Over the past several years, GHY International has published a number of white papers dealing with the issue of international trade compliance. In past reports we highlighted the growing need for companies to adopt an integrated approach to dealing with compliance, described the best practices used by industry leaders, looked at the importance of corporate leadership to advancing the process, and went in-depth on vital role played by corporate champions in the development and implementation of a winning compliance strategy.
In our fifth white paper, released today, we examine how leading traders use key performance indicators (KPIs), to track a range of trade compliance variables: both those which support their routine functions and operational business objectives, but also more existential ones that are more broadly aligned to the organization’s vision, mission, values, strategy, risk intelligence, and brand reputation.
Successful global organizations integrate compliance into their business practices across internal functions, with their supply chain partners, into their sales activities and business development plans, in all of the jurisdictions that they are engaged in. Beyond basic adherence to regulations as a legal obligation, compliance is viewed by senior leadership as integral to business success, as it protects the enterprise from risks and liabilities, while ensuring the focus of business units is on achieving strategic and financial targets.
Seasoned traders employ key performance measures or KPIs to track and monitor critical metrics that have a direct or indirect compliance consequence. A recent survey of Canadian businesses conducted by GHY in connection with IE Canada (Canadian Association of Importers and Exporters) and the CITT (Canadian Institute of Traffic and Transportation) suggests KPIs for compliance are in their early stages of use for compliance variables, with most measures centered on compliance outcomes such as fines, penalties, audit consequences, storage, and demurrage.
Best practice leaders take KPIs to an even higher level, also utilizing them to monitor the trade compliance linkages to their company vision, mission, and values. These organizations employ a range of indicators developed for both internal departments and external partners which measure compliance-related activities that create value for the enterprise, mitigate risks, and enhance its brand and reputation.
In a new series of posts, each week over the next couple of months we will be focusing on one aspect of the latest white paper in more detail.