Compliance supervision serves as a bridge and guide for enterprises
Author: Fang Jianzhong
In recent years, how to promote modern enterprises to establish a sound compliance management system and ensure stable development has become an urgent problem to be solved. Jinhua City, Zhejiang Province has integrated various resources and launched multiple innovative measures, focusing on building a "demonstration city" for corporate compliance, providing valuable experience for other places to learn from.
Corporate compliance refers to a corporate governance approach adopted by enterprises to avoid or mitigate administrative and criminal responsibilities that may arise from illegal and irregular operations, and to avoid greater economic or other losses. The establishment of an enterprise compliance management system can effectively identify compliance risks and prevent them from happening. An effective compliance management system can establish a mechanism for risk transfer and responsibility cutting between the enterprise and its employees, customers, and related business partners, avoiding joint liability for illegal and criminal activities committed by the enterprise's employees or affiliated enterprises. Once involved in a case, the enterprise can obtain compliance incentives such as reaching a settlement, suspending investigations or prosecutions, and reducing penalties by applying to regulatory agencies and judicial authorities to establish or improve a compliance management system, in order to avoid the harshest punishment results and give the enterprise a chance to be reborn.
Market regulation is an important function of the government. Compliance regulation responds to the practical needs of enterprises and is also an effective way for law enforcement practitioners to transform their enforcement concepts and innovate their enforcement methods. Corporate compliance is essentially an internal governance issue within the enterprise. However, there are significant differences in the nature, business scope, scale, and development stage of enterprises, and not all enterprises have the willingness and ability to establish their own compliance management system. This requires regulatory authorities to provide compliance guidance for enterprises. Just as Pujiang County in Jinhua City is based on the current situation that most crystal enterprises are small and micro enterprises, unable to independently complete enterprise compliance construction, it has issued administrative compliance guidelines to guide 45 enterprises to share this new compliance policy.
Corporate administrative compliance is also an inevitable choice for transforming law enforcement methods. With the advent of the digital age and the rapid rise of the network platform economy, simple administrative penalties can easily fall into the "deterrence trap" and cannot solve the problems existing in enterprises. Therefore, law enforcement agencies must change their law enforcement concepts from simply pursuing "administrative legitimacy" to pursuing "administrative correctness", change the practice of only defining "no fly zones" for enterprises, and at the same time, build bridges and guide the way for enterprises.
Throughout the past few years, China's compliance management construction has also gone through a development process from point to surface, from specific fields to comprehensive compliance. In 2016, the State owned Assets Supervision and Administration Commission selected five enterprises including China Petroleum to carry out pilot work on the construction of compliance management systems. Subsequently, the focus of compliance supervision in China has expanded from financial companies to central enterprises and enterprises engaged in overseas operations. On November 2, 2018, the State owned Assets Supervision and Administration Commission (SASAC) issued the "Guidelines for Compliance Management of Central Enterprises". In response to high-risk areas such as anti-monopoly, anti commercial bribery, and export controls, a series of compliance guidelines were successively issued to guide enterprises to comprehensively promote compliance management work, clearly covering all business areas, functional departments, subsidiaries at all levels, and all employees, throughout the entire process of business development.
Nowadays, the embryonic form of China's unique corporate compliance management system is emerging. The ultimate goal of enterprise compliance management construction is to ensure that all enterprises improve their compliance system, form sustainable corporate development strategies, achieve high-quality development, and win a favorable position in domestic and foreign markets.
Guangming Daily
