What is compliance monitoring?

Compliance monitoring is the ongoing process organizations use to ensure that all applicable employees are adhering to rules, laws, regulations, and standards outlined for the organization's specific industry, as well as adhering to the internal company guidelines and principles of the organization.

The main goal of compliance monitoring is to find any compliance risks or compliance issues in an organization's business or internal operations. Compliance risks and issues are indicated by an organization not following specific rules, regulations, laws, and guidelines that govern its industry or sector.

Compliance risks can also occur when an organization is not following internal company policies, this can happen in broad terms like with particular company strategies, or on a more micro-level, like when specific employees within a company are not adhering to internal company policies concerning ethics or other important areas.

Both public and private organizations, as well as non-profit and for-profit businesses, and even state and federal government organizations, use compliance monitoring to ensure that their organization remains compliant with all necessary regulations, laws, standards, and principles.

When organizations fail to comply with regulations, laws, and guidelines this can have a negative impact on profits and reputation. Compliance monitoring is meant to prevent or mitigate many different issues related to compliance, some common issues include:

• Corruption or illegal behavior

When an organization stays in legal compliance it makes sure all of its employees, and the company as a whole, adhere to any laws or regulations that apply to its industry. Compliance risks in this area include activities like money laundering, theft, bribery, and embezzlement.

• Breaches of privacy

Compliance monitoring is needed to make sure organizations do not violate privacy laws. Companies sometimes handle extremely sensitive customer or member information, and this data can be subject to hacking, viruses, or malware intended to steal it if organizations don't take the right cybersecurity measures. All companies must take preventative actions here.

• Environmental regulations and laws

Companies also use compliance monitoring to mitigate risks in the area of the environment, this concerns issues such as:

• Pollution

• Environmental damage

• Sustainable manufacturing practices

Organizations are at compliance risk if they engage in any activities that threaten the welfare of the environment, such as using harmful chemicals or substances, and deforestation that results in the destruction of habitats in certain regions.

• Process risks

Compliance monitoring for process risks is often associated with monitoring specific employees of organizations. Process risks occur when an employee or group of employees ignore or don't fully follow established procedures concerning specific tasks.

Regulatory compliance standards and laws are often provided by the federal government or branches of the federal government, like the Occupational Safety and Health Administration (OSHA), or the Equal Opportunity Commission (EEOC). These are just two prime examples but there are often many different governmental contributors to the regulations of an industry.