Jun 24. 2020

Is compliance turning into a checking the box exercise?

Is compliance turning into a checking the box exercise?

One must have noticed over the years the increasing number of regulatory compliance requirements. However, recently there is enhanced pressure, especially in the US to loosen some of these regulatory regimes.

Overall, a fine balance has to be stuck between a “laissez-faire” approach to regulations vs. overregulation.

Symptoms of under-regulation

Some of the concerns, raised by consumer groups and standard-setting bodies, about missing and/or inadequate regulations are:

  • Enhanced risk of abuse via loopholes and even outright fraud
  • Inadequate enforcement of certain regulations like antitrust creates fundamental imbalances within the economy such as: oligopolistic structures at the expense of consumers and employees
  • Excessive number of litigations due to inadequate protection of consumer rights…

Symptoms of over-regulation

Some of the concerns raised by various employers regarding over-regulation are the following:

  • SMEs struggle both financially and operationally to meet excessive requirements
  • SMEs are at a competitive disadvantage compared to large corporations to ensure compliance
  • Takes up too much time and adds excessive “dead weight” to the entity
  • Stifles creativity …

Even if, no over or under regulation seem to be present, economies are vulnerable to Checking the Box or JFS “Just for Show” compliance activities.

What do I mean by Checking the Box or Just for Show compliance?

This type of compliance approach is driven by “black & white” decision making using checklists with limited professional judgments.

The tell-tale signs of checking the box compliance are:

  • Numbers game i.e. showing a high number of employees, involved in compliance without the depth of specialized knowledge and experience
  • Conflicting mandates under the same roof, where sales vs. enforcement of regulatory compliance battle it out
  • Corporate scandals are practically non-existent thus “painting a perfect picture”
  • Missing/inadequate or vague requirements for professional qualifications
  • A tendency to differ accountability
  • Ticking all the boxes i.e. all or nothing decision making, which hinders professional judgment…

Even if, no over or under-regulation seem to be present, economies are vulnerable to Checking the Box or JFS “Just for Show” compliance activities.

What “Checking the Box” indicators, if any have you encountered?

 

If you like my post, Do not forget to give Thumbs Up and post your comments.

#compliance #regulations #regulatoryframework #framework #regulation #governance

0 0

Leave a Reply

Your email address will not be published. Required fields are marked *