Regulatory reforms can be good for business by strengthening rule of law, harmonising commercial frameworks across borders and evening the playing field to create a more competitive business environment. However, the speed of reform poses a challenge for businesses in keeping up with their obligations without spending inordinate time and resources on compliance. So, how should organisations in the region approach the current wave of reform? This article outlines best practices to prioritise effort and sequence reforms.
There are three key challenges facing organisations in MENA’s current regulatory transition.
Some organisations struggle to know exactly where their ‘borders’ lie in terms of compliance - for example, the degree to which they need to monitor and stress test third parties’ policies and procedures. Similarly, many businesses have undertaken expansions and acquisitions, and continue to do so, raising questions about compliance across jurisdictional authorities (where expansion is across borders) and between agencies within a country, where they are entering a different sector.
Assembling and maintaining a continually updated repository of compliance obligations - and adaptations and amendments - is a challenge that most businesses face today. It is critical that every organisation maintains its own such tracker capturing relevant sources for their industry and business though, for instance, monitoring the websites of regulators, signing up to mailing lists of relevant regulators, subscribing to reliable legal databases and/or taking up membership of professional groups. But this is a labour-intensive process that needs to be done comprehensively and continuously to be a dependable resource.
Compliance is an emerging profession in the region, with a surge in candidates seeking certification. However, there is a shortage of experienced professionals who can support and drive compliance processes in-house.
Regulatory reforms in the Middle East are modernising the business environment, encouraging international investment and helping domestic companies build global businesses by aligning with best practices. Yet the speed and scope is unprecedented in recent years. Organisations need to invest resources in a dedicated compliance team, be practical about what to prioritise, and seek expert guidance to avoid over or -under complying.
There is no one size fits all approach to compliance so it is best to follow a tailored approach that addresses your business specific challenges and helps mitigate compliance risks.