Finance companies ensure regulatory compliance and good corporate governance through robust frameworks, board oversight, employee training, risk management, RegTech adoption, transparent reporting, and secure whistleblower systems—promoting ethical conduct, accountability, and adherence to financial laws (OECD, 2024; World Bank, 2025).

✅ 1. Establish a Robust Compliance Framework

Key Actions:

• Create a dedicated compliance department.
• Develop a compliance manual aligned with local and international regulations (e.g., Basel III, AML/KYC rules, IFRS, FATCA).
• Regularly update policies to reflect new laws and governance codes (e.g., OECD Principles of Corporate Governance).

Governance Link:

A strong compliance structure promotes transparency, accountability, and regulatory integrity—core principles of good corporate governance.

🔍 2. Enhance Transparency and Disclosure

Key Actions:

• Timely disclosure of financial performance, risk exposures, and related-party transactions.
• Use IFRS-based reporting for global consistency.
• Ensure audit committees review all financial disclosures before publication.

Governance Link:

Transparent reporting strengthens shareholder confidence and ensures stakeholder inclusiveness.

👨‍⚖️ 3. Implement Effective Risk Management and Internal Control Systems

Key Actions:

• Adopt enterprise risk management (ERM) systems to monitor financial, operational, legal, and reputational risks.
• Ensure regular internal audits aligned with International Standards on Auditing (ISA).
• Set up whistleblower mechanisms and fraud detection systems.

Governance Link:

This aligns with the governance principles of responsibility and prudence, ensuring the company acts in the long-term interest of stakeholders.

🧑‍💼 4. Board Oversight and Independence

Key Actions:

• Establish an independent board of directors, including a risk and audit committee.
• Provide board training on regulatory changes and compliance duties.
• Clearly separate management from board oversight roles.

Governance Link:

Strong board structures are essential for strategic guidance, effective oversight, and ethics enforcement.

🌍 5. Compliance with ESG and Sustainability Reporting

Key Actions:

• Adopt frameworks like GRI, SASB, or TCFD to report on Environmental, Social, and Governance (ESG) factors.
• Monitor regulatory expectations around climate risk disclosure and social responsibility.

Governance Link:

Sustainability compliance enhances stakeholder engagement and ensures long-term value creation — central to good governance.

🧠 6. Leverage Technology for Compliance (RegTech)

Key Actions:

• Use AI and machine learning for real-time monitoring of transactions and early warning systems.
• Implement RegTech solutions for anti-money laundering (AML), customer due diligence (CDD), and reporting automation.

Governance Link:

Technology supports efficiency, consistency, and accuracy in meeting compliance and governance requirements.

🧾 7. Continuous Monitoring, Auditing, and Reporting

Key Actions:

• Conduct regular compliance audits and gap assessments.
• Report non-compliance incidents and enforce corrective actions.
• Benchmark governance practices with international best practices (e.g., COSO framework, King IV Code).

Governance Link:

Continuous oversight ensures compliance maturity, drives corporate ethics, and minimizes legal/regulatory exposure.

Although I agree with the answers given above, I would add these issues to be considered:

1- Creating a clear, understandable, complete conceptual framework that must be constantly adapted to developments and changes

2- Internal Control and Audit totally independent of corporate management systems.

3- The supervisory board must also be independent

4- Accountability must go with transparency

5- Employee motivation

6- Ensuring integrity through the mechanisms of the Code of Ethics.

7- In the conditions of IT and AI developments, all criteria must provide the necessary measures to adapt and ensure the proper effectiveness and efficiency of operation.

🔍 1. Understand Applicable Regulations

Finance companies must first identify all relevant regulations, such as:

• International regulations: Basel III, IFRS, FATCA, AML directives.
• National regulations: SEC (US), FCA (UK), OJK (Indonesia), etc.
• Industry-specific guidelines: ISO standards, risk frameworks (e.g., COSO, COBIT).

🧱 2. Establish a Compliance Framework

A clear compliance framework should include:

• Policies & Procedures: Documented protocols for operations, financial reporting, and conduct.
• Compliance Officer / Team: Dedicated roles responsible for monitoring and enforcing compliance.
• Code of Ethics: Promotes integrity and transparency in all business activities.

📊 3. Implement Robust Internal Controls

Controls help detect and prevent non-compliance:

• Segregation of duties: Avoid conflicts of interest.
• Audit trails: Ensure accountability and traceability.
• Risk management systems: Identify and mitigate financial, operational, and reputational risks.

📈 4. Accurate Financial Reporting

Ensure that:

• All financial statements are prepared in accordance with GAAP or IFRS.
• Disclosures are complete, timely, and transparent.
• Reports undergo regular internal and external audits.

🔐 5. Ensure Data Security & Privacy

With increasing digital exposure:

• Comply with data protection laws (e.g., GDPR, CCPA).
• Use encryption, access controls, and data loss prevention tools.
• Regularly conduct cybersecurity assessments.

👨‍🏫 6. Train Employees

• Conduct mandatory compliance training on key regulations (e.g., AML, KYC, anti-bribery).
• Foster a compliance culture where staff understand and support governance principles.

📅 7. Continuous Monitoring & Reporting

• Use compliance monitoring tools or RegTech solutions.
• Periodically review compliance programs for effectiveness.
• Report compliance status to the board and regulators.

⚖️ 8. Engage with Regulators Proactively

• Maintain open communication with regulatory bodies.
• Participate in industry forums and consultations.
• Stay updated on regulatory changes and adjust policies accordingly.

✅ 9. Whistleblower and Incident Management Mechanism

• Establish secure channels for employees to report unethical behavior.
• Implement a non-retaliation policy.
• Ensure swift investigation and resolution of reported issues.

💼 10. Board Oversight and Corporate Governance Integration

• The board should: Review compliance reports regularly. Ensure alignment of compliance with strategic objectives. Hold management accountable for governance failures.