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The Compliance Curve – are we travelling in the right direction?

October 12, 2018

Sometimes non-compliance can actually be the sign that you’re doing your job well. For example, if you were to discover your portfolio has areas of non-compliance or that certain documentation is out of date. This is a sign that you’re being proactive in your role as responsible person. In this blog, James Bradley examines the impact of non-compliance and what issues most frequently affect UK businesses.  

The identification of non-compliant areas of a business can cause serious headaches for those tasked with ensuring it remains on the right side of the law. Yet without identifying these issues the repercussions only get more serious, not to mention potentially more dangerous. In effect, you’re faced with the strange scenario whereby a state of non-compliance is actually the first step towards being compliant. It sounds paradoxical, but it shows as an employee or service provider that you’re actually doing your job properly.

It’s rare to find an organisation that is wilfully non-compliant, after all those that do will expose themselves to large fines, some of which can put them out of business. Famous examples do exist however. Take Enron, in mid 2000 the company’s stock price was at an all-time high of $90.75 per share, some 18 months later it had plummeted to less than $1 per share. Insolvency soon followed. Why? Non-compliance. The company defrauded shareholders by using less than honest accounting techniques and poor financial reporting to defer its losses. The ‘Enron Scandal’ was so seismic that it precipitated the Sarbanes-Oxley act, a landmark moment for corporate disclosures and financial compliance.

This is of course an extreme case in the commodities sector, but non-compliance is an issue that all businesses share, no matter how stringent their processes. Here in the UK, it’s often workplace health and safety failures that hit the headlines. You need only take a quick look at a business news website to see how often building and workplace related prosecutions occur. I just did a quick search and found that a large healthcare conglomerate has recently been fined £3 million after an elderly patient died from Legionnaire’s disease at one of its care homes. Yes, even in this day and age companies still fail with compliance issues that should be consigned to the history books.

You could be forgiven for thinking that with all these cases building compliance should be fairly straightforward. Unfortunately, that’s not the case. In the UK there are a large number of statutory compliance obligations that building owners and operators have to keep on top of, which makes keeping track of everything very tricky without the right assistance. It’s even more challenging if your business occupies multiple properties or its portfolio is growing rapidly. The greater the growth, the greater the risk can become.

This difficulty can mean that businesses accidentally skip over some of their actions. Worse still, uncertainty around the status of certain tasks can also mean that employees assume everything is present and correct when it actually might not be. While this isn’t as wilfully negligent or duplicitous as Enron, this carelessness certainly wouldn’t go down well with an auditor.

Due to complex and changing nature of regulation, every business will find itself non-compliant in some area at one point or another. Responsible organisations, however, will always double-check their ‘ticked boxes’ because the consequences are too dire not to. After all everyone deserves to be safe.

That’s why we’ve created CATI, an affordable SaaS platform which helps businesses visualise, prioritise and action their compliance obligations more effectively. There’s lots to take care of within a building, but it need not be complicated.