Defining ‘what is compliance in business‘ is a task that requires, initially, to recall some concepts, such as Risk and Corporate Governance, as well as their relationship with Business Process Management.
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What is compliance in business?
As we said, before we delve into the answer to ‘what is compliance in business’, let’s go back a bit and describe the definition of 3 very important elements for this practice to take place properly:
- Business Risk Management
- Corporate Governance
- Business Process Management
1- What is Risk Management
Everything risk related that can threaten a business is part of Corporate Risk Management, usually focused on 4 principles:
- The identification of risks
- Risk assessment
- The mitigation of risks
- Risk monitoring
So, when a company that possesses valuable data, theirs or their clients’, which is under their responsibility, and resolves to migrate their server storage to cloud storage, for example, they should do a cloud computing security risk assessment, in that specific case.
There are 4 complex activities you can read more about here: What is the definition of risk management?
2- What is Corporate Governance
Managing a company transparently, ethically and responsibly, following all the regulatory norms, obligations dictated by inspection agencies or class entities, always within the law, while continuing to focus on corporate strategic objectives, and aiming for the profitability and sustainability of the business.
3- What is Business Process Management
Optimizing an organization’s processes, by seeking efficiency and effectiveness so that they deliver maximum value to the final customer; maintaining an alignment with defined strategic objectives; always identifying bottlenecks, delays and wastages; and continually improving processes in order to achieve the expected results.
With these 3 definitions in mind, it’ll now be easier to answer the question of ‘what is compliance in business?’
The 3 perspectives of Corporate Compliance
If we integrate the above 3 definitions into one sentence, we could say that:
Compliance is the satisfaction of all requirements related to risk management in a business, complying with rules and regulations so that management is not compromised and the long-term sustainability of the organization is guaranteed, transparently and ethically, ensuring the interests of the community, employees, shareholders, society and other stakeholders are met.
Therefore, through compliance, companies, contrary to what many may think, achieve competitive advantages, not impediments to their growth, see:
- You can model processes to monitor them with more ease
- Risk analysis becomes more thorough and comprehensive
- You can identify certifications, such as ISO and others as a way to certify compliance, which always improves processes
- Investors feel more confident analyzing the company, attracting capital
- More and more factors such as ethics and respect for the environment have attracted public preference
- Employees benefit from many compliance practices, which attract and retain talent and increase motivation.
- Communication flows more quickly and data and information are more reliable
Finally, companies that already use BPM to properly manage and document business processes, monitor and mitigate risks, and have Corporate Governance among their values and habits, already have the practice of compliance instilled in their organization.
Therefore, compliance is nothing more than the consolidation of an ethical and responsible corporate management culture.