Most organisations struggle with the concept of being Compliant by design, while I have for years promulgated the company process and components being comply by design resulting in compliance by design. The article reflects a “compliant by design” approach rather than “compliance by design.” This distinction is important:

Before you start the journey on the Copenhagen Compliance’s approach: The distinction between “compliant by design” and “compliance by design” is crucial because it speaks to the underlying philosophy and practical implementation of compliance within an organization, as well as the long-term sustainability of compliance practices.

  1. Compliant by Design: This term implies that an organization has built its processes, systems, and products in such a way that they inherently meet compliance requirements. It’s about embedding compliance into the foundational design of the system, from the beginning. Essentially, the compliance is automatic and integrated into the design phase, ensuring that every part of the organization is aligned with regulatory, security, and industry standards from the outset.

– Why is this important? The key advantage of being “compliant by design” is that it creates a proactive approach to compliance. By considering regulatory requirements early in the design phase, organizations can avoid costly changes later and minimize the risk of non-compliance. This is often associated with efficiency, reduced complexity, and lower costs over time.

  1. Compliance by Design: While it sounds similar, this approach suggests that compliance is built into the design in a way that focuses on meeting specific regulatory requirements rather than ingraining compliance into the overall architecture of the system or process. It’s about ensuring that the design is aligned with standards, but it may not fully account for all potential compliance requirements from the start. Compliance in this case is somewhat reactive or post-design, where systems are adapted or adjusted after the fact to meet compliance standards.

What are the challenges

Compliance by design may require significant changes or modifications later in the process, often leading to inefficiencies, increased costs, and disruptions in operations. It can lead to organizations simply “ticking the box” without embedding a culture of ongoing compliance and risk management.

 Why the distinction matters:

– Proactive vs. Reactive: A “compliant by design” approach is inherently proactive, ensuring compliance is part of the DNA of your organization’s operations, whereas “compliance by design” is often more reactive and tied to specific regulatory milestones.

– Long-term sustainability: “Compliant by design” ensures that compliance becomes an ongoing part of the organization’s culture and strategy, not just a one-time effort that needs constant revisiting.

– Cost-effectiveness: Embedding compliance from the start typically reduces the costs and complexities associated with making last-minute changes to meet compliance standards.

Copenhagen Compliance emphasizes a “compliant by design” strategy because it not only meets regulatory requirements but also optimizes processes to ensure ongoing compliance without major interventions.

The sustainable and holistic 10 step approach.

  1. Compliant by Design emphasizes building compliance into the core processes and systems from the outset. The focus on simplifying compliance processes and fostering a culture of compliance indicates that the organization is proactively embedding compliance principles into its operational framework.
  2. The mention of cross-collaboration to strengthen risk and control infrastructure further supports this perspective, as it suggests a holistic approach to compliance that integrates various departments and functions.
  3. Additionally, the commitment to advancing compliance advice on digital solutions highlights an intention to align compliance with digital transformation efforts, ensuring that compliance is considered in the development of new technologies and processes from the ground up.

In summary, the approach described is proactive and integrative, focusing on embedding compliance into the organization’s culture and operations, which aligns with the “compliant by design” ethos.

Implementing a “compliant by design” approach can present several challenges for organizations, including:

  1. Cultural Resistance: Employees may resist changes to established practices, particularly if they perceive compliance as an added burden rather than an integral part of their work.
  2. Lack of Awareness and Training: Employees might not fully understand compliance requirements or the importance of integrating compliance into their processes, necessitating ongoing training and education efforts.
  3. Complex Regulatory Landscape: Organizations must navigate a complex and ever-changing regulatory environment, making it challenging to design processes that remain compliant over time.
  4. Resource Allocation: Implementing a compliant by design approach often requires significant investment in terms of time, money, and human resources, which can strain existing operations.
  5. Integration with Existing Systems: Legacy systems may not easily accommodate new compliance frameworks, requiring significant modifications or new technology investments.
  6. Cross-Departmental Collaboration: Ensuring that all departments work together effectively to embed compliance can be difficult, especially in larger organizations with siloed functions.
  7. Data Management and Privacy: Organizations must ensure that their compliance design considers data protection laws and privacy concerns, which can complicate compliance strategies.
  8. Measuring Effectiveness: Establishing metrics to measure the effectiveness of a compliant by design approach can be challenging, making it harder to demonstrate success and continuous improvement.
  9. Change Management: Leading and managing the change process effectively is crucial, as poor change management can lead to confusion and non-compliance.
  10. Maintaining Agility: Balancing compliance with the need for operational flexibility and innovation can be challenging, especially in fast-paced industries.

Addressing these challenges requires a strategic approach that includes strong leadership, clear communication, and a commitment to fostering a culture of compliance throughout the organization.

In conclusion, being compliant by design is a more comprehensive, sustainable approach that reduces risks and enhances efficiency, while compliance by design might be seen as a narrower, reactive strategy that can lead to more challenges down the line.