In 2020, workplaces were forced to contend with a dramatic shift to flexible working practices that allowed them to re-evaluate their current approach to compliance on a company-wide scale. In 2022, however, the world will continue edging closer towards a sense of normalcy and, as a result, the need for compliance will be met with a series of brand-new challenges facing compliance that require a completely different approach.
The COVID-19 pandemic – challenges facing compliance
It is no secret that the COVID-19 pandemic has transformed almost every global industry and sector since 2020 and with the resulting onslaught still ongoing, businesses have seen their current operating models face inoperable damage. It may, for example, be feasible for smaller businesses to return to business as normal as the year progresses but there is no denying that employee expectations have undergone a complete transformation. In response to this, businesses must reconsider their current approach to risk management on a long-term basis as opposed to on a short-term basis with safety and security, talent retention, and productivity key considerations for the year ahead.
In 2021, Glasgow hosted the COP26 summit. It, in the very simplest of terms, outlined the commitments of a number of countries, organisations, and communities to continue tackling climate change throughout 2022 and beyond. It comes as the UK announces a series of mandatory climate risk disclosures set to be introduced from April this year on 1,300 listed companies and financial institutions, marking the first time a G20 country has taken such drastic measures to preserve these ideas into law. In addition, the ongoing climate change crisis also calls on businesses to provide a series of clearly defined rules when it comes to the regulation of how climate change measures are adhered to at work with financial institutions, banks, and insurers, in particular, required to nominate a senior manager to identify and manage these risks.
2021 will continue to see a growing number of businesses and consumers shift the vast majority of their personal and professional operations online. It may remove the physical risks associated with handling money, but it also inadvertently lends itself to fraud with professional criminals seeking any opportunity to deceive victims they deem highly vulnerable. The ongoing COVID-19 pandemic and the recent shift to flexible working practices, in particular, will remain fundamental risks as we progress further into 2022 with a series of brand-new measures required to tackle these threats. It can be difficult to monitor fraudulent activity in real-time whilst employees are working remotely but administering up-to-date training on an ongoing basis and ensuring newly learned knowledge and understanding is applied to everyday situations is the only way to prevent such problems from arising or having a negative impact on the business as a whole.
It may have been in 2020 when the UK announced its departure from the EU but with continual delays and lingering negotiations hindering its progress, 2022 will be the year that it may challenge compliance for a wide range of businesses. In the manufacturing sector, for example, shortages in supply chains have led to escalating costs that have shown no signs of slowing just yet. If the EU decides to withdraw equivalence for financial institutions based in the UK, for example, it is fully within its rights to do so with only 30 days’ notice and the UK has no right to contest. The EU’s decision to provide the UK’s data protection program with adequacy status, or treat it adequately to how it would if it were in the EU, however, does promise that personal data can continue to transmit freely between the UK and the EU and, in doing so, continue to benefit from a number of additional protections guaranteed under EU law.
Company culture – challenges facing compliance
It may not necessarily be a 2022-specific challenges facing compliance, but company culture, and specifically diversity and inclusion, will continue to be of the utmost importance to businesses this year. It comes as societal pressures remain for both small businesses and global organisations to not only tackle problems relating to company culture but prove how they are doing so in a way that is honest and transparent. The FCA has, after all, already outlined a need for further progress to be made on the ways in which businesses approach diversity and inclusion and are set to continue to do so into 2022 and beyond as data is measured and policies are reviewed on an ongoing basis.
In 2022, businesses from a wide range of global industries and sectors will deal with a number of challenges that will force them to re-evaluate their current approach to compliance on a company-wide scale. This includes the ongoing COVID-19 pandemic, climate change and the fallout from the COP26 summit, fraud and its impact on flexible working practices, the long-term consequences of Brexit, and company culture with a specific focus on diversity and inclusion.