Newsletter Sign-up

When it comes to consistency among compliance procedures, corporations are all over the map, according to a new survey of executives responsible for governance, risk and compliance.

The survey found that 84 percent of companies don't use consistent structure and terminology in their policies and procedures. Human resources, finance, legal, and IT departments in different business units, for example, keep policy and procedure documents in different formats.

"Some may be written simply and clearly, but others are often quite arcane," the authors of the survey write. "Worse yet, when employees, executives, or outside auditors have questions about the company's policies or procedures, they have to go on time-consuming hunting expeditions to find the answers they need.

The survey was released in April by Axentis, a Cleveland-based marketing and risk and compliance software services company.

It also found that 92 percent of companies do not separate policies and procedures in a consistent manner. As a result, employees are often forced to absorb the contents of massive documents, of which only a small portion may relate to their specific responsibilities.

This is dangerous, as employees are simply signing off on an all-encompassing document rather than the specific procedures for which they are responsible, and can drive companies afoul of regulators.

In addition, the survey found that 67 percent of companies do not consistently track policies against the regulatory requirements or corporate mandates that drive them, and 64 percent of companies lack a consistent way of communicating procedures to employees.

At many companies, employees are informed about compliance-related procedures through hard-copy documents, e-mails, intranet Web sites, and verbal communications. The plethora of channels only confuses recipients, according to the survey's authors, who recommend that firms stick with a single, automated system to distribute and track compliance materials.

"Such a system reduces confusion among users, since it provides a standardized look-and-feel and a methodical approach for all compliance-related communications," the authors write.

June 1, 2007

Copyright 2007© LRP Publications