According to the Harvard Business Review, there were around 5 global regulatory changes per day in 2022 and that number is only rising. Legal departments play a key role in ensuring their companies are up-to-date and compliant with rapidly changing global regulatory and compliance issues.
The global compliance umbrella includes legal compliance and regulatory measures, but encompasses staying within bounds across industries, markets, and jurisdictions. To add to the ever-growing compliance landscape, companies need to adhere to regulations surrounding money laundering, tax management, corporate social responsibility, and ESG, to name a few.
Why Global Compliance Matters
It really is a small world, after all, but with big and growing compliance issues. As corporations and companies expand to overseas markets, they need to ensure they’re staying compliant with local and global regulations.
Multinational corporations (MNC) need to abide by local equal opportunity laws, ensure they’re tax compliant, adhere to minimum employee entitlements, and stay within financial reporting requirements.
Staying compliant allows companies to mitigate risks, eliminates the risk of hefty fines, and drives strategic growth. The risks associated with a breach of regulations could result in reputational damage, exorbitant lawsuits, and fines that can be easily avoided.
4 Ways to Maintain Global Compliance
1) Working With Local Partners
The first step to staying compliant across international borders is to onboard partners who work in the specific location. These partners will best understand the legal environment and can make suggestions about the compliance and regulatory space pertaining to the company’s operations. Legal departments can collaborate to ensure that all processes across the organization, no matter where in the world they are, are adhering to local guidelines.
2) Leveraging Legal Technology
With artificial intelligence (AI) compliance tools and software, legal departments can be alerted of breaches in regulations, and help their company stay on track. Legal tech that supports global compliance frees up internal resources so that legal departments can focus on more pressing compliance needs and help their business achieve their strategic objectives.
3) Staying Abreast of Evolving Global Laws And Regulations
In-house departments need to review and monitor the changing global compliance scene often, and quickly. New regulations are introduced frequently, and current ones are updated to suit evolving needs and requirements. By assessing the compliance environment regularly, the legal department can update their organization about changes to processes and workflows.
4) Advising the Company and Implementing Policies
With the meticulous monitoring of the legal department, the company can be advised on how best to proceed with changing compliance and regulatory measures. The legal department may advise changes to processes and tasks across the company. In addition, the legal department can implement policy changes and take the lead on executing the policy and seeing it through.
Companies can set up shop across the world provided they have their legal department by their side, advising them on regulatory measures. Staying compliant ensures that the company achieves their goals and ultimately increases their profits while growing their business.