It might sound simple, but it’s strangely not that easy to accurately define compliance management, or for that matter, explain the importance of compliance management and how it enhances your information security posture. Let’s take some time to do just that and to look at key examples of compliance management best practices, including compliance KPIs (Key Performance Indicator), security incidents, employee training, and incident response time.
In order to adhere to relevant regulations and industry standards, your organisation should play close attention to compliance management, not just as a tick-box exercise, but as a fundamental intrinsic within your business. Implementing compliance best practices will help you to avoid risks, build trust with stakeholders, and maintain legal and ethical integrity.
Understanding Compliance Management
Compliance management refers to the process of developing, implementing, and maintaining practices that enable businesses to meet regulatory obligations. It involves identifying applicable standards and regulations, assessing risks, developing policies and procedures, implementing compliance measures, monitoring and auditing (first internally and then externally) compliance, responding to non-conformities, and continuously improving compliance across your organisation.
The Importance of Compliance Management
Compliance ensures that your business operates within legal boundaries, helping you to avoid penalties, fines, and legal consequences. It also enhances information security, protecting your organisation’s, your employees’ and your clients’ or customers’ sensitive data from unauthorised access, breaches, or cyber threats.
Breaches are more common than one would think or hope. In fact, according to IBM’s ‘Cost of a data breach 2022’, for 83% of companies it’s not if a data breach will happen, it’s when. In 2022, the share of breaches caused by ransomware grew by 41%. Interestingly, AI (Artificial Intelligence) and automation decreased the time taken to contain breaches and organisations that had a fully deployed AI and automation program were able to identify and contain a breach 28 days faster than those that didn’t.
(Forbes)
Compliance management will not only help you to avoid potentially devastating security incidents, it will also help you in building trust with stakeholders, including customers, partners, and investors. Demonstrated commitment to compliance instils confidence in your organisation’s ability to protect confidential information and safeguard the interests of stakeholders.
Overview of Compliance Management Practices
To establish a strong compliance management program, your organisation should follow a set of best practices:
Identifying Regulatory Requirements
To begin the compliance management process, you need to recognise the regulatory landscape that applies to your industry and your geographical location.
Recognising Applicable Regulations
Identifying the specific regulations that are relevant to your business is crucial. These may include industry-specific regulations, such as HIPAA for healthcare or GDPR (General Data Protection Regulation) for data protection.
Understanding Compliance Obligations
Once the applicable regulations are identified, take some time to thoroughly understand your compliance obligations. This involves studying the requirements, guidelines, and obligations outlined by the regulatory bodies responsible for enforcing these regulations.
Assessing Compliance Risks
After identifying regulatory requirements, assess the potential risks associated with non-compliance.
Evaluating Compliance Vulnerabilities
By conducting a thorough evaluation, you should be able to identify vulnerabilities and weaknesses in your current processes and systems that may pose compliance risks. This assessment should consider both internal and external factors that could impact compliance.
Risk Assessment in Compliance Management
A comprehensive risk assessment will help you to prioritise and allocate resources to address the most critical compliance risks. It involves evaluating the likelihood and potential impact of non-conformance and determining appropriate strategies to address risk.
Developing Compliance Policies and Procedures
Once compliance risks have been assessed, you’ll need to develop policies and procedures that clearly outline how your organisation will meet its compliance obligations.
Creating Effective Compliance Policies
Effective compliance policies should provide clear guidance on expected behaviours, processes, and controls to ensure compliance with relevant regulations throughout the business. These policies should be aligned with industry best practices and tailored to your company’s specific needs.
Designing Comprehensive Procedures
Compliance policies contain step-by-step instructions for employees to follow. These procedures should cover various aspects, such as data handling, access controls, incident response, and reporting requirements.
Implementing Compliance Measures
Once policies and procedures are established, you should implement the necessary measures to ensure compliance across the organisation.
