What is compliance in business? Understand what it is and the importance of this concept


what is compliance in business


In recent years, throughout the world we have followed the high level of corruption in various economic sectors. Several companies end up having their image and reputation weakened due to their proven involvement, both at the business level and in the political sphere.

The imperative need to know and practice compliance in day-to-day activities arose in the midst of this reality, which affects companies of all sizes and industries.

The concept of compliance in business aims to generate value for an organization and ensure its survival. This practice arises from the great financial impacts caused by factors such as:

  • Absence of normative guidelines;
  • Misalignments to applicable laws;
  • Lack of adequate preventative tools;
  • Process management failures;
  • Operations without a structured information system.

Read on and learn more about this important concept and what the word compliance means in practice.

What is compliance in business?

The verb comply means to conform to a rule, which explains much of the concept of the word. The meaning of the word compliance is related to the conduct of a company and its compliance with the rules of regulatory bodies.

What is compliance in business, in short? It means to comply with laws and regulations.

This concept covers all the policies, rules, internal and external controls to which an organization must conform. When in compliance, an organization’s activities will be in full accordance with the rules and laws applied to its processes.

Both the company and all its people, including suppliers of interest, need to behave in accordance with the rules of regulatory bodies.

In addition, they must ensure faithful compliance with the various internal normative instruments. Only in this way will the company comply with regulations for environment, labor, finance, work safety, operations, accounting, etc.

How important is compliance in business?

Being able to say that a company is in strategic compliance is by itself a fundamental business strategy. It means that there is transparency and an increasing degree of management maturity. Being in compliance shows that managers and teams are in control of the processes and procedures, implemented and executed with effective political, commercial, labor, contractual and behavioral compliance.

Not being in compliance means being unnecessarily high risk, which can lead to financial, equity and market losses, among many others. Risk management and compliance are closely linked.

It is necessary to reflect and change management styles, adjust the way company information is handled and how people behave on a day-to-day basis, in order to achieve a level of excellence in compliance regardless of the business sector and size of the company.

Get to know some tips for how to align management with the concept of compliance

Now that you know what compliance in business is, check out some tips:

  • Use information systems that support monitoring of the company’s activities and that conform to compliance processes;
  • Have contract management for services and materials that is aligned with the levels of compliance established by the company;
  • Strengthen inspection and inspection routines of activities, including those that do not usually have certifications;
  • Focus on process compliance at the municipal, state, and federal levels;
  • Have an  always active and updated system of standardization in the company;
  • Have internal audit processes focused on the requirements to achieve compliance;
  • Have control systems with adequate depth degrees;
  • Have structured communication about the normative instruments of the company.

Why invest in this activity?

With these actions, the company reduces costs and expenses, increases its operating income and avoids losses. In addition, with the compliance of laws, the transparency of processes becomes a more consolidated reality, which brings greater confidence in the market.

The teams involved become more prepared and increase their performance, which is reflected directly in productivity.

The reputation and the good image are a reflection of the level of compliance that a company proposes to have. Therefore, using this concept to guide the good practices of the organization significantly reduces all risks to the company, creating a healthier and more reliable environment.

Adalberto A. Nascimento Jr.

MBA in Business Management – Partner and Consultant in Business Management.

ASGEM – Advisory in Business Management


After this lesson, is the answer to the question “what is compliance in business?” now clearer to you?

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