Why Small-to-Medium Enterprises Find Regulatory Compliance So Difficult

published on Compliance Management, Legal Risk Management, Legal Technology

Small to medium enterprises (SMEs) make the world go round. Collectively they comprise about 99% of businesses in all countries, so they are a significant element in the global economy, despite that they’re often left out of the spotlight. However, just because they are smaller in size than their global conglomerate counterparts, doesn’t mean that they are less at risk for becoming the victims of corruption and ethical breaches. Employees of SMEs who do not understand the current anti-corruption laws become a corporate liability with likely costly penalties. These days, regulatory organizations are coming down hard for even the slightest infractions, creating headaches for SMEs.

The current situation:

Unlike large corporations, SMEs don’t have the financial resources to train employees adequately on compliance issues. According to the 2014 Anti-Bribery and Corruption Benchmarking Report, 37 percent of global companies do not take any measures at all to provide anti-corruption training to their entities, such as business partners, SMEs and suppliers. As far as anti-corruption is concerned, SMEs do not have sufficient resources to offer anti-corruption training for employees, which poses serious potential financial and reputation risks for SMEs. Furthermore, SMEs must navigate a sea of regulations, and find it difficult to keep up with the volume and number of frequent changes being made.

Effacts-Blog-Why-SMEs-Find-Regulatory-Compliance-So-Difficult

The solution: cloud-based solutions:

SMEs can track their regulatory processes and ensure they are in compliance with local laws with the compliance management module from Legisway, the all-in-one legal platform. With the cloud-based system, SMEs can mitigate risks and costs associated with corruption in compliance with international anti-corruption legislation. SMEs that use Legisway are able to reduce costs and work more efficiently because their documentation is stored in a single platform. These tools allow SMEs to conduct due diligence. Since 90 percent of all corruption cases occur with third-party partners, due diligence is clearly important to avoiding corruption. Where security is concerned, documents are kept safe and secure and can be accessed any time. Legisway provides a full audit trail, which tracks user access. The compliance management module tracks regulatory processes and allows users to receive alerts well ahead of time, so missing a regulatory deadline is a thing of the past.

Takeaway:

Across the globe there has been a dramatic increase in the number of anti-bribery laws, partly because stronger legislation has been passed by key countries like China and Brazil. The biggest obstacle to SMEs is that they are overwhelmed by the sheer number of regulatory compliance issues, and do not have the resources to combat them effectively. The danger is that SMEs take action only once a regulatory breach has occurred. By using Legisway, SMEs can take a proactive stance to compliance, allowing them to alleviate risks and stay in control of their legal affairs.

Source: http://info.sourceintelligence.com/acton/form/9578/00ac:d-0007/0/index.htm