Execution of Compliance Strategies
It’s best to execute your compliance strategies by implementing the required controls, systems, and processes outlined in your policies and procedures. This includes configuring security controls, implementing access restrictions, and deploying monitoring mechanisms.
Rolling Out Compliance Initiatives
Once compliance requirements and strategies are defined, you’ll need to effectively roll out compliance initiatives.
Monitoring and Auditing Compliance
Continuous monitoring and auditing are vital components of compliance management to ensure ongoing adherence to regulations and industry standards.
Regular Compliance Monitoring
Regular compliance monitoring involves actively monitoring processes, systems, and activities to ensure they remain in line with compliance requirements. This includes real-time monitoring of data access, system logs, and employee activities to identify any potential compliance issues.
Conducting Compliance Audits
Compliance audits are systematic evaluations of an organisation’s compliance efforts to identify areas of non-compliance and assess the effectiveness of existing controls. Audits may be conducted internally or by external auditors to ensure an unbiased evaluation.
Responding to Non-Compliance
When non-compliance incidents occur, you will need to have procedures in place to address them promptly and effectively.
Dealing with Compliance Breaches
In the event of a compliance breach, make sure that you have incident response plans that outline the steps to be taken. This includes containment, investigation, remediation, and reporting of the breach to the appropriate authorities.
Corrective Actions for Non-Compliance
You should establish a process for implementing corrective actions when non-compliance is identified. This may involve updating policies and procedures, enhancing training programs, or implementing additional controls to prevent future occurrences.
Training and Education for Compliance
Employee training and education are vital to create a culture of compliance within your company.
Importance of Compliance Training
According to Verizon’s ‘2023 Data Breach Investigations Report’, 74% of breaches involved the human element, so it’s vital that you use compliance training to make sure that your employees understand their roles and responsibilities regarding compliance. Compliance training educates employees on the regulations, policies, and procedures they need to follow, empowering them to make informed decisions and contribute to maintaining compliance. One thing to remember though is that, as compliance ‘athlete’ Courtney Sander writes, ‘Training test scores alone do nothing to prevent or detect misconduct.’ Instead, you should determine your own training metrics and remember that training outcomes are far more important than scores or completion rates when it comes to compliance training.
Building a Culture of Compliance
You should strive to foster a culture of compliance by promoting awareness, accountability, and responsibility among employees at all levels. This involves providing ongoing training, communicating the importance of compliance, and rewarding compliance achievements.
Documenting and Reporting Compliance
Accurate documentation and reporting are essential to demonstrate compliance efforts and provide evidence of adherence to regulations.
Record-keeping for Compliance
It’s important that you maintain comprehensive records of compliance-related activities, including policies, procedures, training records, risk assessments, and incident response documentation. These records serve as evidence of compliance efforts and can be referenced during audits or investigations.
Compliance Reporting Guidelines
Establish guidelines for reporting compliance-related incidents, breaches, or concerns. Clear reporting channels enable employees to raise compliance issues without fear of retaliation, ensuring timely resolution and prevention of further non-compliance.
Continuous Improvement in Compliance
Compliance management should be an iterative process, so that you are constantly striving for improvement.
Evaluating Compliance Performance
Regular evaluation of compliance performance will allow you to assess the effectiveness of your compliance management efforts. This can be done through self-assessments, internal audits, or external reviews to identify areas for improvement and implement necessary changes.
Implementing Feedback Mechanisms
Encourage feedback from employees, stakeholders, and regulators to gain insights into compliance challenges and opportunities for improvement. Feedback mechanisms, such as surveys, suggestion boxes, or compliance hotlines, facilitate communication and will help you to refine your organisation’s compliance strategies.
As you can see, compliance management is complex and it’s not merely a regulatory obligation; it’s a vital aspect of maintaining information security and creating trust within your organisation.
By understanding and implementing compliance best practices, such as setting compliance KPIs, responding to non-compliance incidents, prioritising employee training, and continually improving compliance efforts, you can enhance your information security posture and ensure legal and ethical integrity.
