Creating an effective compliance program

Canada’s economic prosperity depends on a free market with fair and robust competition. Both consumers and businesses win when prices for goods and services are set by competitive market forces.

To safeguard competitive markets, businesses are required to comply with a variety of laws and rules.

Why compliance is important

Complying with the law is not optional, and ignorance of the law is not a defence. We strongly recommend that every business establish an effective compliance program.

Consequences of non-compliance

If you, your company, or your employees have not complied with the law, you could face a range of potential consequences. These may include costly and lengthy investigations and lawsuits, cease-and-desist orders, to pay consumers, large fines or penalties, and even imprisonment. Breaking the law can also damage your reputation.

Reduce your risk

If you are involved in a Bureau enforcement matter, a credible and effective compliance program can help you demonstrate that you exercised due diligence and could factor into our decision on how to proceed. It could also reduce your potential penalty. However, a compliance program will not immunize you from enforcement action if you are found to be non-compliant.

Elements of an effective compliance program

You can protect your business by having a strong compliance program in place. Like an early-warning system, a compliance program can help you detect and correct unlawful conduct quickly before it damages your company, your reputation, and your bottom line.

These steps can help you create an effective compliance program:

1. Demonstrate that management is fully committed to compliance.
   An effective compliance program starts with firm and ongoing from support from the leadership team. Appoint a compliance officer—someone with a direct line to top managers and with the power to run the program.
2. Assess your company’s compliance risks.
   Start by thoroughly assessing the specific risks that apply to your business. This will enable you to determine what measures you need to put in place to mitigate these risks. It will also help identify situations where you could be vulnerable to anticompetitive conduct by a competitor. The types of risks will depend on a variety of factors, such as what you sell and how you market it, whether you import or export, the size of your company, and the sector in which you operate. Because change is constant, you will need to conduct regular assessments.
3. Establish effective policies, procedures, and processes.
   Create policies and internal controls designed specifically for your company’s operations and daily activities. For example, if your business often submits bids, establish a set of “dos and don’ts” to be followed when preparing a bid submission. If your company places advertisements, ensure that all product claims you make are truthful and not misleading. If you produce textile items or prepackaged goods for consumers, be systematic about ensuring your product labels always meet the applicable labelling rules.
4. Continuously train and educate staff.
   All employees whose work can increase your risk of being non-compliant with competition law need to be trained in proper procedures and behaviours. They also need to know how to detect potential issues and be aware of the risks and penalties—to the business and to themselves—if their actions result in non-compliance. If you do not have sufficient resources to develop your own training, look for external training programs offered by other organizations, such as your trade association.
5. Create appropriate mechanisms for monitoring, verifying, and reporting.
   Monitor your compliance measures to ensure they are effective. If non-compliance is detected, document the issue and verify that the problem was corrected and dealt with appropriately. Ensure that managers and employees alike can report non-compliance confidentially and without fear of retaliation.
6. Establish incentives and disciplinary procedures that encourage compliance.
   Employee incentives, such as making compliance activities part of performance evaluations, will help encourage a culture of compliance, which in turn will help protect your business. In addition, having clear consequences in place will deter misconduct and demonstrate your company’s commitment to complying with the law.
7. Evaluate your compliance program regularly.
   You also need to continuously evaluate the effectiveness of your compliance program. You can do this by regularly assessing and updating employees’ knowledge of your company’s compliance responsibilities, policies, procedures, and reporting. For example, conduct surveys and interviews and hold follow-up meetings and refresher training sessions. Also, stay abreast of changes to the law or regulations and adjust your practices accordingly. Evaluations can also be triggered by an event—for example, if a violation has occurred, or you acquire another company, or you move into new lines of business or new markets.