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Every business operates under the scrutiny of both internal and external regulations and stakeholders. While managing day-to-day operations, it is essential to stay on top of what is and is not allowed to avoid the detrimental effects of compliance risk. With legislative and regulatory changes highlighting the importance of compliance, it may be beneficial to your company to invest in a compliance officer. This article will explain:

  • what the role of a compliance officer involves; and 
  • how they are responsible for implementing company policies and procedures.

What Is a Compliance Officer?

A compliance officer, or a compliance manager, ensures that a company complies with its outside regulatory and legal requirements and internal policies and bylaws. They are responsible for ensuring a company’s practices are compliant with any relevant laws, regulations and licensing requirements. They also advise key stakeholders on a range of matters, including: 

  • compliance; 
  • auditing; 
  • health and safety
  • financial and other types of risk; and 
  • legislation.

To be successful, compliance officers must wholly understand the business’ goals and the broader industry standards that apply to it. A compliance officer must also fully grasp the standard business law and surrounding rules and regulations to create procedures and policies to protect the business. Not only will a compliance officer need to know this information, but they must also create a strategy to ensure that the procedures and policies are communicated effectively and understood by everyone within the organisation. 

Ultimately, it is important that compliance policies and procedures become a part of the culture of a company. 

Typical Roles and Responsibilities

Compliance officers are responsible for ensuring their organisation complies with government regulations (domestically and globally, if applicable). Their priority is to avoid mistakes that could result in significant fines, legal consequences and reputational damage. Compliance officers also need to make sure that employees follow all applicable internal compliance policies.

Along with creating a strategy to address any potential issues, compliance officers provide regular reports to management or key stakeholder on the success of a business’ compliance procedures. They also advise management teams on any necessary actions or changes that the company should apply. 

Some of their typical duties and responsibilities include:

  • coordinating and attending meetings with directors and stakeholders; 
  • coordinating and conducting internal investigations into compliance issues;
  • conducting internal reviews and audits to ensure all staff are following compliance procedures;
  • conducting internal risk assessments and identifying, assessing and managing risks;
  • ensuring all company activities, products, policies, and documentation are compliant with company, state and federal regulations; 
  • reporting to board and management on matters of risk, compliance and legislation; and
  • ensuring record management systems are kept up to date.

Importance of a Compliance Officer 

Compliance risk can be complicated to manage as it differs from industry to industry. It also changes with the political and economic environment. While internal compliance may seem easier to manage since it is set up within the organisation, it also is not always straightforward. Therefore, having a dedicated individual responsible for overseeing business compliance can be beneficial for the business.

In addition, a compliance officer can help a business:

  • manage risk;
  • maintain a good reputation within its industry; and 
  • avoid litigation or disputes.

Compliance officers require a strong knowledge of the business and its vision and culture. Likewise, they should understand the specific industry a company operates within and business law in general. Compliance officers are not only responsible for keeping a business’ operations and day to day running ethically and in a legally compliant way. They are also responsible for educating the entire company and instituting practices to ensure the highest possible level of compliance.

Fundamentally, the role of a compliance officer is to ensure a company is conducting its business in full compliance with all relevant:

  • national and international laws; 
  • professional standards; 
  • accepted business practices; and
  • internal standards.

Key Takeaways

Ultimately, a compliance officer can oversee the internal and external environment your business operates in, and assist with your compliance obligations. This role can significantly relieve the burden of compliance risk and allow your employees to focus on the tasks at hand. For more information on this role or other questions about your corporate compliance obligations, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

Is it compulsory to hire a compliance officer?

Hiring a compliance officer is not compulsory under Australian corporate law. However, they play a beneficial role in keeping a business’ operations both ethically and legally compliant. They are also responsible for educating the entire company and instituting practices to ensure the highest possible level of compliance.

What exactly is compliance risk?

As a company, you are bound by the Corporations Act 2001 and your company constitution and shareholders agreement (if applicable). Additionally, you must also maintain full compliance with all relevant national and international laws, professional standards, accepted business practices and internal standards. Breaking any of these laws, rules or regulations creates compliance risk. Consequently, it is a compliance officer’s role to mitigate any potential liability from non-compliance.

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