Man-made attacks on supply chains were increasing – as the recent Petya cyber attack demonstrated – and transport and logistics companies would need to take security concerns into account when developing their risk and compliance strategies, said Julian Smith, global transportation and logistics leader at professional services firm, PWC.
He said that while no supply chain would ever be 100% secure, better technology and well-trained people could make a big difference.
Compliance and risk management strategies went hand-in-hand as “imperative parts of good corporate governance” for transportation and logistics companies, he added.
“The transportation and logistics sector does not only have to secure itself against operational risks, but against reputational damage, costly delays and piracy,” highlighted Smith.
He pointed out that the requirements of corporate governance within the sector were increasing, noting that companies that proactively decided to implement a compliance management system were eager to detect and eliminate weaknesses and gaps.
Compliance regulations are the link between governmental regulation on the one hand and employees on the other.
“Pre-defined responsibilities, control systems, standards and codes of conduct enable employees to make informed business decisions quickly and with confidence,” Smith explained.
A spokesperson for the Compliance Institute Southern Africa told FTW that keeping a company compliant with everchanging regulatory requirements could be challenging but that if business owners did not recognise the importance of establishing a compliance function and/ or embedding a culture of compliance then they were not managing their risks adequately.
Furthermore, she noted, a compliance function without a monitoring programme could be described as “an elephant without a trunk.
It smells nothing and has a vastly diminished profile.
“Effective monitoring aims to check that people are doing what they should be doing and that the system is operating satisfactorily. Monitoring is what frequently identifies problems and a failure to monitor adequately can be regarded as a lack of real commitment,” she commented.
