Regulatory compliance, especially in the ITAD industry, is a very vital component. I.T. asset disposition companies, including Lifespan, deal with valuable inventory for resale; data destruction and erasure of sensitive information; promote environmental stewardship through proper recycling of retired I.T. assets; comply with specific processes and protocols; adhere to health and safety standards.
Executing regulatory compliance throughout all processes will help to protect your business’s resources and reputation. Compliance lays the foundation on which your company’s reputation stands as it builds trust with customers, prospects and vendors. To be compliant in the ITAD world, we must understand compliance, the risks associated with the failure of being compliant and compliance risk management.
What is Compliance Risk?
Compliance risk is an organization’s potential exposure to legal penalties, financial forfeiture and material loss, resulting from its failure to act in accordance with industry laws and regulations, internal policies or prescribed best practices. (Francesca Sales, Tech Target, 2021).
Types of Compliance Risks
There are five main compliance risks that every organization should be aware of. If an organization is implicated, it would fall under one or more of the following compliance risks:
- Corrupt and illegal practices: Ensures that the organization, agents and employees are in adherence to the industry laws and regulations. Typical compliance risks concern illegal practices including fraud, theft, bribery, money laundering and embezzlement.
- Privacy breaches: This compliance risk involves the violation of privacy laws. This includes hacking, viruses and malware. Companies that oversee sensitive information should have appropriate measures in place to protect the data and prevent privacy breaches.
- Environmental concerns: Environmental compliance risks are associated with pollution and damage an organization’s operations and processes can cause. This includes the destruction of natural habitats, use of harmful chemicals, improper recycling of electronic waste and more. Nowadays, many companies have integrated sustainability practices into their business strategies and are equipping their employees with effective resources to help them achieve environmental compliance.
- Process risks: A process risk is a failure to follow established procedures for completing tasks or standard processes. Example: Accessing company network from a remote location. If an employee abuses the remote access procedure, it is considered a process risk.
- Workplace health and safety: Companies are legally required to follow strict health and safety protocols. These protocols are regulated by governing bodies – In the U.S. these laws are enforced by the Occupational Safety and Health Administration and U.S. Food and Drug Administration.
Compliance Risk Management
“Compliance risk management is the process of identifying, assessing and mitigating potential losses that may arise from an organization’s noncompliance with laws, regulations, standards, and both internal and external policies and procedures.” (Francesca Sales, Tech Target, 2021). These management practices are implemented to help organizations maintain compliance with various laws and regulations.
Organizations should be of knowledge to their compliance risks on all levels. Legal, regulatory, financial, technical areas and even information technology departments should be reviewed for potential compliance risks. If an organization can understand the potential risks, it is easier to prevent them from occurring in the future.
Lifespan and ITAD Compliance
At Lifespan, we utilize a well-managed ITAD program to reduce the threat of potential compliance risks throughout all of our processes. We ensure this by abiding by our compliance risk management policy on all levels of business. We do ITAD right!
For more information about Compliance Risks, read this article by Tech Target.