Compliance refers to rules, regulations, laws, policies, and standards governing an industry or organization. It involves ensuring that individuals and organizations act under the requirements set forth by governing bodies and conduct their business activities ethically and responsibly.
Compliance can encompass activities, including financial reporting, data privacy and security, anti-money laundering, anti-bribery and corruption, environmental regulations, and more. Organizations may have compliance programs to help them manage and monitor their compliance obligations and to identify and mitigate potential risks and violations.
Compliance is crucial to a business’s success because it can help mitigate risk and potential liabilities, enhance transparency, build reputation, and build trust with customers, employees, and stakeholders. Non-compliance can result in consequences, such as legal fines, loss of business, and reputational damage.