6.3: Compliance

Last updated
Save as PDF

Page ID: 89147

\( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \) \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)\(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\) \(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\)\(\newcommand{\AA}{\unicode[.8,0]{x212B}}\)

What are the Different Types of Compliance?

Compliance awareness is essential for businesses to grow and as they are exposed to new audits and challenges. Almost all business activities have corresponding compliance regulations and standards that must be met. These regulations pertain to a wide swath of business activities: data privacy, security, environmental concerns, finance, and numerous other business practices.

There are three main types of compliance; corporate, regulatory and industry. All three types of compliance involve a framework of regulations, practices, and rules that must be followed.

What is Compliance in Business?

Corporate compliance refers to the protocols, rules, and codes of conduct that a business carries out. A corporate compliance framework helps a business to maintain high operating standards and avoid internal conflicts.

The definition of compliance is “the action of complying with a command,” or “the state of meeting rules or standards.” In the corporate world, it’s defined as the process of making sure a company and it's employees follow all laws, regulations, standards, and ethical practices that apply to that organization and the industry they do business in.

Corporate compliance covers both internal policies and procedures and federal and state laws. Enforcing compliance helps a company prevent and detect rules violations, protecting the organization from fines and lawsuits. The compliance process should be ongoing. Many organizations consistently and accurately govern their compliance policies over time.

Some of the steps that can be taken to enforce corporate compliance include:

Keep track of workplace industry standards
Schedule regular internal audits
Conduct regular employee training

The Purpose of a Corporate Compliance Program

The purpose is to protect a business. But the return on investment could be significant, helping a company avoid waste, fraud, abuse, discrimination, and other practices that disrupt operations and put any company at risk.

Corporate compliance program needs to be integrated with all compliance efforts enterprise-wide, from managing external regulations and internal policies to comprehensive employee training. By ensuring all departments and staff are working together to maintain standards, a company can mitigate the risk of significant failures and violations.