Compliance programs are instruments that guarantee a good internal structure to the organizations that apply them. As a result, companies around the world have been able to build and lead their industries thanks to the transparency and trust that these programs provide. Because the incorporation of these programs in the culture and ethics of the company allows them to prevent and control even financial losses in their activities. In that sense, today we will talk about how to avoid these losses through corporate compliance.
Importance of corporate compliance in companies
These programs function as internal rules and regulations that protect and reduce the risks inherent to the industry and type of business. This means that compliance with them and the monitoring of activities provides organizations with certain protection against unforeseen events. Because these regulations can establish in advance the procedures to be followed in the event of detecting an illegal activity.
In this sense, corporate compliance programs are important, since in terms of trust and credibility in the financial market, they function as insurance or certifications that guarantee such compliance.
How to apply corporate compliance for financial risk mitigation
If the purpose of applying corporate compliance is to mitigate financial risks, it can be applied as follows:
-Diagnosis and identification of activities of the legal entity and the industry.
-Measure the risks inherent to the industry and business model through a legal commission.
-Establish the degree of compliance for the compliance program.
-Create the regulations, code of ethics and other manuals with the pertinent adjustments to regulate the company's activities.
In order to implement compliance programs to avoid financial losses, it is necessary to take into account the legal context of the country where the company is located. Also the sector, scope of the partners, and degree of interaction with the public sector to verify that the practices are in line with local jurisdictions in an effective manner.
Avoid financial losses through corporate compliance
To avoid losses through corporate compliance, it is necessary to be astute and know the profile of the fraudsters. In the case of having one or more people within the company, you must know how to identify them and be clear about how to act in the face of these actions according to the established manuals.
In general, the profile of the fraudster corresponds to employees with more seniority, and who are well aware of the company's prevention mechanisms. So, in order to mitigate the damage they may cause to the company, it is advisable to apply control mechanisms periodically to activities that may seem suspicious. In this sense, constant training in anti-fraud policies can have a positive influence on the company's corporate culture.
Most common financial risks in companies
The most common financial risks are corruption, which encompasses a wide range of activities, from receiving inducements to economic extortion. And it is also common to see crimes associated with the manipulation of financial statements, which is why internal corporate prevention is so important for today's markets. Because business relationships tend to be affected by these crimes or the image of companies related to fraudsters.
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