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Introduction
When it comes to running a business, there are many moving parts that are constantly changing – New business laws, employees, customers, money coming in, and money going out. At the top of a business venture, there’s more than likely a C.E.O. or a group of owners who know and understand every aspect of the business. If they do not, then the business might fail or they may get into lawsuits where they would need the assistance. For that reason, in this article, we will be discussing the topic of the significance of having synergy between the leaders of a business, and the law or compliance department.
Synergy Between Leadership & Compliance
By definition, synergy is the combined actions or operations and the compatibility of different elements or participants towards a mutually advantageous goal. Synergy occurs when there are fluidity and agreement among the people inside of the business and breaks down when certain individuals either go against the agreed ideals or mantras of the whole. In any business, there’s naturally a leadership body, whether it be one individual or a group of individuals guiding the business forward by showing people how to execute and keeping them accountable.
Within the same business, there are individual teams for sales, marketing, and legal. The legal team is extremely important because they understand the legalities of business and the ground-rules for what can and cannot be done. They also understand loopholes or advantages of the law for the business owners and know how to protect the business’ clients and their interests. One of the areas of major concern for people is the privacy of information. Most leadership teams hire a legal team because they don’t have the time to understand the law and may not have studied this in their college years. However, you may also outsource such operations to professionals such as Law Advice law firm.
The legal team can help a business run smoothly by updating the sequence of events, sometimes for everyone in the business. An example of this includes the recent update of “cookie consent.” If you’ve been on the internet for more than two years you will have seen a pop up asking you to accept cookies. In the past, this was not a requirement, but the law of the United States now makes it a requirement for every website on the internet.
Another example where synergy between the leadership team and the compliance team must happen is when reviewing deals and their contracts. A specific project could be that of a real estate development where the leadership team is convinced that they can build a certain building in a piece of land that they’ve already purchased. The legal team is then brought in to review the legality of this by seeking the consent of city officials and they find out that such a structure cannot be erected on that type of land. If the leadership team is a good one, they will not argue with the expert counsel of the legal team and will accept their mistake, but if they are stubborn, it may cost the business hundreds of thousands of dollars.
Conclusion
We discussed the topic of why it is important that the leadership team and the compliance or legal team maintain a synergistic relationship. When there are internal problems in a business it not only affects the business, but it affects the customer, and the people working within the business. More importantly, when legal matters are at stake and the leadership group does not consult the legal team, there can be a negative effect on the image of the brand.
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