How To Avoid These COO Compliance Mistakes

A Chief Operating Officer (COO) must track every part of the business. However, compliance is one of the most critical areas to pay attention to. If you get it wrong, your organisation could face severe consequences. In 2023, the total amount of fines from the FCA was £53,354,600. This figure could be higher in 2024. 

So, how can you future-proof your business and avoid potential compliance mistakes? This article highlights some common compliance mistakes. Read on to discover the key areas and help prevent costly errors for your business. It can save you time and stress as a COO and boost your compliance strategy.

1) No Understanding of the Regulatory Landscape

One of the primary responsibilities of a COO is ensuring regulatory compliance. This area is critical to your role and can reduce the risk of fines and reputational damage. Also, regulatory changes can impact operational processes. A proactive approach can prevent disruptions and inefficiencies in the business.

Strategies to Keep Abreast of Regulatory Developments

Here are a few things you can do to help you stay on top of the shifting sands of the regulatory landscape:

• Consult with regulators 

Create a direct line of communication with regulators and industry associations to access updated information.

• Utilising networks 

Engage with your networks and associations to understand how other COOs adapt to regulations.

• Monitor regulatory bodies 

Subscribe to newsletters, reports, and press releases from relevant government agencies and regulators.

2) Lack of a Comprehensive Compliance Framework

You’re setting yourself up to fail if you don’t have a comprehensive compliance framework. It helps you to manage your organisation’s operational risks. Also, you can align your activities with internal policies, regulations, and standards. For example, a robust compliance framework can help you:

• Match your company’s growth strategies with regulatory frameworks.
• Improve reporting with clear accounting standards and auditing guidelines.
• Promote a positive culture of integrity and accountability.
• Protect the company image.

Your company could also implement frameworks like ISO 31000 or COSO ERM. These frameworks can help you identify, track, and assess regulatory risks.

3) The Impact of Inadequate Training and Education 

Having the right compliance staff is essential to meeting your compliance requirements. As rules and regulations change, your staff must receive regular training. It is also vital that your compliance staff have the proper compliance education. Otherwise, your company might have severe compliance issues.

If you’re unsure if your compliance team is the best it can be, you must do an assessment. Immediately identify any gaps you have in the team as soon as possible. It is best to speak with a specialist recruiter for compliance talent. It will save you time and help you fill those urgent compliance gaps.

At Kohort Recruitment, we have extensive experience sourcing CASS, compliance, and risk talent. Recruiting specialist compliance roles might seem complex and challenging in such a competitive market. Our professional approach to compliance recruitment will give you the knowledge you need. 

4) Using a Reactive Instead of Proactive Approach

You might have heard it all before, but this advice is critical. If you let compliance manage you, your company could be in trouble. Don’t make the mistake of waiting for things to happen. If you do, your business might reach the point of no return. A proactive compliance strategy can help you:

• Predict and respond to regulatory changes
• Be better prepared for emerging risks and new market opportunities
• Encourage a culture that promotes compliance

You can also try doing these seven things to create the best company culture in your business:

1) Clear communication from the top on compliance expectations

2) Tailored compliance training for different departments

3) Development of clear, accessible compliance guidelines

4) Reward systems to recognise compliance adherence

5) Implementing confidential whistleblower mechanisms

6) Create forums for compliance discussions to share best practices

7) Assign a team or individual responsible for compliance oversight

5) Neglecting Technology Integration

Another area where compliance mistakes happen is with technology. Make a point of using regulatory technology (RegTech). It will give you real-time updates and analysis of new regulations. RegTech can help you stay ahead of requirements and avoid compliance mistakes.

Staying with old legacy technology will continue to hold back your company. Embracing the latest compliance tech will make all the difference. It’s the only way to maintain data security, privacy, and ethical standards. As a COO, you can then be confident your company is taking a proactive approach to compliance.  

A recent PWC survey showed that 86% of CEOs were increasing new technology investments. COOs understand technology is vital for long-term business success.  However, allocating some of that investment to compliance technology is a necessity. 

Follow These Steps Before Making a Compliance Integration

Here are a few example steps to follow before any integration:

Step 1 - Create a plan for the integration that covers every integration stage.

Step 2 - Understand the compatibility requirements of each system or process.

Step 3 - Do data mapping from the beginning so the data transfers smoothly.

Step 4 - Check security throughout the integration to avoid compliance issues.

Step 5 - Ensure all stakeholders are involved so everybody has a say.

6) Inadequate Risk Assessment and Management

As mentioned earlier, there are compliance frameworks you can use to help you. It would help if you viewed risk assessment as a cornerstone of compliance for your business. Risk assessments enable you to identify, analyse, and prioritise any risks. Here are some reasons why risk assessment and management is so critical:

• Resource Allocation 

Once you know the likelihood and impact of risks, you can allocate resources to minimise losses and ensure compliance.

• Proactive Identification 

You can anticipate potential risks that might cause regulatory breaches and implement preventive measures.

• Continuous Improvement 

Your organisation needs to perform regular risk assessments, which helps you create a culture of continuous improvement.

• Regulatory Requirement 

Many industries are legally required to do risk assessments to stay compliant with government regulations and standards.

Futureproofing Compliance for Long-Term Success

As a COO, future-proofing compliance in your organisation is a priority. A strategic and proactive approach to compliance will help you avoid compliance mistakes. You can also create a solid compliance team ready to handle compliance challenges. Follow the areas in this article and make compliance part of your company culture.

Are you looking for fresh, talented compliance staff for your business? Email me at Kohort Recruitment, gareth@kohortrecruitment.com, and I’ll help you future-proof your compliance team.

#COO #compliance #recruitment #compliancerecruitment

Sources:

2023 Fines - FCA

ISO 31000 - ISO

COSO ERM - COSO

7 Reasons Why Specialised Recruiters Secure Top CASS Talent - Gareth Foulkes/Kohort Recruitment - LinkedIn Pulse