The term compliance describes the totality of all reasonable measures that justify the compliant behavior of a company and its employees with regard to all legal requirements and prohibitions. In addition, the compliance of the company's business conduct with all social guidelines and values, with morals and ethics must also be ensured.
In business jargon, the term compliance is used to describe adherence to laws and guidelines, but also voluntary codes in companies. In German, unless the English term is used, one can speak of rule monitoring or simply monitoring.
Compliance/monitoring is considered an important element of proper corporate governance.
The basic requirement for compliance organization in the company is the creation of a separate area of responsibility; this is organized by a compliance manager who, sensibly, bears company-wide responsibility independently of existing hierarchies and is either a member of the Executive Board or reports directly to it.
The economic benefit of compliance for companies and their owners lies in avoiding costs, e.g. through damage, fines, etc., or in avoiding damage to the company's image. Compliance is intended to protect the company from misconduct that is based on ignorance or negligence.
See also:
Corporate mission statement; code of conduct; corporate governance
Reference to QET guidelines:
E01 Business Ethics; E17 Compliance; T01 Guidelines; T02 CI