1. Define governance: the first step of building a compliance department
The foundation of how to build a compliance department starts with clearly defined governance structures. This includes establishing a compliance committee with clear roles and responsibilities, setting appropriate reporting lines to senior management, and creating a compliance charter that outlines the department's mission and authority. Ensuring adequate resources—budget, staff, and technology—as well as developing key performance indicators will ensure accountability and demonstrate the organisation’s commitment to compliance at the highest level.
2. Risk mapping: a key phase of building a compliance department
Once governance is established, the next step in how to build a compliance department is to map your organisation's compliance risks, also known as the Enterprise-Wide Risk Assessment (EWRA). This involves identifying applicable laws and regulations, conducting stakeholder interviews, reviewing past incidents, and analysing business processes. By creating a comprehensive inventory of potential compliance risks and prioritising them based on likelihood and impact, you can allocate resources efficiently and focus attention on the greatest threats.
3. Clarify risks: deepening your approach
After mapping potential risks, it is essential to analyse each risk in detail. This means documenting their specific nature, determining associated regulatory requirements, identifying existing controls, and assessing their effectiveness. Quantifying potential impacts and establishing risk tolerance levels transforms general understanding into actionable insights. A risk register with clear ownership assignments ensures accountability for each risk area.
4. Formalise policies: critical for building an effective compliance department
With risks clearly identified, the next step is to formalise compliance policies. Ensuring that policies are clear and accessible increases compliance. Implementing document management for version control, establishing review processes, and scheduling regular updates will keep policies up to date with regulatory changes. Well-drafted policies provide clear guidance and demonstrate a commitment to compliance.
5. Training and awareness raising
Even the best policies and compliance department are ineffective without a proper implementation strategy. Developing role-specific training programmes, creating a multi-channel communication strategy, and implementing both onboarding and refresher training embed compliance into organisational culture. Using real-world scenarios increases engagement, while measuring effectiveness verifies understanding. A compliance helpline provides support when questions arise, and recognising compliant behaviour reinforces desired actions.
Conclusion
Learning how to build a compliance department is an ongoing commitment to ethical business practices. By following these five steps, your organisation can build a robust compliance function that protects against regulatory violations while supporting business objectives.
