Practical insights for compliance and ethics professionals and commentary on the intersection of compliance and culture.

Essential compliance tips for small businesses

Owners and managers of small businesses often may not recognize the immediate importance or value of implementing a compliance program. Small businesses, especially new ones, are concentrated on surviving financially, refining their market and/or products, and identifying themselves and their leaders in an appealing and sustainable way. With these priorities in sight, compliance may fade to seem to be an optional function, something that can be started up in the future or only when necessary or required. However, establishing a compliance program from the beginning can actually service all those priorities. There are several compliance values and practices which can be easily implemented to get any small business off to the right start.

  • Create a Compliance Manual: Similar to an Employee Handbook, a Compliance Manual is the one-stop reference bible for the policies and procedures necessary for running daily operations of the business. These can be concrete, such as policies governing equipment use, information systems, or reporting of workplace injuries, or conceptual, such as Code of Ethics, gifts and entertainment guidelines, or anti-harassment policy. The policies should be tailored to the needs of the business. Don’t be intimidated; they can be simple as well as being a work-in-progress. Contemplating what rules are needed to cover a business’s practices can help to define what those are as well as provide the fundamental structure that can always be scaled up in the future.
  • Raise compliance awareness among employees: Employee training is critical for fostering a culture of compliance. This is true even if the business is a sole proprietorship with only the employee-owner to educate. All organizations are impacted by local, state, and/or federal regulations in at least some area of their operations, and all businesses would benefit from a strong perspective on ethics and integrity. Compliance awareness doesn’t require a comprehensive or expensive suite of training materials. It can be as simple as discussing dilemmas about conflicts of interest, learning about and checking for updates from the regulator of the business’s industry, or keeping an eye out on developments with competitors, peers, and stakeholders that may indicate changing legal or risk landscapes or shifts in the market to anticipate.
  • Reward ethical behaviour and compliance adherence: Employee integrity and individual contributions to a culture of compliance should be considered basic factors in evaluating performance across the organization. Indicate to employees in all roles that their conduct matters and is a measurable part of their performance. This is the most powerful, direct way to set a tone that employee culture rewards and recognizes doing the right thing consistently and identifying with strong values that reinforce that as a priority.
  • Consider sustainability in the pursuit of profits: Small businesses are reasonably driven by the intention to make the money they need to earn in order to survive and eventually grow. However, the ends do not have to justify the means – the means by which business is done will be what defines the image of the company. A poor reputation or a business model that does not build relationships will be bad advertising for the business and emphasize short-term survival over long-term success. Clients and products should be chosen with a clear vision as to how they can scale and grow and what identity or purpose they serve now and in the future.
  • Assess risk: Get in the habit from the beginning of thinking strategically about risk. In concert with sustainability, having an accurate and reliable identification and assessment of the risks to the business will help to direct growth and act responsibly on ambitions. Challenging business procedures to brainstorm about risks and consider whether they are being protected against adequately can be straight-forward yet packs a big impact in business planning.

Encouraging sustainable business practices, reasonable risk tolerance, employee integrity, and organizational ethics are all accessible and easy to implement business values. A corporate culture that promotes these genuinely and early in its foundations is well-prepared for business success.