client’s regulatory universe, relevant compliance obligations and any penalties resulting from non-compliance
* Compliance Calendar – which reminds customers about important effective dates of legislation, regulations and penalties affecting their regulatory universe.