Why is Regulatory Compliance Important?

What is corporate compliance and why is regulatory compliance important? Corporate compliance refers to an organization obeying all regulations and legal laws in regard to how they manage the organization, the employees and how they relate with consumers. The main aim of corporate compliance is to ensure that companies act responsibly. Some simple acts of corporate compliance include things such as obtaining a business license, paying taxes on time as required by the law, and many others. Corporate compliance is very important and failure to adhere those rules can result to serious penalties. Below are key points to keep in mind for any type of business when it comes to compliance: 

Important Areas of Compliance

  • Affordable Care Act (ACA) –  companies that have more than 50 workers must ensure that employees have access to the Affordable Care Act.
  • According to the Equal Employment Opportunity Commission (EEOC), it is illegal for employers to treat workers differently based on their religion, race, age, sexual orientation or gender.
  • Sexual harassment training -Sexual harassment within organizations have become more rampant. Employers are required to show their workers how to conduct themselves at work and show them what constitutes proper behavior.
  • Fiduciary rule – An organization must adhere to the fiduciary rule if workers are working in a financial industry.

The Importance of Corporate Compliance

  1. It Helps the Organization Avoid Criminal Charges 

This is perhaps the most crucial aspect of corporate compliance. There is no organization that wants to face criminal charges due to not adhering to compliance laws and regulations that have been put into place. These laws include regulations on how a business manages its staff, rules of negotiating with customers, and many others. If the business chooses to not comply with such regulations, penalties and charges will be at stake.

  1. It Improves a Business’ Reputation

Building and maintaining a good reputation is crucial for organizations. Not only is your business reputable, but it may also open up more business opportunities. They can take advantage of their reputation when hiring for new employees, marketing their products and services, improving their brand image, etc. Being compliant will give any business a competitive advantage. 

  1. It Helps to Improve Productivity

Corporate compliance helps improve productivity in a firm. Organizations that have complied with laws and regulations usually attract top employees who help to increase productivity.

On the other hand, following safety and security rules help prevent the chances of accidents. These may include: workers injuries, building evacuations, and fires that can affect business productivity. Employees prefer to work in organizations that they feel that their interest are well taken care of. Therefore, it is very important to ensure that businesses adhere to corporate compliance rules and regulations to avoid inhibiting productivity.


So, why is regulatory compliance important? Various studies have shown that organizations with strong compliance usually perform better than those that have not adhered to such regulations. Not only will it ensure that your business is compliant with official rules and regulations, but it can improve other aspects of your business as well. 

By | 2019-02-26T18:04:14+00:00 October 9th, 2018|Business Regulations|Comments Off on Why is Regulatory Compliance Important?

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