We Care Product Best Quality

Renato Thé

The author is Compliance Director, UGP Brasil, Chicago, USA

19

January 16, 2020 · 6 min read •

The marketplace is comparable to a jungle where we are animals. Sometimes humans can’t understand animal behavior, and we can’t understand each other either! Being the most complex on earth, humans need something to regulate transactions and behaviors.

An example of this is setting a trading limit. Some questions may arise at any time, such as: How far does a trader’s limit go? Is the supplier honest? Will I feel cheated on after the negotiation?

Is it possible to have a win-win negotiation? The business world is changing fast. Machine learning is being used in no matter what kind of business. Data is used more now than in the past. Competitors are strong and dangerous. But you, how do you feel in the middle of this jungle? Do you feel comfortable negotiating with everyone? Maybe the answer could be – yes! But is it true or is it a false sense of being saved?

In addition, the business environment is surrounded and regulated by laws, meaning that companies must be careful to respect customers, competitors, marketplace, partners, international rules and more. It is not easy to run a company with many variables.

This is where the Integrity Compliance Program (ICP) comes in! The tool is not limited to regulating transactions and behaviors. This can go further by offering and guiding companies an alternative to increasing their profits in an uncontaminated environment by protecting the values ​​and principles that drive the relationship.

The Compliance Costs

The compliance strategy “check the boxes” is a little part of ICP that, used alone, can do long-term harm to companies. The concept of ICP is beyond only checking if the activities are being done well and efficiently. Understanding compliance as a “fire wall” is also wrong. The correct concept is to protect all system surrounding the business.

In short, the concept of ICP is beyond verifying that activities are being performed properly. The right concept is going beyond that. The goal is to protect all environment systems surrounding the business, avoiding fines, frauds and misconducts.

Implementing the ICP can be expensive in terms of price because its complexities are many. All the company is involved from the top to the bases, from the suppliers to the partnerships. Training is necessary to everyone. Independent monitoring system need to be developed and a great Integrity Compliance Program’s implementer is essential.

The ICP involves at least three main areas – Internal Audit, Risk Management and Corporate Governance. Thus, the expenses to have a good ICP is justifiable. Toshiba provides a high-profile example of how a company can lose money when lacking ICP practices. The company underestimated its costs and overestimated its profit by at least $1.2 billion. These “accounting inconsistencies” have already cost the company its president and several members of its executive
board.

Not having a good ICP can also increase the risk and the potential for regulatory action. The Department of Justice ordered First Bank of Delaware to pay a $15 million penalty to the Treasury and up to $500,000 in consumer claims related to Internet fraud and misconduct. A stringent ICP
standard within the financial institution could have prevented the catastrophe.

There is no price range for implementing an ICP. It all depends on the program and how extensive it is. Certainly, lacking ICP is more expensive than having it. Preventing problems is part of its benefits while increasing the company’s profits, as the system suggests good opportunities to invest and trade. Furthermore, the company gives a good sign of honesty.

Integrity Compliance Program – Tool of Success

While ICP is complex, it’s possible to grow while improving compliance function. These three approaches can help your company maximize profits while staying compliant:

1.A good Corporate Governance: Corporate governance is the system of rules, practices, and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company’s many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community. Since corporate governance also provides the framework for attaining a company’s objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

2.Known Risk Management: Enterprise risk management is a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.

3.Audit Internal: Internal audits evaluate a company’s internal controls, including its corporate governance and accounting processes. They ensure compliance with laws and regulations and help to maintain accurate and timely financial reporting and data collection. Internal audits also provide
management with the tools necessary to attain operational efficiency by identifying problems and correcting lapses before they are discovered in an external audit.

Conclusion

ICP is a methodology designed and managed to get the entire organization and stakeholders working together in one direction – to protect business while enriching operations. The environment surrounding the company is very important to make fair money.

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image courtesy: Pixabay

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