The new era of regulatory compliance---are you up to the challenge?
Headlines today are rife with stories of leading companies that have faced reputation damage due to public product issues such as toys contaminated by lead, pet food containing dangerous fillers, and medications formulated with treacherous levels of poor ingredients. What’s common to them is that the brands of the companies affected were not damaged by their own overt acts, but by those of suppliers … suppliers that did not adhere to regulations, standards, and codes of conduct.
These and other headline producing failures have triggered not only a new era of regulatory compliance, but also a renewed movement of corporate policies addressing issues from sustainability to supplier diversity. The number of controlled/regulated/mandated business requirements, and the related list of compliance documents and credentials, continue to grow globally and now apply to virtually every industry.
Additional Key enterprise Compliance Areas
- Corporate Social Responsibility (CSR) – CSR programs posit that firms have a responsibility to be social and environmental stewards, and that having a positive impact on society and the planet is as important as profit. Failure to have and monitor a corporate CSR program can have significant global headline risk when suppliers commit environmental or ethical lapses and violations regardless of local laws or customs.
- Diversity – Driving procurement dollars to disadvantaged businesses have both social and bottom line benefits. Government incentives designed to promote the growth of small and minority or women owned businesses can enhance your EPS, and the positive impact on community health and economic prosperity benefits everyone. But you can’t always rely on simple self-certification.
- SAS70 – SAS70 certification represents that a service organization has been through an in-depth audit of their control objectives and control activities, which often include controls over information technology and related processes. In today's global economy, service organizations or service providers must demonstrate that they have adequate controls and safeguards when they host or process data belonging to their customers.
- Business Operations – Collecting and managing business operations documents like insurance certificates, 1099/W8/W9, licenses, NDAs, etc. sounds simple, but the administrative burden of manually tracking these documents can become crippling across tens or hundreds of thousands of suppliers. And it’s not just the initial collection. Some may require validation, and many have expiration dates which require renewal tracking and actions.
Today it is imperative that you have the systems and processes in place to mitigate the risk of regulatory compliance across markets both domestic and international. This new era demands the implementation of systems and controls to gather trading partner credentials, monitor internal and external trading activities for compliance, and proactively identify partners and suppliers that are non-compliant. The costs may seem considerable, but the penalties in terms of brand erosion, fines, and prison sentences are much worse.
Aravo can help
Aravo has helped many Global 2000 companies across industries automate and manage their credentials and compliance requirements with built in compliance templates, support for compliance audits, configurable workflows to track credential renewals and new regulatory requirements, and compliance ratings to highlight the most at risk supplier relationships. Aravo has a robust platform that is flexible enough to address your compliance concerns today and into the future.
"78% of Global 2000 companies do not include suppliers in their corporate Code of Conduct, supplier compliance."
2008 Supplier Ethics Management (SEM) Charter Group Study