Compliance, from added value to a strategic necessity. The new role of compliance today

Alegalis - Compliance or regulatory compliance has gained increasing relevance in the business world. This is because adopting good practices in this area allows organizations to avoid sanctions, protect their reputation, and ensure compliance with laws, regulations, and ethical standards. It also allows them to expand their business operations with international companies, which currently require compliance with these programs. This 

set of procedures and policies that companies must implement aims to prevent, manage, and respond to both operational and legal risks. Having a compliance system involves establishing constant internal audit mechanisms, ensuring ongoing oversight of the company’s operations.

From a corporate law perspective, compliance is currently an indispensable risk prevention system. A solid and effective program in this area can directly contribute to business growth and productivity. Implementation of such a program includes activities such as ongoing staff training, the development of internal policies and procedures, periodic audits to detect and correct non-compliance, among other key actions.

The fundamental purpose of these programs is to minimize legal and financial risks, thus ensuring that the company operates ethically and responsibly.

Risk identification and management has become a critical process that no company can ignore. This involves not only recognizing existing risks but also assessing them and anticipating their potential consequences. Among the most common risks are contractual breaches, violations of laws or regulations, litigation, and other situations that can have significant negative impacts on the organization.

Effective management of these risks requires the implementation of specific strategies, such as staff training, the design of appropriate internal policies, and, most importantly, the hiring of specialized external legal counsel.

Currently, it is essential for companies in Guatemala to have prevention mechanisms through an internal compliance program. International regulations, such as ISO standards, directly affect local operations. In fact, as mentioned, many foreign companies currently initially verify whether a local company complies with applicable regulatory requirements to determine the viability of initiating business relationships. Furthermore, the reputational risk associated with legal noncompliance is increasingly relevant, representing a significant threat to business sustainability.

Key elements of an effective compliance program include:

a. A legal and risk assessment.

b. The implementation of a corporate code of ethics.

c. Internal policy manuals.

d. A confidential reporting channel.

e. Regular staff training.

f. The designation of a compliance officer or committee.

The benefits of implementing a compliance system are impossible to enumerate, however, we can highlight:

a. Prevention of sanctions and fines.

b. Protection of managers and employees against civil and criminal liability.

c. Improved corporate reputation, which increases attractiveness to clients and investors.

d. Easier auditing or sale processes for the company.

We can conclude that, ultimately, compliance is no longer an option in the business world, but a strategic necessity for any company that wishes to operate safely, ethically, and sustainably in an increasingly demanding environment. Companies that currently have a compliance program not only mitigate legal and operational risks but also strengthen their organizational culture and increase their ability to stand out in the market. Moving from reaction to prevention is currently what distinguishes market-leading companies.  

Author: Ximena Marsicovetere

alegalis.com