Today/Currently, compliance processes have become much more important especially for companies due to the expanding implications of globalization. With the globalization of economic activities and companies’ organizational structure and operations that also influence their worldwide presence, the number and scope of regulations affecting companies have been expanded. Companies are frequently unaware of certain regulations to which they are subjected and obliged and only become aware of such obligations after encountering a sanction.
Compliance entails dealing with many regulations as well as comprehending and assessing all the technical aspects associated with their execution. However, before segmenting each category inside itself, a company ought to establish a system to create, follow, and sustain its compliance process, which should be also consistent with its unique DNA.
According to the definition of the term “compliance,” companies should determine with which regulations they should comply. As mentioned at the beginning of the article, one of the most crucial criteria in determining the regulations to be followed is the organizational structure of the company. Companies are clearly subject to the legislation of the country in which they have been established. However, if a company conducts business in another jurisdiction, it may be subject to the legislation of that country in addition to that of its headquarters. Even if a company is incorporated and operates in a single state, it may still be governed by laws of another country if it has foreign employees, or its activities have implications in a foreign country, or it has business dealings with third parties worldwide. Therefore, before addressing their compliance duties, companies should first determine which country’s laws they are subject to, or if they are subject to international law.
In addition to overarching legislation, the regulations that businesses should abide by may vary depending on the industry in which they operate. Correspondingly, the company must determine its industry and the implications of that industry.
Moreover, regulations include both primary legislation and secondary legislation, such as directives and communiqués.
Compliance requirements also encompass decisions made by administrations serving as the applicable legislation’s supervisory and regulatory authority, as well as legal precedents. The requirements arising from such decisions often provide guidelines for compliance.
Internal regulations of companies are crucial aspects of compliance that are frequently disregarded currently. Companies should examine that if their internal regulations conform with the laws to which they are subject, and they should establish a compliance program to ensure that their actions are in accordance with their internal regulations.
After determining which regulations necessitate their compliance, companies should identify their business-as-usual, which will initiate a CHECK-UP process at the company to identify its practices that are compliant or non-compliant with the applicable regulations. Thus, potential penalties and repercussions for non-compliance will be identified, and the findings will be categorized based on their risk category.
Following the completion of the CHECK-UP process, companies should develop a STRATEGY to eliminate or minimize their risks along with a roadmap. It is critical to identify and categorize the stages in this roadmap from the high-risk group to the low-risk group.
Companies should conform with the actions outlined above to ensure compliance. However, maintaining compliance progression and persistence is also crucial. Compliance should be in sync with its dynamic, evolving, and up-to-date structure.
Businesses’ compliance efforts are long-term, with stages that should be incorporated in their internal DNA. Today, companies tend to focus on certain areas of compliance; however, their compliance should encompass more than just competition law, personal data protection law, or anti-bribery law. Each legislation relating to a company serves as a guide and has an impact on compliance. Nonetheless, given the relevant administrative fines or other penalties that resonated media attention, it is predictable that businesses spend more effort on compliance in some areas. In fact, it is strategically appropriate to define risk categories and prioritize them in terms of compliance, depending on the unique structure of a company, as mentioned above.
Considering the growing globalization, this article has discussed how to analyze and manage the compliance needs of businesses. It is worth emphasizing again how important it is to treat each element with technical and practical concerns. Otherwise, companies may suffer consequences such as being accused of offenses defined in the Turkish Criminal Code, incurring substantial administrative fines, compensating relevant parties, and being compelled to cease operations temporarily or permanently. Furthermore, it must be acknowledged that these consequences can be imposed on both the company’s legal entity as well as, its executives and employees.
