Step 1 – Know the rules you need to comply with
Regulatory compliance is a significant business issue, partly because of the ever-increasing number of regulations that require businesses to be vigilant about maintaining a full understanding of their duties, partly because of the penalties that can be imposed by regulators, but perhaps most importantly because of the damage to reputation that can result from compliance failures.
Step 2 – Carry out an assessment of compliance risks
You need to have a system to enable you to understand the risk of each of the potential compliance areas to your operations.
Step 3 – Proactively manage compliance
Being able to demonstrate management of the compliance risks to your operations is critical to the smooth operation and avoidance of show-stopping regulatory interventions.
Step 4 – Take all reasonable precautions
Most business-related legislation imposes liability that does not depend on actual negligence or intent to harm. To offset this the legislation often contains a two-part statutory defense. The first step is to set up a system of control.
Step 5 – Exercise all due diligence
To exercise diligence is to operate an appropriate level of caution or investigation prior to acting or making a decision.
In practice, this means that if you have developed a program of checks it must work.
Having a system in place that is not followed is perhaps worse than having no system at all.