A good governance and compliance program sets the foundation for meeting any organization’s compliance and governance objective. When done right and on time, this proactive approach can help you minimize any reactive incident response.
Although governance, compliance, and risk are often looked at as separate functions, there is an interlinked connection between the three. While governance outlines the strategy and serves as the guardrail for specific business needs, compliance ensures adherence and monitoring controls of specific governance requirements.
No matter how complex or simple your governance and compliance programs are, there’s always scope to scale them up, especially when you are a high-growth company.
Here are some tips to help you start scaling up your governance and compliance program. Remember, the foundation of scaling up lies in setting up your governance on objectives and capabilities. Automate compliance monitoring and responses and involve risk context while making decisions.
As the organization grows, it needs to change its compliance outlook from “passing the audit” to continuous and integrated compliance.” This change in outlook is crucial because, without this transition, it’s not possible to scale up the compliance efforts. For example, if your compliance efforts are piling up yearly without the increase in headcount, know that there are issues with your compliance scale-up. If your team is suffering from audit fatigue and feels they are spending more time on auditing and less time in operations, it’s time to relook at your compliance program.
Begin with monitoring your compliance program with existing policies, security controls, and industry standards. Work on unified control and cross-control mapping. Consider future business requirements and roadmap for framework, tech stack selection based on the requirement, automate evidence collection, manage compliance risks, bring in oversight and change management and update regulatory changes.
To scale up, begin to automate control monitoring and reporting.
As high-growth companies expand their operations and navigate increasingly complex business landscapes, scaling a robust risk management program becomes a critical imperative. While growth brings exciting opportunities, it also exposes organizations to a myriad of risks that can potentially impede progress. Effectively scaling risk management entails a strategic approach that aligns with the company’s evolving needs and objectives. Here are key considerations for high-growth companies looking to scale their risk management program:
1. Holistic Risk Assessment: Start by conducting a comprehensive risk assessment that encompasses all aspects of your organization. Identify potential risks in areas such as operations, finance, compliance, cybersecurity, market dynamics, and reputation. Prioritize these risks based on their potential impact and likelihood.
2. Risk Governance: Establish a clear governance structure for risk management. Define roles and responsibilities for risk owners and ensure that there is a top-down commitment to risk mitigation strategies. This includes executive leadership, who must lead by example in embracing risk-aware cultures.
3. Adaptability and Flexibility: High-growth companies are agile by nature, and their risk management programs should reflect this agility. Be prepared to adapt risk management strategies quickly to address new risks that emerge as your company expands into new markets or adopts new technologies.
4. Technology Enablement: Leverage technology and risk management tools like VComply to automate and streamline risk assessment, monitoring, and reporting processes. Such tools enable better visibility into risk data and help make informed decisions.
5. Compliance and Regulatory Adherence: As your company grows, regulatory and compliance requirements may become more complex. Ensure that your risk management program includes mechanisms for tracking and adhering to evolving regulations.
6. Internal and External Communication: Effective communication is vital. Keep your stakeholders informed about the company’s risk management efforts, including shareholders, employees, and customers. Transparent communication fosters trust and confidence in your organization’s ability to manage risks.
7. Continuous Monitoring: Regularly review and update your risk management program to reflect changes in the business environment. Consistent monitoring and reporting enable you to identify emerging risks and mitigate them proactively.
8. Talent Development: Invest in developing a skilled risk management team. Equip your employees with the knowledge and tools they need to identify, assess, and manage risks effectively. This is especially crucial in high-growth companies where risk exposure is dynamic.
9. Insurance and Risk Transfer: Evaluate insurance options and risk transfer mechanisms to mitigate the financial impact of certain risks. High-growth companies often have more resources to allocate to such strategies.
10. Long-Term Vision: Ensure that your risk management program aligns with your long-term strategic vision. The program should support the company’s growth goals and adapt as the company evolves.
Strong corporate governance practices foster a company culture built on high integrity, accountability, transparency, fairness, and responsibility standards. It should be an amalgamation of a strong board structure, independent directors, board reporting, procedures and processes, and strategic direction.
For example, the board’s responsibility is to approve all the corporate strategies, appoint a chief executive officer, and oversee the complete operations of the organization while managing and assessing risks. Thus, the board is responsible for setting the “tone” for ethical conduct within the organization.
Next comes the management that implements the corporates strategies and operations under the supervision of the board. The management is responsible for implementing the strategy and operations under the board and audit committee supervision. It is responsible for creating financial statements and keeping the investors up-to-date about the company’s financial conditions and risks.
The audit committee plays a crucial role in managing the relationship with the external auditor and also keeps a tab on the financial statement, internal controls, financial reporting, etc.
Different committees take care of vital aspects of the company. The corporate governance committee needs to take a leadership role in shaping the organization’s corporate governance. It ensures a diverse representation on the board who can meet the company’s needs. On the other hand, the compensation committee develops and conducts the compensation process and policy in the company.
The board and the management team need to constantly communicate and stay with the shareholders on issues that can affect the company’s interest.
Learn how VComply can help you in your audit management.
Knowing what the challenges can be while scaling your governance and compliance program will help you stay a step ahead and empower you to react proactively to certain situations.
Here’s an intriguing story of Costa Coffee and how the brand scaled up and strengthened its compliance management processes across locations using VComply’s GRC solution without adding additional headcount! Read on!
A little introduction about the customer
Costa Coffee, a customer of VComply, is a British coffeehouse that Coca-Cola acquired in 2019. Costa Coffee’s operations include a leading brand, nearly 2400 stores, 4000 retail outlets with highly trained baristas, a coffee vending operation for the home coffee format, and a state-of-the-art roastery. The company serves several thousands of people every day and understands the strong need for compliance and governance to run its operations smoothly.
Costa’s challenges in scaling up its compliance program
However, there was a big hurdle for Costa to scale up their compliance program. With stores across 31 stores and more than 18,400 employees, Costa was struggling with its manual and siloed approach to its compliance program.
Each unit had its separate operations, working in silos. There was no coordination between outlets, with limited visibility of compliance risks. Moreover, the team at Costa was completely relying upon spreadsheets for compliance management, which led to data duplication. All these together made it challenging for Costa to analyze risk and compliance issues.
The solution
That’s when VComply helped Costa to streamline and scale up its compliance program. The platform helped the Costa employees to work in collaboration with different departments.
VComply’s reporting capabilities enable compliance teams to slice and dice compliance and risk data from different units. The key reports and dashboard data helped them generate relevant information and make informed decisions.
With an automated approach, teams could spend more time analyzing the compliance and risk data and help make faster and better decisions. There was no need to create controls separately for each framework, and they could entrust VComply’s pre-built controls, especially SOX controls, to stakeholders and track them.
The outcome
As a result of this collaboration, Costa reduced its compliance issues by 80%, increased timely task completion by 85%, and saw a 100% increase in employee accountability.
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