from dr. Leonz Meyer, lawyer, VRFinder
The Swiss legislature, too – under pressure from foreign governments – has succumbed to actionism to pass new compliance regulations several times a year. As soon as something goes wrong somewhere in the economy, the call for legislative trade sounds. The burdens of these regulations are usually borne by the “decent” companies, while the (few) managers with criminal energy always find new loopholes.
How do SMEs deal with compliance?
Large companies have enough human and financial resources to address compliance issues. With millions or billions of sales you have legal and compliance departments anyway, which can implement new legislative requirements. SMEs, on the other hand, can easily suffocate to such legal obligations!
Pragmatism is required!
From the point of view of SME management, compliance is often a cost hunk – it is difficult to understand the meaning behind it. But the attitude would be fatal, not to worry about compliance. This not only increases the risk of personal liability of the board members and management – it can also lead to the lack of correct treatment of certain compliance issues (for example, dealing with risks and internal control system) an audit report without notorious “notices”. This in turn can unsettle shareholders or banks.
A checklist helps
The members of VRfinder, each with experience from a different industry and from a different educational background, regularly exchange views on the compliance regulations that emerge in various jurisdictions and industries. Their goal is to pragmatically break down this jungle of regulations to the VR mandates they serve. This resulted in a table showing that the Board of Directors of an SME complies with its obligations regarding compliance (Article 716a Section 5 Swiss Code of Obligations, CO), Risk Assessment (Section 20 Code of Best Practice for Corporate Governance of Economiesuisse) and Internal Control System (Art. 728a (3) OR), assesses and resolves it. In most cases, a single member of the board of directors, who is familiar with the legal requirements, takes on the task of designing a basic checklist tailored to the specific needs of an SME and then further developing it with management and overall CEO. An annual update of the list constantly improves their quality. A basic version of this list can be downloaded from the homepage of VRFinder.ch or [here]. This list is not only a help to compliance – it also leads to a continuous sensitization of all employees on sensitive topics and thus to a competitive advantage. //