WHAT DOES COMPLIANCE REALLY MEAN?
Compliance has become a talking point in organizations worldwide. But what is the fuzz really about?
Well, the term ‘compliance’ is generally used to describe the adherence to recognized standards of conduct, be it laws, regulations, industry codes or the like.
The terms compliance and ethics are often used interchangeably. While compliance is often seen as living up to the minimum (but critical) standards, ethics often refers to moral principles and norms of behavior that may express the ‘right thing to do’.
Of course, as societal expectations develop over time, ethical standards also evolve and laws change in response, thereby shifting the expected norm for what is expected and must be complied with.
It is therefore important for leaders to stay informed about societal and legal developments in order to guide employee (and own) conduct and to protect their companies.
WHY DOES IT MATTER?
So why bother? Well, the topic has become imperative in today’s society in order to ensure the trust of employees, customers, suppliers, investors and the public at large.
Arguably, leaders have a moral obligation to ensure proper conduct, but they also make efforts to secure a legal safeguard to protect themselves and their companies from major legal, financial and reputational risks - and outright company collapses.
The topic is not to be taken lightly with increase in societal expectations and regulations (e.g. in Spain, Italy, France, Germany, Brazil), as well as stricter enforcement worldwide. See more about national anti-corruption laws here.
Combined with unprecedented transparency arising from technological developments and social media, companies and their leaders are exposed like never before.
Recent billion-dollar ethical breakdowns at VW and Wells Fargo have highlighted the risk associated with irresponsible business practices.
Ensuring responsible conduct has become an absolute must for companies worldwide in order to maintain a license to operate for any company of any size, anywhere in the world.