Compliance: The New Corporate Trend

Previously, and until very recently, reference was made to the compliance only when we were talking about large companies and highly regulated industries. Today, however, the concept of the compliance It is being adopted across all productive sectors and by companies of all types, not just those that are large and have significant market power. 

This continues a trend that has become a genuine necessity within companies, one that seeks to foster a stronger “corporate culture.” As such, this process ensures that corporate conduct adheres, above all else, to high ethical, lawful, and transparent standards.

What is meant by compliance?

Now then, what is meant by compliance? The compliance It literally means "compliance." In the field of corporate law, the compliance refers to a company’s compliance with applicable regulations. This essentially involves adhering to current laws so that the company can conduct its business properly, without its operations being affected by violations, fines, or legal noncompliance.

This compliance stems not only from the regulations applicable to the company, but also from the creation of internal and voluntary policies and procedures within each company known as “programs of compliance”, which are developed with the goal of self-regulation and promoting a “culture of compliance” among all members of the organization.

These compliance policies or programs are designed to prevent risks that may arise within the company’s line of business. In particular, they are intended to prevent financial and reputational damage, which—given the economic environment in which our society operates and the speed at which information spreads—could lead to institutional collapse, with a direct and negative impact on relationships with customers or investors.

Why is it necessary to implement a compliance program?

The answer is simple. These programs are designed to identify and prevent unlawful conduct within the company, promote ethical and moral values, ensure compliance with applicable regulations, and even enhance the security of operations. This last point is of utmost importance to investors and customers when doing business with a company, especially from a risk mitigation perspective.

Although each program of compliance It is unique, since each one must be designed internally and tailored to each company, taking into account various factors such as the type of business, applicable law, and the risks inherent to the industry; however, there are certain common parameters that must necessarily be considered. These include: a code of conduct and an anonymous reporting channel, among others.

Which agency is responsible for verifying and enforcing these regulations? 

The figure of the compliance officer A compliance officer is essential, as their primary role is to ensure compliance with applicable regulations, as well as with the obligations established and voluntarily assumed by the company internally. Similarly, the compliance officer is responsible for proactively safeguarding the company from criminal liability arising from acts that may be committed by its members (directors, employees, etc.) as a result of a failure to exercise adequate oversight over their actions.

Currently, the need for a compliance department or compliance Within a company, compliance is essential and virtually indisputable; while it does not guarantee the complete and total elimination of the risks the company may face, risk reduction is significantly enhanced when these programs are implemented correctly. Furthermore, the reality in the corporate world is that there are an increasing number of segments or areas within a business structure, and as a result, it is necessary to have compliance officers who specialize in the different areas of the business.

Finally, the compliance It is a tool of great importance that makes a decisive contribution to business growth by demonstrating and conveying a positive corporate image, in which values, ethics, morality, and honesty play a central role. For this reason, we can clearly state that the role of the compliance It's a trend that's here to stay.