The ISO 19600 standard in regulatory compliance for good governance
written by Maria Camila Arévalo, On June 09, 2020
ISO-19600 provides the guidelines to implement regulatory compliance, which is an essential part of good corporate governance. This is how an organization reaffirms its reliability, integrity and commitment to all its stakeholders (shareholders, management, customers, suppliers, the financial sector, the government and the community), having a positive impact on its financial health.
Corporate governance is composed of the system of rules, practices and processes by which a company is managed and controlled, and combines:
- Formal elements: reflected across different corporate governance practices of the company, which are duly made official both inside and outside the company; this makes up the basic regulatory compliance.
- Informal Elements: reflected across a set of practices immersed within the company's organizational culture and which are a pillar of transparency and trust with citizens. These elements determine the organization's particular features and identity.
- Control mechanisms: combine internal and external components, carried out not only by the oversight and control bodies, but also by different stakeholders.
Importance of ISO 19600
To unify regulatory compliance efforts, the International Standards Organization (ISO) has issued ISO 19600:2014 Guidelines for a Regulatory Compliance Management System.
ISO 19600: 2014 is based on the principles of good governance, proportionality, transparency and sustainability and provides guidance for establishing, developing, implementing, evaluating, maintaining and improving an effective and responsive compliance management system within an organization.
The guidelines on compliance management systems are applicable to all types of organizations. The scope of application of these guidelines depends on the size, structure, nature and complexity of the organization.
The key thematic areas covered are:
- Understanding the scope and context of the compliance management system.
- Examining the crucial role played by the organization's leadership.
- Understanding the origin of compliance obligations.
- Using compliance as a risk mitigation tool.
- How to set compliance goals.
- Raising awareness by means of training and integrating a strong compliance culture.
- How to develop effective communication and supporting documentation.
- Achieving institutional ownership of the compliance management system. through the creation of management-led controls.
- Identifying the actions that are necessary to ensure continuous improvement of the compliance program.
Benefits of ISO 19600
Implementing and maintaining the ISO 19600 Standard is an assurance of the adoption of the culture of regulatory compliance, and respect for legislation.
It is also a statement of the company's responsible management to all stakeholders, while minimizing the potential risks related to administrative, civil and criminal liabilities that can affect the company, its directors and administrators.
In this way, ISO 19600 is a very important tool for the future of companies, to comprehensively plan the regulatory compliance that all organizations are required to include in their structure, decisions and objectives as a foundation for growth and improvement.
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