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Compliance Management System Plan: Woolworths Limited [Australia]

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Question:

Describe about the Compliance Management System Plan of Woolworths Limited [Australia]?
 
 

Answer:

Introduction

This is a report which has conducted a thorough research and proposed a suitable compliance management system for an organisation. The report will aim at developing a compliance management plan. The organisation selected to develop a compliance management system is Woolworths Limited [Australia].

Compliance Management System

By definition, Compliance is defined as the process of abiding by the laws, codes and organisational standards of the good governance and accepted community (Giddens, 1981). A compliance management system usually refers to as a system that intends to learn about compliance responsibilities, ensures that employees understand their responsibilities well, ensures business requirements are properly incorporated into business processes and takes corrective actions and update material as necessary. Framework of a Compliance Management System is pictorially represented as:

Fig 1: Compliance Management System

Source: Giddens, 1981

Generally, organisations are faced with wide-ranging internal and external factors that puts a question mark on whether the organisation will be able to accomplish objectives or not. A Compliance Management System helps to address the risks involved in key areas such as Reputation, Market and Product Development, Financial planning, Risk Management etc. Compliance Management System usually comprises of three key elements that are interdependent with each other. These are Board and Management oversight, Compliance program, and Compliance audit (Giddens, 1981). It is stated when all these elements work together, it enables an organisation to be successful in managing their compliance responsibilities effectively. An ideal Compliance Management System is crucial for the effective working of institution, similar to business plan. A Compliance program includes following crucial components. These are personnel, training and processes. These have been described in later sections of the report.

Compliance management system will require following requirements;

  • Risk and compliance needs to be met on a single platform.
  • It needs a central system to enable users across multiple locations to record, review and evaluate compliance information.
  • Risk officers will be using out-of-the box integrated solution to determine risk and evaluate compliance.
  • Risk and compliance officers need real-time data.

Apart from it, some IT requirements of a compliance management system are:

  • It needs a central system to enable users across multiple locations to record, review and evaluate compliance information.
  • Tying existing information and ERP applications that exist within the enterprise.

Personnel

Personnel for the development of a compliance management system include the Board of directors, Management and Staff. 

Board of directors

Management

Staff


Fig 3: Personnel Requirements

Source: Luis, 2008

Board of Directors is responsible for maintaining the effectiveness of the compliance management system. They are accountable for:

  • Approving policies
  • Monitoring risk assessment and finding ways to cope up with them.
  • Approving and monitoring systems of control
  • Creating policies that are consistent to the requirements of organization

Management is responsible for effective management of compliance with the rules and regulations applicable for the organization. They are accountable for:

  • Taking leadership roles, such as promoting cultures of compliance management
  • Ensuring to manage risks effectively
  • Identifying the risks within different departments of organizations
  • Helping operational staff cope up with emerging risks
  • Ensuring staff is trained
  • Reporting and finding effective steps to report breaches

Employees represent the operational personnel involved in the development of a compliance management system (Luis, 2008). Every employee is responsible for the compliance of their regulations. In addition, it is also crucial for the employees to participate in training sessions, report and escalate any concerns.

The levels to which breaches are to be reported are:

 

Breach Rating

Reporting Requirements

Very High

High

Medium

Low

Very Low

Board of Directors

 

 

 

Board of Directors

 

 

Management

inform

Employees

inform

inform

inform

inform

inform


Fig 4: Breach Rating

Source: Luis, 2008

Training

In order to maintain the effectiveness of a Compliance Management System, it is crucial to train management, staff and directors about it. Hence, for this Compliance Management System, it is essential to provide training related to their job and rules and regulations about the line management and staff. The training will be conducted by compliance officer who will establish a regular training schedule for directors, management and staff (Craig, 2009). I will advise the organisation to conduct in-house training sessions as this will enable more number of employees to take part. Once personnel are trained thoroughly on one topic, compliance officer will regularly assess them to ensure they get the crux of the sessions and check their knowledge about subject matter.

For the Woolworths Limited, it is crucial for the front line managers to be well-informed about the crucial information related to retail services. Once they are well-versed then only they can interact with applicants well. For this, a compliance management system is effective when it is regularly updated with recent, complete and accurate information about the baking services (Craig, 2009).

Processes

The policies, procedures and processes of a Compliance Management System are to be documented and can be updated frequently as the business environment of the organization keeps changing. The policies of the compliance management system will provide information about the aims, objectives and mission of the organization. Overall, there are six processes involved in development of a Compliance Management System;

Fig 2: Six Processes Involved in Compliance Management System

Source: Craig, 2009

These six processes are;

  • Understanding the legal and regulatory environment
  • Creating and maintaining the requirements of a compliance management system
  • Assessing the risk factors for the development of compliance management system
  • Managing obligations
  • Monitoring and evaluation
  • Communicating and reporting

Administration

Budget of a compliance management system includes costs related to human resources required for developing, implementing, reviewing and maintaining the proposed compliance management system (Manfred, 2012).

The overall budget for the development of compliance management system is proposed to be $50,000. It includes the costs associated with implementing, reviewing and maintaining the system. However, budget is likely to increase if need be at later stages as per the demands of the plan.

 

References

Giddens, A. (1981). “A Contemporary Critique of Historical Materialism.”, Social and Politic Theory from Polity Press 1. University of California Press. pp. 125.

Luis, R. (2008). “Management: People, Performance, Change.”,  3rd edition. New York: McGraw-Hill. p. 19.

Craig, S. (2009). “Merrill Bonus Case Widens as Deal Struggles.”, Wall Street Journal.

Manfred, F. (2012). “Kets de Vries The Dark Side of Leadership.”, Business Strategy Review 14(3), Autumn Page 26.

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