Are you legally compliant?
It is a difficult question to answer but necessary.
Why is it difficult? Because there are so many Legislations and Acts regulating a number of different things. How do you know which applies to you and what makes you compliant or not?
A lot of unsuspecting business owners have landed up in court because of legal compliance issues – not because they were irresponsible but because they were not aware of their legal duties in the first place.
There is a number of the important Acts below which any business owner in Croatia today will need to comply with in order to be termed “legally compliant”.
Even the smallest of companies must consider their legal compliance.
Not just something for the to-do list of the giant multinationals, legal compliance is the process by which a company adheres to the complex rules, policies and processes that regulate business practice in a particular jurisdiction.
What is Compliance?
Before a Compliance Programme can be established, the organisation must understand what Compliance means to it and its stakeholders.
Legal and regulatory compliance can be defined as the process by which an organisation ensures that it observes and complies with the laws, regulations, policies and codes, external and internal to the organisation. Compliance must become part of the overall business strategy of any organisation’s operation – no matter how big or small. Compliance needs to be a non-negotiable and pervasive practice that is implemented throughout the organisation and performed by all.
An effective compliance programme requires:
- the identification of the relevant laws and regulations applicable to an organisation both internally and externally;
- the identification of the various risks which may materialise if these laws are not followed or complied with;
- the assessment and analysis of how these risks may impact on your business;
- assessing and determining the required and / or recommended actions and controls which need to be implemented to eliminate or reduce these risks;
- the preparation of a customised regulatory matrix of the identified applicable laws and regulations applicable to the organisation, classified according to category and significance within the organisation;
- the identification of departments, business units and subsidiaries and responsible employees within an organisation who have to comply with the identified laws;
- the preparation of summaries of the applicable laws allowing for the comprehension of the objectives, impacts and actions required;
- the preparation of compliance risk assessments and risk registers;
- giving employees access to all the laws and regulations, including summaries and checklists which may be applicable to any organisation;
- the preparation of a generic compliance matrices, self-assessment questionnaires and due diligence checklists;
- the preparation and implementation of recommended policies and procedures, legal registers, and compliance tools; and
- auditing compliance levels and managing areas where non compliance has been noted.
When asking what the steps are for evaluating legal compliance, the only answer is to do your research all aspects, including, among others:
- Data protection
- Health and safety
- Environmental responsibilities
- Financial and accounting requirements
- Employment law
- Tax law
- Advertising regulation
- Corporate law
Why is legal compliance important
When it comes to a business and corporate management, compliance refers to the company obeying all of the legal laws and regulations in regards to how they manage the business, their staff, and their treatment towards their consumers. The concept of compliance is to make sure that corporations act responsibly
What are the types of compliance
There are two areas to consider: internal compliance assures adherence to the rules, regulations, and best practices as defined by internal policies, and external compliance which is the practice of following the laws, guidelines, and regulations imposed by external governments, industries, and organizations.
Who can be external Compliance Officer?
Companies have an obligation to take appropriate organizational and supervisory measures to prevent violations of the law from being committed within the company. Not only large corporations but also small and medium-sized companies have recognized that they have to accept the complex and sensitive compliance issues and cover it professionally.
Petar Petrić, Attorney at Law, Petrić & Kajić Law Firm LLC