3 minute read
Regulatory Change Management (RCM)
Regulatory compliance is essential for safeguarding consumers, businesses, and the broader economy. Failing to comply not only risks harming your business reputation and brand, but exposes your organisation to hefty fines, the possibility of termination of your business, or even a prison sentence.
Maintaining a culture of regulatory compliance demonstrates your commitment to responsible practices, builds trust with stakeholders, and ultimately safeguards the long-term success of your business. It’s also an essential component of any well-managed, forward-thinking organisation.
Why RCM is Essential
- Flexibility – Laws and rules change frequently, so a structured approach and systematic process is key
- Mitigating risks – Non-compliance leads to fines, damage reputation or even time in prison
- Consistency and preparedness – Effective management prevents risks from escalating
Changes are constant within the business world, as compliance regulations advance and introduce new obligations and potential risks.
As an organisation, you must stay alert to these dynamic changes and adapt practices and ways of working to align with new or revised regulatory requirements and mitigate associated compliance challenges.
Six Steps of the RCM Process
Identifying the Change
Change updates can come in different forms including laws, government agency updates, speeches, and blogs. Then to complicate things further, these updates are published in various types of media from government and regulatory websites, news articles, to social media posts.
There are independent analysts and effective tools available for identifying, monitoring and automating these changes. These tools can send you email alerts, which enables you to track the exact information impacting your business.
Impact Analysis
Once you’ve established any new or amended rules that are applicable to your industry, the next step is to determine how these regulatory changes may affect your organisation.
To assess the impact, consider:
- What products, services, or business activities will be affected
- Which systems have connections to the affected products and services
- If your company will need new policies or make changes to current ones
- If your company will need new procedures or amend current ones
- Any other current policies or procedures, that might be impacted and may need to be adjusted to ensure complete compliance.
- Any other dependencies such as a specific department, or supplier that the changes could affect
Responsible Parties Analysis
Change management is rarely a one-person job, so it’s important to identify a team of people that can manage the change effectively from start to finish.
Choosing the right people is crucial, they should be willing to accept change, have relevant expertise, take responsibility and be accountable for specific change tasks, to reduce confusion during the implementation process.
As stakeholders, the board of directors and senior management also play a key role in overseeing the change management process. They need to be involved in strategic decisions, provide guidance to the change management team. They play a key role in communicating the change to the organisation, endorsing the change, and showing visible commitment, which is crucial for buy-in and successful implementation.
Your Legal Obligation
Organisations need to watch closely for changes in regulations and put strong compliance measures in place to avoid breaking the rules and avoid hefty fines.
