The arrival of social media has brought about two things: unparalleled visibility into a company’s operations; and the new ability for others to hold companies accountable for their mistakes. And when companies do know which regulations apply to them, there’s also the risk that your compliance program can’t meet those requirements. It also includes studying their meanings and how they evolved over time. Together, those forces mean that companies can suffer brutal consequences for misconduct—bad headlines, consumer boycotts, business partners canceling contracts, and more. Following a set of rules, known as compliance, is part of doing business whether you’re an executive, manager, sales representative, or a business owner. So compliance officers will design compliance programs to develop the “how” part. Internal standards, values, policies, etc. You have a body of people somehow affiliated with one enterprise (the “corporate” part) who must obey certain rules (the “compliance” part). So as challenging as compliance may be—when done well, compliance becomes a massive strategic advantage. Siteware, a management, engagement and technology company that was founded in 2000, says the following about the term in the world of business: “Being able to say that a company is in strategic compliance is by itself a fundamental business strategy. These officers make sure that their company and employees comply with external and internal regulations, bylaws, policies, etc. For example, the FCPA prohibits bribing foreign government officials as we mentioned. Remember: we are all someone else’s third party. Regulators enact rules to address all sorts of subjects, and companies need compliance programs to address those issues somehow. … Above all, effective compliance programs make your business a more attractive partner to other businesses. Even when a company does violate the rules (which is bound to happen eventually), the. In business ethics contexts, compliance generally refers to a company's or a business person's conformity with relevant laws and regulations—that is, following the rules set out by government. Compliance Meaning. What does compliance mean in business? These include data security requirements, PCI-DSS (Payment Card Industry Data Security Standard), and HIPAA (Health Insurance Portability and Accountability Act of 1996), regulation for the health care industry. Corporate Compliance: the actions and programs an organization sets in place to ensure compliance with internal policies, procedures, and accepted behavior, as well as external regulations.”. If you want consumers, competitors, suppliers, and other stakeholders in the marketplace to view your business as professional, reliable, honest, and well run, complying to a set of values and high standards that you have set yourself is crucial. In addition, best practices suggest that a company should implement software and databases to automatically keep track of all the data and help audit performance management, compliance risk management factors, and more. For example, all publicly traded businesses must publish quarterly financial statements; those statements must include certain financial data, calculated according to certain financial standards. MktoForms2.loadForm("//app-ab42.marketo.com", "665-ZAL-065", 1703); MktoForms2.loadForm("//app-ab42.marketo.com", "665-ZAL-065", 1730); These include data security requirements, (Payment Card Industry Data Security Standard), and. For example, your due diligence program may overlook too many third parties, or your HR department doesn’t collect sufficient data to study pay equity across gender or race. Or, any company that loses the personal information of customers who are EU citizens must disclose that breach within 72 hours, according to the General Data Protection Regulation (GDPR). A strong compliance program can also help a company identify emerging risks earlier, which gives it more time to respond. So compliance officers will design compliance programs to develop the “how” part. These are just a few of the many laws governing how businesses in the US can operate. Third, and to that point, compliance can make a company a better competitor in the marketplace. Published October 29, 2019 • 2 min read. Then employees must. . Put simply; compliance is all about conforming to a rule or set of rules. Regulatory compliance defines the goals companies want to achieve to ensure that they understand and take the necessary steps to comply with policies, relevant laws, and regulations. Following a set of rules, known as compliance, is part of doing business whether you’re an executive, manager, sales representative, or a business owner.