The role of the Chief Executive Officer within a business is understandably an important one. The CEO is usually the highest-ranking executive and tasked with making long-term strategic decisions for success.
While it may be tempting to think of CEOs in terms of big multi-nationals only, it is also key for many small businesses to have someone fulfilling this position. As well as helping a business to grow over time, a CEO is also the public face of any organization and manages the overall operational functions.
One key area for all small businesses now is undeniably regulatory compliance. This entails making sure your company complies with any relevant laws in the state or country it operates in. Paying attention to compliance with regulations will help your business avoid huge fines or having to face legal action. But what role do you play as a small business CEO in this?
What is your role as CEO in terms of compliance?
As the person responsible for how the business operates overall, you would first oversee the setting of a compliance strategy. CEOs would then have to decide whether to take on the job of executing this strategy themselves or delegating to another senior executive, such as a Chief Compliance Officer. Some small business CEOs choose to take this key task on themselves to keep on top of it personally and save money on hiring a CCO. Just remember that you will still be held as the person accountable for ensuring regulatory compliance as CEO, even if you give someone else the task of making it happen.
This naturally makes it key for any CEO to remain in touch with compliance, whether they take care of it personally or not. But why else should you get involved with this area as CEO?
Key for operating in foreign markets
In the modern world, many small businesses now operate on a global scale. This means that your company must be compliant with local laws and regulations to stay out of trouble.
If you choose to partner with a Chinese CRO company so they can conduct clinical trials for you, you will need to ensure compliance with regulations set out by the NMPA (National Medical Products Administration), which is the new name for the CFDA (Chinese Federal Drug Administration). This is true in other foreign countries you might operate in as well. CEOs are the best people to keep an eye on this as they have the authority to enforce regulatory compliance and can ensure the right people are recruited and deployed to work abroad to make it happen.
Very often, CEOs will also have the higher-level knowledge of compliance regulations in the relevant country from setting up the project there initially. This means they can take the lead on which processes are required to remain compliant.
CEOs can take a big picture approach
As you would expect as a small business CEO, you are more able to see the bigger picture than those who work at lower levels. This bird’s eye perspective allows you to see what is happening in terms of regulatory compliance across your whole organization. This is not the case for individual managers who may only focus on what is happening in their own team or department.
By having this broader view, CEOs can see where potential compliance gaps may be or where issues could crop up in order to head them off. To help your business grow, taking this type of view as the CEO can prevent huge fines or bad publicity from ruining your operation.
CEOs have the time to focus on key areas like compliance
For lower level staff and managers, all their time is spent on completing their daily tasks and serving customers. While this is vital, it can often mean that they have no time to spend on more strategic goals like regulatory compliance.
Although you are busy too as CEO, you should actually have more time built in for things like this as part of your role. This gives small business CEOs the chance to sit and really look at what compliance regulations need to be met, how this can be achieved and also review what has happened over a period of time in this area.
CEOs are key to compliance
As the above shows, there are some very good reasons why small business CEOs should get involved with regulatory compliance. This is even more pressing if you do not have the money or inclination to hire a Chief Compliance Officer to execute a strategy.
Do not assume that employees will take compliance seriously – as they will not be held responsible in most cases for any breaches, they will not be as keen as you to make it happen. It is much better to pay attention to this yourself and set a culture of compliance from the top down.