A well structured business will have a compliance program in place, complete with company policies, safeguards, and reporting avenues. However, eventually, most businesses will face some form of compliance issue regardless of their efforts to prevent them. In that situation, how do you respond?
Before Anything Else, Don’t Panic
In the event that someone reports a compliance problem in your business, whether it’s a simple violation of company policy or a serious legal breach, it’s important to realize that no compliance plan is foolproof. Unfortunately, these kinds of events are normal, but lawmakers do realize as much.
In addition, the fact that you detected a compliance issue shows that your system is working on some level—if it wasn’t, you might have been completely oblivious to what was going on. With that in mind, the most important thing is not that there was misconduct in your company, but rather what you do to resolve it.
Put simply, don’t panic, and take appropriate action.
Steps to Take after Detecting a Compliance Issue
When you discover misconduct in your company, it’s important to take a systematic approach toward resolving it. The following steps form a guide to doing just that.
1. Get a team together
The first thing you’ll want to do is get a solid response team together. The people you choose will depend on the nature of the violation. For instance, a smaller offense at a minor regional level might require a manager or two, whereas serious legal breaches might necessitate outside legal counsel and professional assistance.
2. Hash out what happened and why
With the right team together, begin investigating the incident. Start with outlining exactly what happened in detail, and get as much information about the incident as possible.
Once you have a clear picture of the event, start digging into why. You’ll want to get into root causes here to determine whether it was an isolated event or a result of deeper systemic issues. Getting to the bottom of why a compliance issue happened will help you take appropriate steps to prevent it later on.
3. Resolve the issue
Once you know what happened and why, take steps to resolve the issue. You might have to decide whether to reverse the effects of the actions that took place, and there may be consequences to deal out to those responsible. In cases with serious legal ramifications, outside counsel is often recommended to make sure you follow the best possible course.
Preventing Future Offenses
After resolving the issue, it’s important to take steps to prevent it from happening again in the future. If the violation resulted from a single individual’s actions independently of your company’s systems, then letting that individual go may be the preventive action you need to take.
However, if there are deeper systemic issues that led to the offense, then you’ll want to review your company’s policies and procedures and make changes accordingly. An update to your compliance plan may be in order as well.
Throughout this process, legal counsel is invaluable. The experience and knowledge of a corporate attorney will help you navigate the process in a way that helps you overcome compliance issues and prevent them in the future.