Effective management of legal requirements is a fundamental part of any company’s operations. These requirements can originate from various sources, such as national and international laws, government regulations, industry standards, and sector-specific guidelines, which may vary based on the organization’s size, activities, and geographical scope.

Complying with these requirements is not only essential to avoid legal sanctions but also to build a solid reputation and foster trust among customers, partners, and stakeholders. Furthermore, recording legal requirements is the foundation of all environmental and risk prevention management; therefore, demonstrating compliance with these requirements determines the approval of permits granted by competent authorities.

The primary mechanism companies use to track and comply with regulations is the creation of a legal requirements matrix, which is typically semi-manually developed with the assistance of basic applications to build electronic spreadsheets (e.g., Microsoft Excel).

While such a document allows for a broad overview of the regulatory landscape affecting the organization, it lacks dynamism and does not provide the capability to manage the evidence of compliance associated with legal requirements.

Main Disadvantages of Using a Legal Requirements Matrix

• It can be a very complex document as it must include all the rules, laws, and standards applicable to the organization based on its activities, sector, location, etc. This involves a large amount of information that can be difficult to organize, classify, and update using semi-manual methods, such as spreadsheet creation.
  Additionally, a legal requirements matrix may contain redundant or unnecessary information, making it challenging to identify and track the most relevant or priority requirements.
• A legal requirements matrix requires constant maintenance since rules, laws, and standards can change or be updated frequently, necessitating regular review and modification of the document. This maintenance demands considerable time and effort, potentially diverting resources from other organizational activities or processes. Moreover, maintaining a legal requirements matrix carries the risk of errors or outdated information if not properly managed.
• It can be an ineffective tool, providing more general and static information on legal requirements, making it difficult to adapt or modify according to the particularities or needs of each organization.
• It can be a poorly integrated tool, as it can be challenging to relate or complement it with other management tools or systems, such as quality management, environmental management, and safety systems.

A Digital Solution for Managing Legal Requirements

Digital tools are resources that facilitate and optimize legal compliance management for companies by allowing them to know, control, verify, and demonstrate compliance with applicable legal requirements, as well as identify and prevent legal risks associated with their activities.{{cta(‘8aebd3b9-4f21-4fdb-ae8d-f54cad7589ce’,’justifycenter’)}}

By using specialized software platforms, companies can use records to create detailed electronic registers for each specific legal requirement. Each record provides comprehensive information about the requirement, including its description, implementation date, assigned responsibilities, actions taken, and any associated documentation.

Digital records allow companies to keep legal requirements updated easily and quickly by automatically and continuously consulting and analyzing regulations, laws, and jurisprudence, and generating notifications that alert about changes or new developments.

In contrast, a legal requirements matrix requires an exhaustive search and analysis of regulations, which must be conducted manually and periodically, potentially leading to increased time, effort, and the risk of errors or outdated information.

Additionally, using digital records for requirements allows for the customization of information according to the needs, objectives, and characteristics of each organization, as requirements can be created, modified, deleted, filtered, sorted, and grouped according to different criteria (such as type, origin, responsible party, status, etc.).

Conversely, a legal requirements matrix provides more generic and standard information on legal requirements, making it difficult to adapt or modify.

Similarly, having information based on digital records enables integration with other management tools or systems, such as quality management, environmental management, and occupational health and safety systems. Consequently, this facilitates the generation of reports, indicators, alerts, and evidence that help verify, control, demonstrate, and improve compliance.

A traditional legal requirements matrix only offers isolated and static information that can be difficult to relate or complement with other management tools or systems.

In any case, the legal matrix is no more than a report that can be generated by a digital platform based on the information recorded in each requirement’s records, presenting the state of compliance at any given time with the guarantee that the available information is reliable and fully updated.

Reporting through PowerBI

Another significant advantage of using digital records for legal requirements is their high potential for integrating information with other systems, such as integration with this Business Intelligence tool.

Through customized reports and dashboards configured based on any requirement, structured visualization of the overall obligations’ status is possible, as well as consolidated information by different departments, areas, operations, or even individual users. This information is presented in real-time to enhance decision-making and the determination of immediate actions.

In conclusion, managing legal compliance is a key aspect in building a solid foundation for the sustainable growth and reputation of organizations. Implementing a legal requirements management system to demonstrate compliance is a strategic decision that not only protects the company from legal risks but also promotes a culture of responsibility and business ethics.

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