By Dr. Frank Gozzo
Sept. 29, 2011
While most companies already have resources devoted to the management of risk, quality, safety, environmental and related topics, bundling those resources in a robust compliance management system is a relatively new trend that is quickly becoming a necessity. Organizations are now discovering that compliance management systems are extremely useful tools that provide evidence of compliance to regulators and also greatly improve their operational efficiency.
Several contributing factors are driving this new trend:
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Regulated Environments Are Increasing In Number And Tightening Their Grip. All industries have regulatory constraints. Whether they are governed by common Department of Labor requirements or more complex FDA-driven standards, the number of businesses that are regulated continues to increase. In addition, there is an “inflation” associated with regulatory climates caused by two primary factors. First, agencies tend to increase regulatory scrutiny on their own (typically after an incident). Second, there is a natural competitive force driven by diverse state, federal or international standards that tends to raise the bar, i.e., everyone needs to meet the most stringent requirement. These two effects result in a definite increase in the regulatory climate – and that regulatory grip is only getting tighter.
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Fewer Inspectors With Greater Oversight. While regulatory environments are increasing, most government agencies lack the funding and/or staffing to provide appropriate oversight of their regulated entities. This trend toward insufficient staffing is only getting worse. Fewer inspectors are now required to keep track of an increasing number of companies in more complex regulated environments. In many industries, in fact, it is not uncommon for new businesses to suffer major start-up delays due to an insufficient number of qualified inspectors.
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Robust Compliance Management Systems Will Be Required. The increasing regulatory trend and reduced staffing has accelerated the need for robust compliance management systems. While some regulators and trade associations have recommended compliance management systems as a voluntary best practice, others have actually imposed these systems upon their members. In addition, a growing number of regulatory agencies are also insisting on sufficient remote access so that inspections can be conducted without the added travel expense. It is clear that robust compliance management systems are now gaining traction and will soon become the norm.