Many organizations establish a compliance committee to ensure their company follows the legal requirements of its industry. This committee manages the organization’s governance, risk, and compliance (GRC) strategy.
Developing a compliance committee charter is crucial to ensuring all stakeholders on the committee understand their duties and responsibilities. Learn how to draft a compliance committee charter and power its implementation with board management software.
What is a Compliance Committee Charter?
What is a compliance committee charter? A compliance committee charter is a formal document that outlines the purpose, responsibilities, structure, and operating procedures of the committee. The charter’s goal is to ensure all stakeholders understand their roles and duties within the committee and comply with all legal requirements.
Among other crucial components, the charter should include the following:
- Overview of the compliance activities expected from members
- Rules and guidelines for meetings
- Procedures for handling violations
- Clear definition of the committee’s authority
- Explanation of the committee’s reporting obligations
- Process for resolving conflicts
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How to Write a Compliance Committee Charter
Follow this step-by-step guide to write an effective and comprehensive charter:
1. Define Purpose and Objectives
The first step in writing a compliance committee charter is to determine the committee’s purpose and objectives. This involves outlining the primary activities and responsibilities of the committee, as well as the expected outcomes. It’s vital to ensure that all stakeholders understand what they are expected to do to maintain high-performance levels.
2. Establish Committee Structure
A committee structure is a critical component of a compliance committee charter. It should include the number of members, their roles and responsibilities, the frequency of meetings, and other information. This gives everyone involved a clear understanding of what is expected from them.
3. Outline Committee Responsibilities
Every committee has unique duties and responsibilities that are outlined in its charter. An audit committee, for example, oversees the organization’s financial reporting process.
Similarly, a compliance committee must outline its responsibilities to ensure all stakeholders understand their roles and can act accordingly. For instance, in its bid to ensure compliance with all legal requirements, the committee may be responsible for reviewing internal policies and procedures, monitoring regulatory changes, and providing recommendations on compliance-related matters.
4. Define Reporting and Communication Channels
In addition to outlining committee responsibilities, it is also important to specify the reporting and communication channels the committee will use. This ensures everyone is on the same page and can access necessary information promptly. For instance, it’s not enough to ensure SOC 2 Type II compliance. Committee members must also be able to easily access the audit reports and other documents necessary for compliance.
5. Establish Evaluation and Review Processes
Finally, it’s essential to include a detailed evaluation and review process in the charter. This should outline how the committee will monitor its performance and track progress toward achieving its objectives. It should also detail how the corporate committee will evaluate any changes to legal requirements, policies, or procedures and provide guidance on handling non-compliance issues.
OnBoard Powers Effective Committees
At OnBoard, we understand that every organization is unique and requires an individualized approach to board governance. That’s why our software provides customizable tools to streamline the process of implementing a committee charter and compliance program.
OnBoard powers an organization’s most crucial committees, from compliance to the corporate governance committee. Among its many features are:
- Frictionless collaboration: Seamless sharing of documents, such as board committee charters, ensuring committee members are all informed and up-to-date.
- Robust security: Top-class security features like 2FA, remote wipes, and granular permissions.
- Risk-free compliance management : HIPAA- and GDPR-compliant and SOC2-certified.
OnBoard helps manage a successful compliance committee and ensure its charter’s implementation. The software solution provides efficient collaboration tools, robust security measures, risk-free compliance management, and simplified task management capabilities, among other benefits. With OnBoard’s help, your organization can ensure it meets all the necessary legal requirements for compliance.
Ready to host your first compliance committee meeting? Download our free board meeting agenda template to get started.
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About The Author
- Josh Palmer serves as OnBoard's Head of Content. An experienced content creator, his previous roles have spanned numerous industries including B2C and B2B home improvement, healthcare, and software-as-a-service (SaaS). An Indianapolis native and graduate of Indiana University, Palmer currently resides in Fishers, Ind.
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