Lack of internal controls or failing risk management may lead to loss-making contracts or even “betting the company”. And even if business models and corporate policies are clearly defined, they are still challenged for a unique business opportunity and they continuously evolve. A contract approval workflow anchors internal controls and risk management in your business processes.
A Tour de France stage is a circus where everyone has their own role and place. Before the start, ahead of the peloton, during the race, at the finish line and afterwards outside the cyclists’ hotels.
Internal controls affect the entire contracting cycle. This means: multiple checks be carried out by various stakeholders.
- Contracts are sometimes drafted or negotiated by one single person, too inexperienced to negotiate the right terms or too eager to close the deal.
- It’s a challenge to have your people apply all business models, corporate policies, rules on ethical conduct, integrity and CSR consistently. You want to give your people as much responsibility and freedom as possible. But in compliance with the rules.
- The larger your organisation, the more challenging it is to get everyone to appear in the race timely.
- Executives – who are end-responsible – should be involved timely. But not too early.
A poor compliance programme may contain loopholes and does not prevent errors. It’s probably not simple, not self-explanatory, and may even be inefficient.