On one hand, the compliance function is vastly different from any other in an organisation. It is a complicated function, highly dependent on others within the organisation for success, and it addresses a wide variety of highly specialised issues. On the other hand, it shares many of the same issues of any department with complex processes that extend deep into the organisation. Among these shared issues is the balance between centralisation and localisation of key processes.

The decision regarding what to keep consistent throughout and what to customise for specific offices or regions is an important one with many ramifications. Done well, a compliance programme is very effective and efficient. Done poorly, disaster can result. Generally, there are two primary reasons for localising compliance processes: legal requirements and efficiencies.

The first is the most obvious and must always be considered, particularly by multinational organisations. To the extent a process is allowed in the country in which a company is headquartered, but illegal in other countries in which it has operations, localisation is critical. Policies and processes must have at least this amount of flexibility.

This then leads to the second reason – whether localising certain compliance processes makes a compliance programme more efficient and effective. This is a far more complicated decision.

The ‘what’ and the ‘how’

In making this decision, it is important to distinguish the ‘what’ from the ‘how’. The ‘what’ refers to the underlying principle or concept, often expressed in the form of a policy. Compliance concepts should not vary from one site or region to another. Consistency here is important.

Oct-Dec 2019 Issue

Society of Corporate Compliance and Ethics (SCCE)