Recent regulatory trends suggest a paradigm shift in society, with regulators encouraging a changeover to far more responsible business practices in the public interest. A certificate of compliance builds trust in the eyes of customers, shareholders, and the government.
The CEO of any company would do well to consider ways of managing and mitigating their key risks as well as growing their business. Yet not all Latvian CEOs perceive risk management and compliance as an ongoing process. PwC’s latest CEO survey reveals that Latvian CEOs rank the compliance burden high among their top business issues. This article explores whether a company is well informed about requirements that are relevant to its business and whether it has the right procedures in place to help it stay compliant.
Always well informed and compliant?
An affirmative answer implies the following assumptions:
A wide range of experts make up your team;
Risk management is a separate function integrated in your company;
Compliance checks are conducted as a matter of routine;
Your company has a good understanding of ethics and shared values.
Unfortunately not many Latvian companies are prepared to invest in efficient compliance controls. Instead they rely on the integrity of their management and staff and on the capabilities of their lawyers in the event of a crisis.
It’s important to remember that integrity involves the ability to refuse something, which is often capable of monetary valuation, for the sake of higher aims. Integrity should be affirmed in practice to ensure that the people around believe it and that employees act in the same way whenever their personal interests come into conflict with the employer’s instructions. The level of importance attached to integrity varies from person to person, a factor to be taken into account when it comes to defining the functions and decision-making rights of various employees.
Despite our high values, psychology studies suggest that our decision making is affected by cognitive prejudices. In other words, we fail to fully consider all the circumstances when making our day-to-day decisions. That’s not always necessary but in certain cases even a tiny mistake spotted by regulators may expose your company to a lengthy investigation or a fine.
While no one can rule out human error, that doesn’t mean we should resign ourselves to our fate or to the discretion of regulators. Efficient mitigation of risks that results from adopting compliance requirements for your staff demonstrates your management’s responsibility for your corporate performance, as well as contributing to the trust and integrity of your staff when it comes to carrying out other management instructions and upholding corporate values.
But what risks should we be focusing on? Competition law topped the regulatory agenda five years ago, AML arrived three years later, and this year we have data protection on our hands. Whether these issues matter to each company is a question that deserves an individual assessment.
can help you identify any risk areas and considerations relevant to your business and explore ways of mitigating those risks. If you’d like free advice, why don’t you reach out to Maris Butans, a compliance expert at PwC Legal
(+371 67094400, firstname.lastname@example.org
More details can be found in Compliance Study
conducted by our global team of experts.