4 Necessary Elements of a Compliance Management Framework

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Your compliance management framework is a vital piece of your overall compliance program. Read more about the 4 necessary elements your organizations must have. Read More

Your compliance management framework is a vital piece of your overall compliance program. Read more about the 4 necessary elements your organizations must have. 

Your compliance management framework is a vital piece of your overall compliance program. Read more about the 4 necessary elements your organization must-have. A compliance management framework is a critical part of the structure of every company. It can be defined as a set of procedures for organizations to follow to conduct their businesses within the laws, regulations, and specifications. It consists of tools, processes, functions, and controls that are written down by the top management and directors of each organization. The benefit of these compliance procedures include:

  • Prevents breaking the law which may affect the company’s reputation and avoid heavy penalties.
  • Providing guidelines for operations and implementation of the organization
  • Assigning responsibilities to different people in a company and holding them accountable
  • Help in gathering information for reports.

Therefore, every organization needs to have a compliance management framework for the overall growth of the business. There is various compliance management software that you can select from the market.

When choosing your compliance management framework, you should consider the features and select the one that best fits your company. You should also consider the costs and the reviews made by other organizations.

What is Compliance Management?

The practice of compliance management is the constant monitoring and evaluation of systems to ensure they adhere to risk and compliance management protocols, such as NIST 800 criteria, as well as corporate and regulatory rules and standards.

Compliance management is important for organizations to ensure their systems are secure and meet all relevant standards. NIST 800 standards provide a framework for compliance management that can be used by organizations to ensure their systems are compliant with industry and security standards.

Compliance Management Framework – 4 Necessary Elements

For a compliance management framework to be effective, certain elements are necessary as explained below. The four elements are designed for most of the administrative tasks and make all the work in the organization easier.

1. Compliance program

For a business to comply with all the rules and regulations set, there must be a compliance program to follow. The compliance program should have:

  • Policies- The policies should be set by the management to be followed by employees in the company. The management should ensure that all entry levels in the organizations follow these policies.
  • Processes- Depending on the kind of products or services that the company offers to consumers, there should be a list of the process to be followed to ensure that everything is by the regulations.
  • Training- Organizations need to offer training for their employees. Training is done during the hiring process and also when new procedures and rules are being implemented. Training will remind staff members and help them learn new ways of conducting their business.
  • Monitoring- There should be a monitoring policy to check if the rules are adhered to. Government or private bodies can do the monitoring. The organizations should come up with a monitoring system for all the departments to monitor where the guidelines are not followed.
  • Corrective actions- when mistakes are made in the company, there should be corrective actions to ensure that the errors are not repeated. You should note that the lack of compliance in the organization can affect the organization’s reputation and cost a lot of money.

 2. Commitment from the Board of Directors

The Board of Directors in an organization acts as the management oversight of every organization. The management should be committed to integrity and that the organization will abide by the laws. Being at the top, they should lead by example for other junior employees to learn from them.

The board of directors should come up with a code of conduct, communicate the expectations, adopt policies and explain to the staff the proper compliance function. They should use proper enforcement programs to ensure that everyone in the company observes the compliance guidelines. For example, a bank compliance management system must be proper approval and reported to the Board of Directors. The Board may or may not be involved with the compliance control process.

The board of directors and management oversight should provide the necessary resources that will allow laws and regulations to be applied in their organization.

3. Consumer Complaint Program

For a compliance management framework to be successful, it is essential to know the feedback from consumers. There are several ways in which consumer complaint programs are important.

  • Helps the organization to know the products which offer satisfaction and those that don’t. With this, the company will focus more on satisfying the consumers.
  • The organization can identify the kind of complaints that customers have towards the company and look for ways to improve in that area.
  • Helps the organization to develop alternative products or services for consumers if they are not satisfied with the current products.
  • The company increases its credibility with its customers once they know that they are concerned about their feedback. Customers are happy when they get instant feedback from the company.
  • The organization can reply to the customer’s questions until they are satisfied through the consumer complaint programs. This enhances the reputation of the organization to the customers and the entire market.

Consumer complaint programs use different ways to get feedback from customers. They include social media, reviews, and questionnaires.

4. An Audit from an Independent Body

A compliance audit is a review of an organization’s compliance with the laws and regulations. It also reviews whether there is adherence to the internal policies and implementations. The compliance review should be carried out by an independent body to avoid biased reviews.

Compliance audits should be conducted regularly, and the board of directors should determine how often the audit should be done. The senior management should come up with the scope of the audit and provide the independent body with all the materials and resources required for the audit.

Auditing is essential in every organization as it will help the management to identify compliance risks and ensure that the employees are adhering to ongoing compliance. In the audit team, it is crucial to have some members of the organization’s monitoring system to ensure that the audit is done correctly.

Once the audit is completed, the reports are documented; gaps are identified and come up with corrective actions. The audit report should be handed over to the top management or the board of directors for further action.

Compliance Risk Assessment Framework

A compliance risk assessment framework helps organizations identify, assess, and manage compliance risks. The framework should be tailored to the organization’s specific business activities, internal controls, and compliance requirements. An effective compliance risk assessment begins with a review of the organization’s internal controls.

This helps to identify gaps and weaknesses in the controls that could lead to compliance risks. The next step is to conduct an audit of the compliance function. This assesses whether the compliance function is adequate and effective in managing compliance risks.

Finally, the organization should develop a plan to mitigate any identified risks. The plan should address how the organization will implement new or revised internal controls and compliance procedures. By following these steps, organizations can develop an effective compliance risk assessment framework that will help them identify, assess, and manage compliance risks.

Related: Why CISOs Need to Care about Compliance Regulation in Cybersecurity

List of Compliance Framework Examples:

  • ISO 27001
  • NIST 800-53
  • CIS 20 Critical Controls
  • SOX
  • GLBA
  • GDPR

Compliance Framework for Banks

There is no one-size-fits-all answer to this question, as the best compliance framework will vary depending on the specific needs of the bank. However, some of the most common compliance frameworks used in the banking industry include ISO 27001, NIST 800-53, and PCI DSS.

Compliance Management System Definition

A Compliance Management System is a crucial aspect of any organization that is dedicated to upholding the highest ethical standards. It encompasses a variety of policies and procedures that ensure adherence to legal regulations, industry standards, and internal guidelines. In today’s modern business landscape, it is more important than ever to have a robust compliance program in place. Effective compliance management systems enhance transparency, reduce risk, and help to foster a culture of compliance within the organization. They also provide a framework for assessing and managing risk, identifying potential non-compliance issues, and implementing corrective action plans to resolve them. Overall, a comprehensive compliance management system is an essential tool for organizations of all sizes and one that should never be overlooked.


Though it may seem like a lot of work, implementing a compliance management framework comes with a lot of benefits for your business. You will not have to worry about being on the wrong side of the law, have a stable financial department, build a good reputation and identify the right suppliers. Therefore, as a business owner, if you have not yet implemented a compliance management framework or system, make sure that you do so immediately and start enjoying the results. Contact Cybriant for help selecting the proper compliance management systems for your organization.

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