Compliance and Regulatory Risks (Technical Note)

• Nigeria
• Compliance, RegulatoRY, Risks, Nigeria, Africa,

Caselets Summary

Regulatory compliance occurs when obedience by the target population to regulationis secured. Regulatory compliance and reporting on the state of compliance is anatural extension of the governance duties shouldered by top management andcorporate boards. Ordinarily, the private sector should have equal interest in attractinga good reputation for good corporate governance and regulatory compliance, whichcan even be a source of competitive advantage. Companies that proactively set out touse regulation as a tool for improving their processes, increasing value creation andcompetitiveness can be said to turn regulations to positive use.Non-compliance with regulation may result in heavy fines or even withdrawal ofoperating licence. Therefore, sufficient proactive interest for compliance withregulations is required. The only way to ensure that this is done in a consistent mannerthat builds strategic competence is by establishing a viable compliance system. In thefirm, compliance managers need to ensure that regulation is monitored and tracked soas to ensure compliance. Evaluation will then allow the compliance function to adviseon how the firm can adapt to it and continue to be compliant over time.

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