How regularly should companies review their compliance policies?

Companies should review their compliance policies regularly, at least annually, or whenever there are significant changes in laws or business operations to ensure that they remain effective and relevant. This proactive approach to compliance is critical because the regulatory landscape is frequently changing, and organizations need to adapt their policies to meet new legal requirements and operational realities. For instance, if a company enters a new market with its own regulations or if there are major legislative updates, the compliance policies must reflect these changes to mitigate risks associated with non-compliance.

Regular reviews also help to identify potential gaps in compliance and ensure that policies continue to align with organizational objectives and practices. An annual review establishes a consistent schedule that helps ensure accountability and thoroughness in compliance management. Additionally, it encourages a culture of compliance within the organization, fostering awareness and engagement among employees.

In contrast, waiting until a violation occurs, conducting reviews only during budget meetings, or adhering to a fixed schedule like every five years are not effective strategies. These approaches do not take into account the dynamic nature of regulatory requirements and could expose the organization to unnecessary risks.