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What is compliance and what role does it play within a company?

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The term “compliance” refers to crime prevention and adherence to regulations, laws, and standards in the business sphere. An organization adopts a set of such practices and procedures to ensure that its activities and operations are conducted in accordance with internal and external laws, regulations, ethical standards, and best practices.


he purpose of compliance is to prevent and detect potential legal or regulatory violations within an organization and ensure that the company operates ethically. This involves establishing internal policies, controls, training, and internal audits to ensure compliance with applicable regulations. 

Compliance can encompass various areas, including data protection, Anti-Money Laundering (AML) prevention, business ethics, and workplace safety, among others. Many companies also appoint a responsible individual or create a dedicated compliance department to oversee and manage these issues. The significance of this concept has grown in recent years due to the complexity and constant evolution of regulations in the business environment. 

Contents of a compliance program 

The establishment of a comprehensive compliance program begins with the formation of a specialized compliance team responsible for assessing the legal risks that may arise within the organization and effectively managing their consequences. 

Once these risks are identified, protocols and procedures will be established to guide decision-making within the organization. Additionally, a mandatory Code of Ethics will be developed and implemented for all members, an internal reporting channel will be launched, and a disciplinary regime will be put into effect. 

As part of its strategy, the company will design a model for responding to potential legal risks, offer training and awareness programs to employees, and consider the implementation of periodic audits to verify the ongoing effectiveness of the compliance program. This holistic approach aims to strengthen integrity and accountability across all facets of the organization. 

Benefits for companies with optimal compliance systems 

Having robust compliance policies in a company can provide various benefits, both internally and externally. These can be summarized in the following points: 

  • Legal compliance. Ensures that the company complies with all applicable laws and regulations, preventing sanctions and fines. Additionally, it minimizes the risks associated with non-compliance, such as economic losses or damage to the company’s reputation. 
  • Business ethics. Fosters an ethical corporate culture by establishing strong values. This enhances trust and credibility among customers, employees, and partners. 
  • Risk management. Proactively identifies and manages legal and operational risks, reducing the likelihood of fraud and misconduct. 
  • Data protection. Ensures compliance with privacy and data protection laws, acting as a shield around confidential information of clients and employees. Relevant laws that compliance must consider include the General Data Protection Regulation (GDPR) in the European Union, the Children’s Online Privacy Protection Act (COPPA) in the United States, and the Electronic Privacy Regulation in the European Union (ePrivacy). 
  • Process improvement. Establishes clear and efficient procedures, enhancing operational effectiveness and the quality of internal processes. 
  • Organizational culture. Promotes a culture of responsibility, strengthening identity and cohesion within the organization. 
  • Competitiveness and market access. Compliance with legal requirements can be a criterion for accessing certain markets or participating in tenders, thereby improving competitiveness. 
  • Brand reputation. Builds and maintains a positive brand image, attracting customers and business partners who value integrity and business ethics. 
  • Business resilience. Prepares the company to face crises and regulatory changes, facilitating adaptation to changing business environments. 
  • Corporate responsibility. Demonstrates social responsibility and commitment to societal well-being, contributing to a sustainable business environment. 

Certifications and codes to consider for comprehensive and intelligent compliance 

The applicable regulations to ensure compliance in a company may vary depending on the industry, country, and other specific factors. However, there are some general regulations and principles common in many business environments. Let’s review some of these regulatory frameworks, although it’s not necessary for companies to consider all of them to develop a robust compliance system. 

  • Criminal code. This is a set of laws that defines criminal offences and penalties in a specific country. In the context of compliance, companies must comply with the legal provisions set out in this code to avoid criminal prosecution. Relevant aspects include the prevention of economic crimes, such as fraud, corruption and money laundering, among others. Companies can implement compliance programmes to ensure that their operations are aligned with criminal laws and to prevent possible violations. 
  • UNE-ISO 37001. The UNE-ISO 37001 standard specifically focuses on the anti-bribery management system. This standard provides a framework for companies to develop policies and procedures to prevent, detect, and address bribery in all its forms. Complying with ISO 37001 can help companies establish effective controls and demonstrate their commitment to ethical and transparent business practices. 
  • Labour laws. Regulations governing labor relations, including wages, working hours, working conditions, and employee rights. 
  • Anti-Corruption laws. Legislation prohibiting corrupt practices, with a particular focus on the business environment. The U.S. Foreign Corrupt Practices Act (FCPA) would be one of the prominent examples. The FCPA applies to both U.S. companies and foreign companies listed on U.S. exchanges, with oversight from the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice.  
  • Environmental standards. Regulations establishing standards for environmental management and sustainability, such as ISO 14001. Although certification itself is not mandatory, many organizations voluntarily seek it to demonstrate their commitment to best environmental practices. 
  • Competition laws. Regulations governing anti-competitive and monopolistic business practices, promoting fair competition. 
  • Financial laws. Regulations related to accounting, financial reporting, and financial transparency. 
  • Occupational health and safety standards. Regulations establishing standards to ensure the safety and health of employees in the workplace. 
  • Tax Compliance. Regulations related to tax payment and tax reporting. 
  • Quality standards. Standards ensuring the quality of products and services, such as ISO 9001. 
  •  Intellectual property laws. Regulations protecting intellectual property rights, including patents, trademarks, and copyrights. 

Continuous improvement for effective implementation and avoidance of sanctions 

It is crucial for companies to identify and understand the specific regulations that are relevant to their industry and location and establish policies and procedures to comply with these regulations. Additionally, constant monitoring and updating of policies are essential, as regulations may change over time. 

Building a robust regulatory compliance program can be challenging for companies, considering the requirements and standards they must adhere to. However, placing importance on integrating a strong compliance framework into the core of the business, in addition to providing benefits as mentioned earlier, will prevent severe sanctions.

Contact our compliance and fraud prevention experts now.

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