What is compliance?

Compliance is more than just obeying laws

‘Behaving in accordance with applicable law’ – this is one of the official definitions of compliance. However, compliance means much more, that is to say, the degree of compliance with rules. Those who are compliant not only adhere to law and order, but ideally also to the organisation’s policies and system of values. Complying with these rules is unavoidable, particularly in the business world.

As such, compliance means more than avoiding violations of the law. In addition to mandatory rules it also covers rules that companies voluntarily submit to such as standards, as well as rules companies impose upon themselves for example, as part of a code of conduct.

Non-compliance can have serious consequences to both individuals and for the entire organisation in general. Compliance is a key requirement for long-term sustainable success. Reliability, continuity and trust can only exist in an organisation if it is clearly committed to compliance.

Briefly explained: Compliance...

  1. means roughly: Complying with laws and rules.
  2. is enormously important for risk prevention and the reputation of companies
  3. Training of employees is possible using cost-efficient and modern e-learning solutions.

Compliance is efficient risk minimization

No company wants civil or even criminal proceedings initiated by legal violations. However, non-compliance can lead to more than just legal problems. Companies that are not compliant often suffer a massive loss of reputation. However, the long-term consequences of not following the law are even more far-reaching. High fines and the loss of customers lead to declining sales and the organization may suffer lasting damage.

On the other hand, companies that take the issue seriously and have an adequate management system for complying with the law as well as orienting themselves to their own value system make a good impression. Many large and, above all, public-sector customers usually check the efforts of potential contractors to ensure compliance in advance. A positive audit is often one of the key criteria for awarding a contract.

Companies therefore have a great responsibility to protect themselves, their staff and also their clients from unpleasant consequences and to provide their customers with the necessary security.

Through optimal compliance management, organizations ensure adherence to national and international law as well as self-imposed rules and behaviors.

Further information on ‘Compliance management’.

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