Organizations need to respond effectively to regulatory action in order to minimize potential damage.
Authorities around the world are engaging in harsher and more public enforcement than ever before. Regulatory action, in the form of fines, criminal sentencing, public criticism, or even intervention of authorities, requires a thoughtful and effective response to minimize the damage to an organization’s business and reputation, to address underlying issues, and to ensure whatever triggered the action in question does not reoccur.
Regulatory action can however be seen as a major crisis by the targeted organization, making it difficult to take sound decisions that go beyond putting out the most immediate fire. Regulatory action can also make it difficult to carry out a level-headed assessment of the root causes of compliance failures, thus preventing the effectiveness of any mitigation or remediation measures.
However, a good regulatory response can be an opportunity to leave an incident behind and start on a new track , tackling compliance gaps and quickly regaining the trust of regulators and stakeholders.