Prae Venire

Uncomplicating Compliance (AMCHA-Brazil Webinar Key Takeaways)

Business Risks Natalia Gindler Corsini

Prae Venire founder, Natalia Gindler Corsini, recently participated in a webinar for the American Chamber of Commerce for Brazil (AMCHAM-Brazil) in which she presented to small, medium-sized, and family-owned Brazilian companies the importance of implementing a compliance program within their business regardless of size, industry, or type of incorporation. The presentation addressed how a compliance program is crucial for company culture, financial matters, and overall credibility, especially in regards to gaining the trust of business partners and clients, including global organizations.

In this blog, we share the key takeaways from the presentation.

Compliance is new in Brazil and still unknown for many people.

Compliance is oftentimes associated with lawyers only, which is a huge misconception. Many fail to realize that a compliance program is basically a risk-control management system.

Compliance allows risks to be raised before impacting the company.

Independently of business size, industry, or type of incorporation, legal and compliance risks are everywhere.

IS IT NECESSARY? WHY?

Lack of Internal Controls

Family-Owned and Small and Medium-Sized Businesses – Trust and security are inversely related. As trust increases, the quality of internal controls and security tends to decrease.

Money Laundering

Asset Managers – They are not always up to date with the instruction 555 of the Brazilian Securities and Exchange Commission, ensuring compliance in investment management – Compliance Manual, Internal Policies and Controls.

Information Securities

Law Offices – To offer support for clients in the implementation of compliance programs or to meet a law like the LGPD (the Brazilian General Data Protection Law), they have to be practicing in-house.

Corruption

Builders/Condominiums/Administrators – Internal controls, anticorruption program, meeting the LGPD. A study done by the Association of Certified Fraud Examiners (ACFE) reveals that corruption represents 48% of problems in this sector.

A 2020 Global Study of Occupational Fraud and Abuse presented by the Association of Certified Fraud Examiners (ACFE) reveals that 70% of cases relating to corruption, asset misappropriation and financial statement fraud occurred in for-profit organizations, with 44% of the victim organizations being privately-held companies.

As a result of these cases, small businesses (those with fewer than 100 employees) had the highest median loss of $150,000 (USD). That being said, it should come as no surprise that small businesses will certainly feel the impact of a loss of this size, much more so than larger counterparts.

Compliance goes beyond the laws.

Compliance involves:

  • Risk Assessment
  • Internal Controls
  • Training and Communication
  • Leadership Commitment
  • Monitoring and Audit
  • Code of Conduct and Ethics
  • Policies and Procedures
  • Third-Party Management
  • Internal Investigations
  • Corrective Measures, and more.
Compliance is necessary and possible.

Compliance program implementation should not be a big deal for small and medium-sized enterprises. There are a number of affordable systems and tools that can be perfectly customized and applied to each kind of business. 

There are numerous benefits to implementing a compliance program within your business.

Some of these benefits include:

  • Motivation of internal communication (misconduct reports)
  • Positive reputation and overall credibility
  • Loss reduction
  • Competitiveness
  • Reliable global client
Conclusion

You can view the entire presentation by clicking here and see the survey results and comments that AMCHAM received at the end of the presentation here.

Who is AMCHAM?

AMCHAM is an independent, non-profit, business organization that is based in 28 countries in Latin America and the Caribbean. The organization promotes trade and investment between Brazil and the United States and it is an important resource for U.S. companies seeking to expand their operations into the Brazil market.