The VW scandal involving manipulated emissions test data highlights the importance of effective compliance management systems. This is true for large corporations as well as small and medium-sized businesses.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: It is not yet possible to estimate the scale of the VW emissions scandal and the associated economic damage. It remains equally unclear who is responsible for the manipulated emissions test data that is expected to cost the Group several billion euros. The case does, however, clearly demonstrate the importance of an effective compliance management system when it comes to averting loss or damage. This not only applies to global enterprises but also small and medium-sized businesses. Damages claims can threaten a company’s existence.
Effective compliance management systems can help to prevent criminal offences from arising within a company. This concerns the employees but also the executive board or management. It is the executive bodies that are ultimately responsible for setting up functioning compliance management systems. These systems also serve to protect the executive board. It can end up personally liable in the event that damages claims are asserted, as businesses are obliged to ensure that no unlawful acts are committed from within the company.
Effective compliance management systems are also becoming increasingly important for medium-sized businesses, especially those operating in international markets. The laws of other countries differ from national regulations, with the result that ignorance can potentially lead to unwitting infringements. Medium-sized companies are able to protect themselves from this risk with the help of effective control systems.
An effective compliance management system should always be tailored to individual companies so that it does not undermine the firm’s strengths. At the same time, it is important to take into account the varying demands placed upon the different positions within the company’s structure. It is not sufficient to simply set up a control system; in order for it to be able to fulfil its function, its effectiveness needs to be reviewed on a regular basis. Lawyers who are competent in the field of commercial law can assist in establishing and reviewing a compliance management system.
For more informations: http://www.grprainer.com/en/legal-advice/corporate-criminal-law/compliance.html