Practical insights for compliance and ethics professionals and commentary on the intersection of compliance and culture.

Compliance 101: A quick guide

As this blog intends to demonstrate, compliance is both a subject for practitioners as well as a topic of general interest that shows up in business and the news all the time. Current and historical events, popular culture, and all types of jobs touch upon compliance subjects on a daily basis. Just as the law is everywhere in life, so are regulations and questions of ethics and integrity.

However, for such a ubiquitous subject, typical awareness of compliance matters is often very low. People may be very used to asking themselves whether events they read about in the news match with their own general norms. There is often a challenge between existing rules and what may be morally acceptable. This perceived discrepancy is nuanced and can prove hard to navigate without frustration.

As a prelude, ask yourself: have you ever heard of any current events regarding compliance? Or, perhaps, have you ever encountered any problematic dilemmas in your own life, which provoked curiosity about ethical choices and integrity? These could be perhaps news stories, personal experiences, or commercial situations you have observed in work or at school. These can include moral dilemmas and “catch 22” situations where commercial interests and personal obligations collide, as well as stories of crises and scandals. What have you heard, if anything, about the meaning and function of compliance?

Generally speaking, the main definitions of compliance as a discipline include:

  • Conforming to relevant laws, regulations, principles, and rules, standards and codes of conduct applicable to an organization’s activities, in letter and in spirit, or the process of doing so. This may concern gray areas, with no strict answer or universal judgment.
  • The aspiration that informs organizations in their efforts to ensure that they are aware of, and take steps to comply with, all relevant laws and regulations. This can be both prescriptive, referring to such laws and regulations that already exist, or predictive, referring to attempts to anticipate future laws and regulations.
  • Also describes efforts to ensure that organizations are abiding by both industry regulations and government legislation. This practice area is often called regulatory compliance.
  • Finally, emphasizes acting with integrity and therefore draws heavily from the study of ethics and morality, even extending philosophy and psychology. A modern goal of an effective compliance program is to design governance and control structures that encourage employee and organizational integrity and create disincentives against and penalties for dishonest or unethical behavior.

Typical tasks and responsibilities of a compliance professional include:

  • Advising business partners in identifying and assessing compliance risks (of legal or regulatory sanctions, material financial loss, or reputational damage) and effectively managing and mitigating these risks
  • Modeling good conduct and proscribed values of integrity and ethical behavior
  • Training employees and management on compliance matters
  • Monitoring business implementation of key compliance policies and procedures, and reporting accordingly to management on efficacy and accuracy of same
  • Coordinating regulatory stakeholder management

Now, check your impressions about what compliance means, and consider this in concrete terms and from your own perspective. Hopefully you now have a more meaningful insight on what compliance is and means in context of both current and historical events

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