Since the launch of the compliance reform of the enterprises involved in the case in 2021, corporate compliance has become a hot topic for enterprises.
In the past, corporate compliance was often a matter of concern to multinational enterprises, listed companies and large Internet companies, but the development of the compliance reform of the enterprises involved in the case has made small and medium-sized private enterprises also feel the judicial dividends brought by the reform, allowing corporate compliance to enter the field of vision of small and medium-sized enterprises.
At present, the corporate compliance reform is developing in depth and in practice. At the 2024 National "Two Sessions", Li Shenglong, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and vice president of the Chongqing Municipal High Court, proposed in the "Proposal on Strengthening the Compliance Construction of Private Enterprises" that the establishment of a compliance system covering different entities such as legal representatives, actual controllers, business managers, and all employees, as well as key areas such as product quality, intellectual property rights, environmental protection, and labor and employment, to promote the all-round optimization of internal governance of enterprises.
Li Shenglong told ** that the court found in the trial of criminal cases involving enterprises that the illegal and criminal phenomena caused by non-standard management of private enterprises are more prominent, which leads to negative consequences such as stagnation of enterprise operations, detention of relevant responsible persons, and damage to corporate reputation, which restricts the steady and far-reaching development of the private economy. On the premise of cracking down on corporate crimes, saving enterprises with good economic conditions and development prospects that accidentally embark on the road of crime due to compliance issues is not only a remedial measure to punish criminal offenses, but also the due meaning of implementing strict management and loving policy guidance and continuously optimizing the legal environment for the development of the private economy.
If an enterprise wants to comply with the law and avoid embarking on the road of illegal crimes, it needs professional talents to guide the management and operation of the enterprise. Therefore, corporate compliance professionals are indispensable. In order to solidly promote the high-quality development of enterprises, enhance their competitiveness, and help enterprises achieve stability and long-term success, corporate compliance professionals were officially included in the "Occupational Classification Dictionary" in March 2021 and became a new profession. At the end of 2021, the first professional standard for corporate compliance professionals, the group standard of CEEAS004-2021 "Professional Skills Evaluation Standards for Corporate Compliance Professionals", was released, and the examination of corporate compliance professionals was also carried out at the same time.
What competencies do corporate compliance professionals need to have?
According to the definition of the Occupational Classification Dictionary, corporate compliance management is the compliance control of the legal, financial, auditing, import and export, labor environment, social responsibility and other aspects of the enterprise, with strong comprehensiveness, independence and technology
1.Formulate strategic planning and management plans for corporate compliance management;
2.Identify and assess compliance risks and manage the company's compliance obligations;
3.Identify and assess compliance risks and manage the company's compliance obligations;
4.Carry out corporate compliance consulting, compliance investigations, and handle compliance reports;
5.Monitor the effectiveness of the company's compliance management system, and carry out evaluation, audit, optimization, etc.;
6.Handle compliance matters related to external regulators and partners, and provide relevant policy interpretation services to service users;
7.Carry out corporate compliance training, compliance assessment, compliance publicity and compliance culture construction.
Therefore, the competencies required by corporate compliance professionals can be subdivided into two categories: professional skills and soft skills
Expertise
Legal knowledge: Knowledge of business-related laws and regulations, such as antitrust law, anti-bribery law and related international legal frameworks such as the FCPA (Foreign Corrupt Practices Act) in the United States or the Bribery Act in the United Kingdom.
Risk management: The ability to assess and address compliance risks, including risk identification, risk assessment, risk control, and risk monitoring.
Audit & Monitoring: Design and implement effective internal audit and monitoring processes to ensure compliance for the organization.
Policy development: Develop and update internal compliance policies and procedures to adapt to changes in the legal environment and organizational needs.
Training & Communication: Organize compliance training programs to raise compliance awareness among employees and be able to effectively communicate compliance policies and procedures.
Soft skills
Problem-solving skills: When faced with compliance issues, quickly analyze the situation and find solutions.
Ethical judgment: Be ethical in decision-making, even in the face of pressure.
Relationship building: Build a relationship of trust with business units that makes them open to compliance recommendations and improvements.
Adapt to change: Laws and regulations and industry standards are constantly evolving, and compliance professionals need to be able to adapt quickly to these changes.
Influence & Leadership: Being able to influence others to follow compliance rules and be compliant with compliance awareness often requires some level of leadership.
Compliance professionals with these capabilities are able to effectively assess the compliance environment of a company and make recommendations for improvement to ensure that the company's operations comply with all relevant legal regulations and ethical standards.
How can corporate compliance professionals help SMEs with compliance management?
Corporate compliance professionals play a key role in SMEs by ensuring that their activities comply with legal requirements, industry standards, and internal policies to reduce legal and regulatory risks and enhance corporate reputation. The following are the key steps for compliance professionals in compliance management for SMEs:
Develop a compliance strategyCompliance professionals first need to understand the company's business model, industry characteristics, and compliance requirements, and work with senior management to determine the overall goals and strategic direction of the company's compliance.
Understand and interpret applicable regulations: SMEs often lack the ability to fully understand all applicable regulations. Compliance professionals need to have a deep understanding of laws and regulations, and be able to interpret and apply various regulations for enterprises, such as data protection**, anti-money laundering laws, etc.
Risk assessment: Assess your organization's compliance risks, including market conduct, partnerships, product security, data protection, and more, and determine which risks are the highest priorities.
Develop and implement compliance policies and procedures: A compliance officer is responsible for developing compliance policies and procedures based on identified risks and legal requirements. These policies should be simple and straightforward, appropriate to the actual operation of the SME.
Training and communicationA compliance officer should ensure that employees understand and comply with compliance policies and procedures. This often involves regular training, as well as creating easy-to-understand instructional materials.
Monitoring and auditingThrough regular compliance checks and audits, compliance professionals help companies monitor their compliance status and identify potential issues in a timely manner.
Reporting and improvementThe compliance officer is required to report the compliance status to the management and make recommendations for improvement. If a compliance issue is detected, the compliance officer should respond quickly to help the company resolve the issue and make necessary adjustments to the compliance policy.
Crisis managementIn the event that any compliance issue escalates into a crisis, the compliance officer should be able to assist the company's top management and coping strategies to reduce the company's reputation and financial losses.
Build a culture of complianceCompliance officers should also be actively involved in the formation of a corporate culture that promotes a corporate environment that adheres to rules and values transparency and integrity.
Collaboration and communicationCompliance professionals need to maintain good communication and cooperation with regulators, partners and other relevant parties to ensure timely access to regulatory updates and adapt to changes in the regulatory environment.
For example, for a technology SME involved in cross-border data transfer, the compliance officer may need to focus on data protection regulations (such as GDPR), conduct risk assessments, and train all employees on data security. It is also necessary to design and supervise the processes of data processing and transmission to ensure compliance.
In practice, compliance professionals face challenges such as limited resources, insufficient awareness of compliance among employees, and a rapidly changing legal environment. As a result, they need to adapt quickly and be able to work with resource-constrained environments while leveraging a variety of tools and strategies to improve the efficiency and effectiveness of their compliance efforts.