Honourable minister, dear customers, friends and colleagues, ladies and gentlemen.
I was asked to introduce how regulatory information is – and should be – utilized in a business context.
Well, I know something about it, being in a business for almost a nine years.
It boils down to three issues: operative risk management, strategic threats and opportunities and impacts to business value (as part of overall analysis of effectiveness of the legislation.
Firstly I discuss about operative dimension.
According to Corporate Social Responsibility Networks study
55 percent of all companies
that considered themselves as responsible
Claimed that most difficult thing achieving their goals
Was legal monitoring.
That is a paradox… Legal compatibility is not responsible business as such, it is mandatory. To demonstrate this many companies have standard obligations to done this properly.
Operative legal monitoring is about avoiding business risks:
Keeping the products legal, keeping the processes legal.
Manifestation of mistakes are rarely court cases, but loosing business to others,
or risking a company image.
Illegal activities are as bad as they sound.
This is nothing new…
Standard obligations to business and processes have been with us for a long time.
How these obligations are received have changed. Old way of doing things is not enough.
Back in the old days appointed quality manager solely was responsible to fulfil these obligations
– but that’s not in the spirit of quality systems, is it?
Now we need to be sure that organization understands the requirements and is capable acting on it accordingly.
The world is not becoming any simpler,
On a contrary more complex. Legislators are active on many levels, and regulation is in more detail.
And requirements are not a privilege of legislators alone, insurance companies, distributors, NGOs and many more are setting their own agenda for companies to fulfil.
As a service this aims to take relevant content in the focus. Trained eye - with experience - is always more efficient than in addition to other duties
Secondly, I want to talk about strategic aspects of regulation.
As trends shape up the future business environment as they always changed.
Legal or political analysis is often neglected or overlooked.
Some say that legislation and business are on a different worlds of their own, but that is, frankly, short sighted.
New RED directive almost ruined a business of a Finnish customer, while interpretations of effective and efficient use of radio spectrum were overemphasized by the authorities.
Sometimes regulation lags behind the technical advancements, sometimes technical advancements lack behind the political reality.
One should not forgot the impacts to whole value chain.
Obligations might be on your competition, new entries, customers or suppliers.
As well as it might be a burden to fulfil new requirements, it also hinders the competition thus enabling better margins.
Sometimes though tougher requirements mean that whole industry will suffer and substitutes gain marketshares.
The key thing is to understand the legal base – where the regulatory targets come from.
Understanding the processes helps to predict the speed how fast the regulation is coming and how much time you and your competition has time to react.
Also public and political pressure push legislation and its interpretation forward.
The old saying that:
What you cannot see, cannot hurt you! Doesn’t apply.
One has to be able to pinpoint the most essential risks and try her best to adapt to the change.
Sometimes even drastic measures are needed to be able to survive.
More time you have, less expensive it is. Foresight is better than ever so strong hindsight.
Thirdly I want to discuss about value dimension of all this.
If indeed environment changes, it has to mean, that business has to change and it certainly means that its value changes as well.
As I discussed previously regulation might have both positive and negative impacts on business. It is not always a bad thing. When there are new threats, there are also opportunities to be exploited.
With decent amount of expertize it is possible to calculate and quite accurately estimate the changes. Magnitude and direction first, if necessary in more detail, well grounded numeric values as well.
From operative legal monitoring to strategic risks assessments
To value analyses of those impacts.
It is evident that this has macroeconomic consequences on the society as well
Every action has an equal counteraction. If prices go up, consumption goes down.
This increases or decreases willingness to invest.
Every regulation has its aims and goals.
Comparative analyses on other markets can really well demonstrate the effectiveness of the regulation.
All in all the regulatory affairs is a way to understand the environment.
If the need is operative risk management, it can be dealt with tailored monitoring services.
If the need is strategic threats and opportunities analysis, it can be a joint project to determine logical next steps.
If the need is numeric investment value analysis, it can be done alongside of economic factors.
If the need is to understand the effectiveness of regulation in achieving its goals, we make an comparative analysis for you.
Understanding the legal environment is only way to determine where you want to go and where you need to be heard.
Thank you.
