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Compliance Key Performance Indicators (KPIs): A Comprehensive Guide

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Introduction

Compliance KPIs are essential for measuring the effectiveness of an organization’s compliance efforts. They should be specific, measurable, achievable, relevant, and time-bound (SMART). This guide covers the importance of directional and specific KPIs and lists 10 important compliance KPIs to track.

Directional vs Specific KPIs

  • Directional: The metric should show if your business is improving in certain elements of your compliance efforts.
  • Specific: Specific KPIs are more likely to be achieved.

10 Important Compliance KPIs to Track

Here are the top compliance KPIs to track:

  1. Mean Time to Issue Discovery

    The time it takes to discover a compliance issue.

  2. Mean Time to Issue Resolution

    The time it takes to resolve a compliance issue.

  3. Compliance Expense per Issue

    The average cost of a compliance issue.

  4. Total Regulatory Compliance Expense

    The total amount spent on fines from compliance issues over a set period.

  5. Risk Severity Gap

    The difference between predicted and actual compliance risks.

  6. Composite Risk Index

    A way to understand the likelihood and impact of potential risks.

  7. HR Regulatory Compliance Expense

    The expense related to regulatory compliance issues by the human resources department.

  8. Compliance Training Expense

    The total amount spent on compliance training divided by the number of employees.

  9. Compliance Training Headcount

    The number of employees who undertake compliance training over a period.

  10. Number of Misconduct Reports

    The number of misconduct reports received.

Frequently Asked Questions

Here are some frequently asked questions about compliance KPIs:

  • How to measure compliance rate?
  • What makes a good compliance function?
  • How do compliance tools help?

Conclusion

Tracking compliance KPIs is essential for ensuring that an organization’s compliance strategy is working effectively. We recommend using ComplyLog’s suite of tools to streamline processes and stay compliant with key pieces of legislation.

References and Further Reading

Here are some references and further reading on this topic:

  • Company code of conduct examples
  • Benefits of a code of ethics
  • How to create a compliance communication strategy
  • How to measure the effectiveness of whistleblowing
  • How to write a conflict of interest policy + template