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Strengthen Your Marketing Compliance During Covid-19

Updated: Apr 5, 2023

The Covid-19 pandemic and the ensuing government interventions to flatten the curve have caused a flux of operational issues for businesses globally. Those dependent on travel, such as the hospitality and leisure sector and retail establishments with high fixed costs reliant on in-store sales, are navigating a particularly challenging year.

In the midst of this crisis, businesses need to ensure that their compliance programs adapt accordingly. This includes Sales and Marketing functions, which, if overlooked, can lead to significant risks.

While compliance risks span across functions, Marketing may not be top of mind when assessing potential liability. Marketing compliance relates to internal controls that affect how a company secures new business, manages its branding and promotes itself to customers. Specific regulations are highly dependent on where the company is located, where the customers are based, and what industry the company operates in. In brief, marketing compliance is particularly important in highly-regulated industries and in companies where marketing teams may not be aware of what is at stake.

As one high-profile example, several global investment banks hired the children of influential government officials for the express purpose of securing new business. As part of this, they created a separate channel to progress unqualified applicants through the hiring process and subsequently tracked the business awarded because of these hires. In doing so, they ran afoul of the U.S. Foreign Corrupt Practices Act (FCPA), and this resulted in hundreds of millions of dollars in fines and other penalties imposed by the U.S. Department of Justice, the Securities and Exchange Commission, and the Federal Reserve.

Beyond the risks of winning new work, Chief Marketing Officers (CMOs) need to have oversight on branding and promotional activities. Companies tend to rely heavily on social media as part of their digital marketing strategy. Social media alone presents a set of legal risks, listed by Thomson Reuters as “privacy laws; content ownership; intellectual property infringement; workplace harassment and discrimination; defamation; insider trading; and marketing and advertising regulations.”

CMOs must work closely with executive teams, including Legal, Risk and Compliance leaders to ensure that they have a robust program in place to manage and mitigate potential Sales & Marketing risks. When it comes to corporate reputation, every functional leader should be in regular communication with Legal and Compliance teams to avoid potential issues that could materially impact the bottom line.

Based on my experience with organizations across various industry sectors, there are a couple of additional risks that companies should be circumspect in addressing:

Data Privacy

Marketers need to remain closely tied to customer experience, including ensuring the privacy of retail customers. For one business-to-consumer (B2C) company, a customer claimed that their data privacy had been violated because app information had been sent to the company’s server in another region without their permission. This escalated into legal action, and marketing had to work closely with Compliance and Legal to provide documentation for discovery and then to manage the impact on the brand.

In another instance, the Marketing division at a different company had to fully cleanse its database, comprising thousands of contacts, to ensure compliance with both the European Union’s General Data Protection Regulation (GDPR) and Hong Kong’s Personal Data (Privacy) Ordinance (PDPO).


In launching a retail product in a new market, a B2C company had to review the discounts offered on its website as well as its giveaway and sweepstakes campaigns to ensure compliance with the country’s specific consumer protection and anti-bribery regulations.

Pricing risk also relates back to how companies secure new business. Depending on the context, if governments or courts think your prices are too low, it could be construed as predatory pricing. If your prices are too high, it could be construed as price gouging. If your prices are the same as your competitors, you could be charged with price-fixing or collusion.

Steps Toward Marketing Compliance

What can companies do to protect their reputation? With the above in mind, there are specific steps companies can take to optimize how they handle marketing compliance risks:

1. Conduct a self-audit. Review your current risks against your compliance and internal controls policies. Have you recently updated your compliance programs to adjust to the “new normal”?

2. Retain a compliance specialist. Look internally across your organization, or seek assistance from a specialist firm to establish or review your existing program. Perhaps it may uncover areas for improvement you may not have identified.

3. Review and update policies and procedures. This should be part of a regular review process. Are your compliance protocols up to the relevant International Organization for Standardization (ISO) standards?

4. Maintain transparent communication. Is everyone on your team aware of the latest policies? Have you implemented and updated compliance training?

5. Monitor marketing and sales communications. This is particularly important where remote work remains in effect. If you are maintaining the status quo, you may have less accountability than in your usual office environment.

6. Update your whistleblower policy. Keep an ear out for complaints about marketing and sales practices. Are employees able to access your whistleblower policy and hotline?

Marketing compliance should remain top of mind, but it need not be overly complex. By ensuring that you have the right programs in place with clearly defined risk and controls processes, you will enhance your ability to better manage unforeseen issues that may arise and safeguard your company’s reputation.

Published in Forbes.


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