What is compliance? The term is common in business, so it is worth understanding what it means in practice.
Definition
The word compliance means adherence to applicable requirements.
It is widely used in the legal and corporate world to describe how organizations meet their duties and commitments.
As business and financial networks grow more complex, clear rules and controls become increasingly important.
Origins and international application
International organizations have promoted standards and guidance for public and private activity. For companies, good practices include honest conduct, fair treatment, clear customer information, and reliable products and services.
The United Nations Convention against Corruption is one international reference for prevention, criminalization, international cooperation, and asset recovery.
Its provisions require implementation through each country's legal system; the convention is not itself a single corporate compliance manual.
The OECD Anti-Bribery Convention addresses bribery of foreign public officials in international business transactions.
Bribery can undermine governance, sustainable development, and fair competition.
These frameworks encourage organizations to create effective controls and compete fairly while respecting local law.
In the United States, the Foreign Corrupt Practices Act was enacted in 1977 to address bribery of foreign officials and certain accounting practices.
European compliance practice has also developed around areas such as anti-money-laundering obligations and designated control functions.
Today, compliance connects legal duties, ethical business conduct, and responsible operation in markets.
It also involves systems for identifying and managing legal, operational, and administrative risks.
What is compliance in a company?
A compliance program sets expectations for workplace behavior and guides decisions so the organization can reduce the risk of violations.
Some policies are required by law or regulation; others reflect the organization's own commitments.
Together, policies and procedures make expectations clearer and more consistent.
A program does not automatically exempt a company from criminal or civil liability. Its legal effect depends on the jurisdiction, the offense, and whether controls genuinely worked.
Purpose and function
The first goal is to identify and assess the organization's legal and operational risks.
Other goals include:
- Designing policies and controls for identified risks.
- Supporting responsible, transparent, and sustainable operations.
- Preventing, detecting, and addressing possible breaches.
- Training employees and relevant stakeholders.
- Defining responsibilities related to social impact and corporate commitments.
How is compliance applied in companies and organizations?
A program can include policies and controls in several areas, such as:
Fraud prevention
Define prohibited conduct, warning signs, reporting routes, and appropriate responses.
Anti-money laundering
Where applicable, establish measures to prevent illicit proceeds from entering the financial system.
Data protection
Define how information is collected, used, retained, and secured under applicable privacy requirements.
Financial and tax compliance
Keep accounting and tax processes aligned with the laws and standards that apply to the organization.
How to build a compliance program
A program needs documented policies and procedures that reflect real risks and help shape workplace conduct.
They should express the organization's priorities and guide decisions, including those of senior management.
Some personnel policies are legally required, depending on the jurisdiction and sector.
A practical policy-management process includes:
Build a qualified team
Assign people with the expertise and authority needed to draft, review, implement, and maintain policies.
Roles may include:
- Policy oversight committee: leaders and stakeholders who set direction and monitor application.
- Document administrators: coordinators who manage versions, approvals, and access to current policies.
- Policy owners and authors: people accountable for the document's content and lifecycle.
- Reviewers: specialists who evaluate and recommend changes.
- Approvers: authorized people who grant final approval.
Set a strategy
Use a clear strategy as the reference for the policy program. Communicate it so employees understand both expectations and reasons.
Review the code of ethics alongside policies so that commitments remain consistent.
Prioritize policies and procedures
Start with the highest risks and the most important legal or organizational requirements.
Good policy management does more than satisfy a checklist: it can strengthen trust when the organization follows its own rules.
Compliance and the compliance officer
Both depend on corporate ethics . A program defines controls and expectations, while a compliance officer helps assess risks and coordinate their implementation.
The officer needs access to information, suitable independence, and support from leadership.
The work can be organized around:
Identification
Map legal obligations and material risks.
Prevention
Use training, communication, controls, and reporting channels to reduce risks.
Management
Assess and investigate concerns through fair, documented procedures.
Response
Take corrective action and follow through on remedies for issues involving corporate ethics .
Compliance officer profile
Knowledge
Relevant knowledge may include risk management, internal audit, law, accounting, and organizational processes.
Experience
The role benefits from experience gathering information and evaluating the operation and results of a compliance program.
Training and credentials
Specialist training can help, but no single course or ISO 37001 credential is universally required for this role.
Academic background
Useful backgrounds include auditing, law, management, human resources, and organizational development.
Collaboration
The officer should work across teams while retaining an objective view of risk and control effectiveness.
Good practices for the compliance officer
The role can contribute by:
- Improving processes.
- Maintaining objective judgment.
- Reinforcing ethical conduct.
- Protecting sensitive information.
- Clarifying accountability.
Curiosity, impartiality, patience, sound judgment, and integrity are valuable qualities.
Compliance and outsourcing
Designing and maintaining policies takes time, expertise, and resources.
An external specialist can help, but the organization remains responsible for its obligations and oversight.
EthicsGlobal offers a 360-degree model intended to support compliance programs and more consistent business processes and corporate culture.
Any service should be adapted to the laws and risks of each place where a company operates.
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