McBride financial is an organization that needs to focus and adhere to compliance issues within the organization. Two effective ways of ensuring this is for McBride Financial to implement charters and bylaws. Doing so will transfer authority of the organization from the CEO to the independent Board of Directors. “Bylaws established by the board of director’s authority include the specific rules that govern the corporation and its business conduct” (Chew, D. and Gillian, 2005). “Charters assist in the creation of committees. “Charters give the purpose to the committee, qualifications, member’s designation of a chairman responsibilities, duties, and meetings” (University of Phoenix, 2010).
The second focus would be to create a Code of Ethics program for employees to abide by. “The code of ethics will also help to mandate compliance of regulations and laws, disclosure policies, discrimination, and harassment, conflict of interest, trading, confidentiality, compliance, consequences, and corporate citizenship” (NASW, 2012). When employees are aware of the consequences of their actions and the rules they must abide by, non-compliance issues can be greatly reduced in the company.
The cost to adhere to compliance in an organization and the risks of non-compliance are the following. “Ponemon Research puts the cost of compliance at $3.5 million for the 46 businesses they studied.” (ShredNation, 2012) As the quote states, adhering to compliance including implementing external and internal auditors is expensive. Although the costs may be high, non-compliance can be just as costly in a negative way to the organization.
Non-compliance can cause loss of positive reputation, loss of investors and shareholders, loss of customers, decreases in stock prices, lack of revenue, state and federal regulation fines, corporate scandals, financial bailouts, and last failure and