To monitor the success of your compliance management, it is essential to have the right compliance indicators for each activity.
A company should choose those that make the most sense for its activities, but there are some that serve as good general performance metrics.
Below you will find five tips on indicators to evaluate your compliance policy and discover how to manage them easily and securely.
What are compliance indicators?
Before choosing performance indicators, it is always good to emphasize what they are and how they present themselves within a company.
A compliance indicator can be defined as some data that points to the result of a policy/action of the compliance system.
You can think of these indicators as KPIs, but specifically for compliance.
For example, just as a sales KPI shows the sales team’s performance, a compliance indicator shows whether your compliance policies and guidelines are working.
Therefore, a company can have a wide variety of compliance indicators. Basically, if information is valuable for understanding your company’s compliance, it can be adopted as an indicator.
However, pay attention to the number of indicators and how they will be collected/analyzed. After all, it is useless to have dozens of indicators that make data collection difficult and time-consuming, and their analysis confusing and inaccurate.
And why are they important?
It may seem exaggerated and even confusing that in addition to defining your compliance policies, you also need to choose indicators for them. But this care makes all the difference in the efficiency and security of the operation.
Again, let’s go back to the previous example. If a company has no way to monitor the number of sales, it cannot:
- know if it is selling a lot or a little;
- analyze if it needs to increase or decrease its production;
- evaluate whether the sales team’s performance is good or bad.
And these are just some of the negative effects of not having this control.
Now imagine the same scenario within the compliance sector… It even gives you chills, right?
That’s why you need to ensure that your company not only has compliance indicators but also chooses those that will maximize the benefits of this continuous control.
In this scenario, relevant indicators help your company evaluate the efficiency of all compliance actions and standards and measure their level of adoption and understanding. This is essential for conducting a good compliance audit, for example.
In addition, they serve as a database for more strategic and accurate decisions and help build a plan for continuous compliance improvement.
5 compliance indicators for an efficient and agile operation
Now that you better understand what compliance indicators are and why you need to keep an eye on them, it’s time to learn about five tips on criteria that can guide the evaluation of the area within your company.
But don’t forget that these are broader suggestions. In addition to them, you also need to analyze your market, the specifics of your sector, and the regulations that apply to it.
Then, based on that, choose more indicators. Thus, you will have criteria that complement and strengthen your compliance policy.
1 – Number of incidents
This is often the first and most important of the compliance indicators. And the reason is quite simple: it gives a general idea of whether your policy is being applied.
If the number of non-compliance incidents is high, this is a clear warning sign.
So, it is necessary to investigate thoroughly and understand what needs to be done. Some measures that can solve this are the reformulation of the compliance system, reinforcement of training, and hiring a QMS (Quality Management System), among other measures.
2 – Number of reports via internal channel
An indicator that is usually accompanied by the previous one. Of course, not every report becomes a non-compliance occurrence, but the volume of reports points to some factors.
The first is whether there are gaps for non-compliance that are happening excessively (of course, if the reports are valid) and the type of occurrence.
In a second moment, evaluate if people really understand what a case of non-compliance is and, in addition, if they know how to use the reporting channel correctly.
3 – Time and resolution rate of occurrences
It is useless to evaluate the volume and types of non-compliance occurrences if you do not also understand how their resolution is going.
Therefore, include in your compliance indicators the resolution rate of these cases, as well as the average time it takes.
Thus, you understand if your company is addressing all reports on time that minimizes negative consequences. This also increases transparency and demonstrates the company’s concern with overall compliance.
4 – Training and questionnaire adherence
Although compliance work is managed by a specific sector, it is the duty of everyone in a corporation. And for them to understand this, it is necessary to provide moments of training and knowledge exchange.
In addition to organizing these training sessions, it is also important to measure their adherence. In other words, how much employees are participating, engaging, and understanding during these moments.
To quantify this indicator, use feedback forms and conduct periodic tests on the training.
5 – Third-party compliance evaluation
Finally, do not forget that a good compliance policy is not limited to those within your company but also external organizations that relate to it. This applies to suppliers, partners, investors, among others.
Define criteria that must be met by these external partners to prevent your company from being affected by non-compliance from other companies.
How to easily control compliance indicators?
Despite having a direct impact on the success of the compliance policy, many companies end up not monitoring indicators related to this strategy.
This happens because many companies do not have an efficient, easy, and secure way to monitor the indicators. Therefore, they are subject to failures and, consequently, legal sanctions related to them.
To prevent this from happening to you, the best option is to have a quality and compliance management system, such as SoftExpert Suite.
With it, you can not only record compliance indicators but also automate various tasks and facilitate their management.
