Last updated on July 26th, 2024 at 02:37 pm
In the trade landscape, following global standards and complying with government regulations are critical elements businesses should be careful about. Private or public bodies set regulations or standards to ensure that the products meet specific technical standards, are suitable for consumption, and act as inputs for various commercial processes like manufacturing.
The government or respective authoritative bodies impose various mandatory rules and regulations depending on the industry. Non-compliance with the regulations or not adhering to global standards might lead to penalties and other stricter punishments for the business.
The higher management of a business, including the CEO and CFO, thus, must be well aware of the various global standards and government regulations the business needs to follow. Having a CFO certification or pursuing CFO training courses is of great help for aspiring CFOs as the course covers the nitty-gritty of various regulations and standards.
Although offering innumerable benefits, government rules and regulations often seem to become obstacles for businesses leading to grievances and complaints about hindered progress. It is crucial to determine if these regulations hamper sectoral development.
Read on to learn how you can navigate the challenges of regulatory compliance to reap the best benefits for your company.
What Is Regulation and Regulatory Compliance?
A regulation can be defined as a law enacted by a government body granting enforcement authority to a regulatory agency. When an organisation is aware of all the laws and regulations it needs to follow depending on its industry and business and aligns with them, it is known as regulatory compliance. These regulations might be set at global, federal, state or local levels.
Corporate compliance and regulatory compliance are often confused as being the same. However, they are quite different. Corporate compliance is about following internal rules and policies to achieve specific business objectives and goals.
The combination of regulatory compliance and corporate compliance plays a pivotal role in ensuring transparency and accountability, determining the ethical framework of the business and driving the business’s strategic direction.
Understanding Global Standards and Its Importance
Global standards can be defined as widely recognised and accepted principles and frameworks that guide businesses to achieve economic, social and environmental goals. To successfully establish and improve reputation, competitiveness and performance in the global market, businesses must integrate global standards into their business strategy effectively.
When a business conforms to international or global standards, it conveys a message of reassurance to consumers regarding the products’ efficiency, safety and environmental benefits. The ISO materials demonstrate the social and economic benefits of global standards.
Stakeholders and decision-makers should be well aware of these standards and implement them in business as needed and applicable.
Benefits of Implementing Global Standards in Businesses
Modern businesses come with various demanding challenges. International and global standards act as strategic guidelines and tools so businesses can effectively deal with the challenges. They make sure that businesses operate efficiently, leading to increased productivity.
Let us take a look at some of the prominent benefits of implementing global standards in a business:
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Opens up access to new markets
International standards help in opening up access to global markets. They also play a crucial role in preventing trade barriers.
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Leads to cost savings
Following global standards in business helps optimise operations significantly. This directly improves the bottom line and contributes towards cost savings.
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Helps increase market share
Businesses implementing global international standards in their practices get a competitive advantage along with increased productivity.
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Provides enhanced customer satisfaction
With optimised and better quality, operations and productivity, customers enjoy enhanced satisfaction from the business products or services with the implementation of international standards.
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Offers environmental benefits
Businesses have become aware of environmental impacts. By following international standards, companies can significantly reduce the negative impacts on the environment.
What Are the Benefits of Regulatory Compliance?
Maintaining regulatory compliance helps the business mitigate various risks like data losses and security breaches. It also helps avoid disciplinary action that might result in financial penalties, license revocations, lost customers and damaged reputation.
Here are some of the benefits of regulatory compliance:
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Protecting the reputation and resources of the business
Noncompliance with government regulations might result in trust issues with the customers and a significant blow to reputation. Severe situations might even lead to your business license being revoked. You will not be able to meet your business goals and objectives. Complying with government regulations helps mitigate these risks and ensures smooth business operations.
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Improving overall business efficiency
Various regulatory compliance protocols need streamlined business processes, structured data storage and regular report generation on business processes and functions. All these work towards improving the company’s efficiency and help minimise costs to a great extent.
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Adjusting and changing with the dynamic regulatory environment
The regulatory environment is highly dynamic, with incoming changes in various regulations at federal, industrial and state levels. Businesses must maintain regulatory compliance by remaining updated on these rules and adapting accordingly.
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Protecting from various threats including cybersecurity threats
Internal and external malware attacks and data breaches threaten businesses irrespective of their industry. Cybersecurity compliance helps mitigate these risks. With this compliance, businesses can simultaneously protect the data privacy of their employees, the company and customers.
Common Business Regulations That Every Business Should Know About
Whether planning to launch a new business venture or running one smoothly, you must know about some common business regulations and standards. Some of them are as follows:
- Licensing and permits
- Employment and labour regulations
- Taxes
- Advertising regulations
- Workplace anti-discrimination and harassment regulations
- Copyrights, patents and trademarks
- Privacy policies and regulations
- Environmental regulations
- Ongoing filing requirements and regulations
- Antitrust regulations, etc.
Summing It Up
The dynamic business world is a highly competitive arena. Government rules and regulations keep changing with time, and businesses must adapt accordingly to remain successful and competitive. Compliance with global standards is imperative for sustainability and reputation.
The top management officials of a company (CEOs and CFOs) must ensure that all regulatory compliances and global standards are met successfully. Non-compliance might lead to various problems and harassment and cause losses to the business from different aspects. A CFO certification or CFO training courses are useful in this regard.
Aspiring CFOs can enrol in Imarticus Learning’s Postgraduate Certificate Programme for Emerging CFOs. This is a specialised finance programme in collaboration with IIM Indore. The course is designed for experienced finance professionals offering a comprehensive understanding of financial management and services.
The programme prepares you for the role of a CFO by enhancing tech-focused, analytical and strategic skills. The course has a progressive approach and covers topics like fintech, risk management, financial technology, business valuation, strategic thinking, and so on. Visit Imartcus Learning for more details!
