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It’s no secret that positive reviews are essential for online retailers, but you may be surprised by the importance of ratings for B2B enterprises. Experts say that over 60% of a company’s value is connected to its reputation. Organizations that have a history of compliance and regulation frameworks build stronger client relationships and nurture leads more quickly.
Three of the top factors that impact your brand’s reputation are the quality of your products (63%), the safety of your services (60%), and customer privacy (60%). On the other hand, a single data breach for non-compliance costs public corporations 7.5% in stock value on average — usually meaning billions of dollars in reputational damage and lost clients.
Compliance, regulations, and standards are more important than ever, but do you really understand what they mean? The answers can help your business become an industry leader.
One dictionary defines compliance as “conformity in fulfilling official requirements.” In other words, being compliant means meeting established standards, rules, or regulations.
In a B2B context, there are many types of compliance:
Most of the time, when businesses use the term “compliance,” they’re talking about regulatory compliance. That’s also what compliance refers to in GRC frameworks.
Regulating is the act of governing or directing, often related to government oversight. Regulations are established rules for specific processes or procedures, such as safety regulations. GDPR in Europe is another example of a regulatory framework.
Regulations can come from several authoritative sources:
Failing to meet regulations can have different consequences depending on the authority. State and federal regulations usually carry fines and penalties — even criminal charges in some cases. On the other hand, industry regulations mainly impact your ability to carry out business operations. For example, ISO certification is voluntary, but the vast majority of manufacturers expect suppliers to be ISO 9001 certified.
It’s common for businesses to use the terms laws, regulations, and standards interchangeably, but each one is slightly different.
Laws are passed by governments and enforced by courts. Regulations are rules created by government agencies and enforced by those same agencies. Standards are established industry norms, usually with rules or examples to follow.
Guidelines aren’t rules or firm requirements. They’re general instructions that offer some wiggle room. Many businesses use both standards and guidelines for organizational policies and operations.
When you create regulations or standards, you establish requirements for employees or suppliers to follow. Compliance is the other side of the coin—meeting the requirements that are outlined in regulations or contracts.
To create effective business policies, knowing relevant government and industry regulations is a must. Compliance and governance go hand in hand.
Regulatory frameworks often leave businesses room for organizational policies. For example, HIPAA requires healthcare organizations to protect against reasonably anticipated information security threats, such as data breaches. Organizations determine what technology and policy measures are necessary to establish the required defenses, such as network monitoring services, VPNs, or encrypted servers.
Similarly, the ISO 27001 cybersecurity framework mandates risk assessments, but it doesn’t specify how often. Many enterprises perform risk assessments on critical data every two or three months. Smaller businesses may hire a cybersecurity consultant once a year.
Not all areas of compliance have the same level of urgency. Larger organizations especially need to identify which regulations to target first. Setting priorities is one of the pillars of compliance management.
Government regulations and legal requirements are always obligatory. So are standards that impact necessary industry certifications. You also need to plan for customer expectations and audits, especially if you’re a government contractor.
Other regulatory frameworks are more complex and take longer to comply with, such as ISO 27001 for cybersecurity. Many businesses start with NIST or SOC 2 compliance instead and work gradually toward the necessary controls for ISO 27001.
One of the most challenging aspects of compliance is getting employees to follow through on the required actions. It’s one thing to say that your organization follows HIPAA standards for device security, such as never leaving network devices unattended. It’s far more difficult to ensure that workers implement guidelines consistently, especially where mobile devices are concerned.
It’s not enough to outline organizational policies and regulations in an employee handbook and call it a day. Some workers struggle to remember foundational cybersecurity practices, such as not clicking on email links. Establish a training program with clear examples of compliance in action, and follow up with periodic refreshers.
Tracking network activity, log-ins, and employee habits is necessary for long-term compliance. Continuous monitoring shows you who is having trouble with regulations and helps you catch potentially severe violations before they get your business in trouble.
It’s possible to automate many aspects of regulatory compliance:
Humans forget. Compliance automation platforms like Compyl don’t. An automatic workflow cuts down on errors and improves efficiency at the same time.
Compyl combines state-of-the-art automation tools with the latest versions of regulatory frameworks. Its monitoring capabilities and trackers help with ongoing compliance, not just initial assessments. Learn how to streamline your chosen compliance framework today.
