What is Corporate Compliance? Corporate compliance refers to a company's adherence to state and federal laws, regulations, and specifications relevant to its business processes. It involves implementing policies and procedures to prevent and detect violations within the company, ensuring ethical operations and legal conformity. Demo Risk
Things to know about corporate compliance
Why is corporate compliance important What is the purpose of corporate compliance How can businesses create ServiceNow for corporate compliance

Laws and regulations help ensure fair play in the market, protect consumer rights, and create a safe, equitable working environment. That said, the laws by themselves are typically not enough to enforce change—particularly when addressing internal business requirements. Often, the real challenge for businesses lies in understanding and adhering to the complex needs associated with internal compliance. Corporate compliance is the mechanism through which companies ensure that they and their employees are abiding by the legal and ethical standards expected of them. It encompasses everything from internal policies and training programs to auditing and enforcement strategies.

In essence, corporate compliance deals with implementing and maintaining policies and procedures within an organization to ensure all operations align with the company’s ethical standards. While some aspects of corporate compliance can be legally required, many elements are adopted voluntarily to improve corporate governance and operational integrity.

Expand All Collapse All Why is corporate compliance important?

Although it may sometimes seem restrictive, dictating operational scopes within a company, corporate compliance is fundamentally about safeguarding the business from internal risks and ethical breaches. It reinforces the integrity of business operations through the development and enforcement of internal policies and frameworks. These frameworks help maintain a company’s reputation and operational viability by ensuring every action upholds established ethical standards and strategic objectives. More specifically, the importance of corporate compliance extends to:

Accountability

By establishing clear guidelines and procedures, corporate compliance programs outline the responsibilities of individual employees and the organization as a whole. This accountability ensures that all actions align with legal and ethical standards, fostering a culture of integrity while safeguarding the company against making potentially damaging decisions.

Transparency

Transparency is foundational to compliance, as policies demand a clear picture of how businesses operate and what steps they are taking to ensure that they are in line with established expectations. This encourages companies to be more open about their operations, decision-making processes, and business practices. Properly employed, corporate compliance initiatives give internal stakeholders more accurate information about the internal workings of the organization. Perhaps even more importantly, it can also improve relationships with customers, who increasingly value honesty and openness in the businesses they engage with.

Corporate governance

Corporate governance, which focuses on effective management and decision-making, is complemented by thorough compliance programs that ensure that all actions are legally and ethically sound. When aligned, they lead to more efficient and responsible corporate operations.

Employee satisfaction

Knowing that they are part of an organization that operates within legal and ethical behavioral guidelines, employees may develop more pride in the work they do. This kind of positive environment, where ethical conduct is the norm, also contributes to a feeling of value among the workforce, often leading to higher job satisfaction and loyalty.

Environmental sustainability

By ensuring adherence to environmental laws and regulations, corporate compliance programs can help companies reduce their ecological footprint and promote sustainable business practices. This internal commitment to environmental stewardship is crucial for the long-term health of the planet and aligns with growing public and consumer expectations for corporate responsibility.

Protection from legal penalties

While corporate compliance is often more-directly associated with voluntary internal policies, there may still be legal penalties associated with non-compliance in certain areas. By ensuring that a company adheres to all relevant regulations, compliance programs may reduce the risk of legal sanctions.

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What is the purpose of corporate compliance?

A comprehensive corporate compliance program integrates all facets of compliance throughout the organization. This integration extends from managing external regulations and internal policies to conducting thorough employee training. By ensuring that every department and staff member is aligned in maintaining these standards, the risk of major failures and violations is significantly mitigated. This alignment is crucial for the overall health and efficiency of the business.

In the broader perspective, maintaining compliance enables employees to perform their jobs effectively, which in turn allows the company to achieve its goals and foster a culture of empowerment and improved growth. Furthermore, in the event of a lawsuit, a strong corporate compliance program can significantly aid the organization in court—demonstrating the steps the company has taken to remain compliant and creating a paper trail for legal professionals to follow.

How can businesses create a successful corporate compliance program?

With so much as stake (and so much to be gained), establishing an effective corporate compliance program requires a deliberate approach. Key steps that businesses should consider when creating and maintaining successful corporate compliance programs include:

Begin with risk assessments

At its heart, corporate compliance is about countering risk. To do this, businesses first need to identify areas where they are most vulnerable to non-compliance. Regular risk assessments should be conducted to stay ahead of potential issues, considering factors like audit results, litigation history, industry enforcement trends, and employee feedback. These assessments will help in prioritizing resources and tailoring the compliance program to address specific risks more effectively.

Get leadership buy-in

Effective corporate compliance is a company-wide responsibility, and that means it starts with a commitment from leadership. The C-suite and other key decision makers must not only endorse but actively participate in the compliance program. They should have the authority to administer rules and hold staff at all levels accountable. But more than just enforcing compliance, leaders should set the example—modeling ethical behavior, encouraging open communication about compliance, and reinforcing integrity as a core value of the organization.

Develop internal codes, standards, and polices

A well-defined code of conduct should clearly outline the program’s purpose, expectations for behavior, and responsibilities. Additionally, detailed policies and standards must be established, addressing specific areas of compliance relevant to the industry, such as anti-corruption practices, tax compliance, and record retention.

Define a process for reporting violations or making requests

When everyone has a voice, it makes the organization stronger. Technology can streamline the process through which employees report compliance issues, whether they are based on operational concerns or legal requirements. This could include submitting compliance requests, reporting complaints, or noting incidents. Additionally, maintaining a reliable system for tracking how each report or request is handled ensures fair treatment while also providing essential documentation that can be referenced in the event that the company’s actions are ever called into question.

Prioritize employee training

Every individual who represents the company in any official capacity is responsible for compliance. This means that all employees—including company officers and third-party vendors—must be thoroughly trained in laws, codes, policies, and standards. Ideally, training should be tailored to specific roles (particularly for areas of high risk) and should be fully documented and tracked. Compliance policy and training management tools can streamline this process, ensuring comprehensive, consistent training across the business.

Always look for opportunities to improve compliance

A corporate compliance program should not be static; it is a dynamic process that requires ongoing evaluation and improvement. Regular feedback from employees, continuous monitoring of compliance effectiveness, and staying well informed about state and federal regulations will help organizations maintain adherence in the face of changing expectations. This continuous approach to improved compliance ensures the program remains effective over time, adapting to match the evolving business and regulatory landscape.

ServiceNow for corporate compliance

Today’s businesses represent great power, and when properly committed to compliance with established internal policies and guidelines, they can be a power for positive change. ServiceNow, recognized as a leader in the Forrester Wave for governance, risk, and compliance (GRC) Platforms Q4 2023 supports organizations as they prioritize corporate compliance.

ServiceNow Integrated Risk Management (IRM) is built on the award-winning Now Platform®, which offers a comprehensive approach to corporate compliance. Use powerful built-in tools to streamline entire processes by easily importing regulations and managing internal policies. Access real-time data using dynamic dashboards to create a fully detailed view of compliance across the organization. Employ advanced automations and workflows to manage policy life cycles while constantly monitoring for evidence of violations. And through it all, enjoy the support and guidance that comes from working with an established leader in GRC.

The integration of advanced compliance management systems into business operations signifies a forward-thinking approach to corporate compliance. Demo ServiceNow today, and make compliance a strategic differentiator in your business.

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