The risks of not complying to regulations
Countless local and international regulations are put in place in businesses to ensure that commercial entities act reasonably and responsibly. Many businesses tend to treat these regulations and the compliance of them as a secondary priority. This is generally because of the abundance and complexity of the regulations, as well as the rapid change rate. Since businesses tend to treat compliance as a secondary function, there is very little consideration of the consequences. These include weighty fines and trade sanctions – among others, which include:
No director or board member wants to face criminal charges for not ensuring that their enterprise follows the law. Criminal charges, however, are a potential consequence for certain regulatory non-compliance. Jail time could result from failure to comply in areas regarding to staff management, workplace safety, marketing, supply chain, corporate governance, stock management and due diligence laws.
A business’ public image is the key to its success. When a company is thrust into the public eye because they failed to comply with regulations, there are reputational repercussions, which eventually leads to distrust. Once that happens, loyal customers may leave, new customers could be put off and potentially beneficial partnerships might never develop.
Loss of remunerative opportunities
South African businesses are required to meet a number of regulations if they want to do business with government or any government-owned corporation. Non-compliance across your enterprise and business network could very well result in exclusion from the tendering process and supplier database. In addition, companies that value corporate compliance may avoid doing business with you as they would aim to ensure that they meet their own regulatory obligations.
To read more about business regulations and what they are, visit this page.