Compliance – part I – introduction

We are pleased to provide you with the following article on the compliance system. You are highly recommended to read the text below.  Our team has prepared for you a number of articles covering detailed issues related to the compliance system, which will soon appear on our website. You will be able to learn more about issues such as what a compliance system is and who it applies to, what benefits can be gained from implementing a compliance system in your company, what the various stages of implementation look like (i.e. conducting an audit, preparing procedures, conducting training, etc.) and what the institution of a compliance officer is all about.


What is compliance?

Compliance literally means “conformity”. It is an extremely broad concept, as it touches many areas of an organisation and affects a number of its processes. Compliance system includes compliance with the law, sets of rules, including ethical ones, internal regulations, as well as a whole range of activities and standards integrated with each other, which the organisation is obliged to follow.

Compliance therefore means organising a company in such a way that it is run in accordance with the provisions and rules indicated above, and all the activities that are intended to help this to happen form a compliance management system.

The implementation of a compliance system in an organisation provides tremendous support for its day-to-day operation, but above all reduces the risks involved, particularly the risk of liability for irregularities within the organisation. Every year there are more and more regulations that companies have to comply with under the threat of severe sanctions, most often financial ones. Therefore, the risk of non-compliance of the conducted activities with applicable laws and regulations is constantly increasing.

Operating in a dynamically changing business environment, a modern entrepreneur must in advance minimise the risks that may arise when making most decisions related to the conducted activity. He or she must also be aware of the importance of properly responding to changes in the law, training management and personnel, developing and implementing the required policies, or even choosing the right course of action in the event of government intervention.

The introduction of a compliance system in a company is primarily aimed at preventing various types of violations and irregularities, and in the event that such failures occur, the system should enable them to be detected quickly and liability to be established. In addition, the system is also designed to protect the organisation against penalties, financial losses or loss of reputation in the event of problems resulting from, among other, violations of the law.

Irregularity is understood to include both unlawful behaviour or omission, but also breaking the rules of ethics, exceeding the accepted standard or norms Such an act may be, for example, corruption, ignoring money laundering, violation of personal data protection, disclosure of confidential information, harassment of an employee, determination of working conditions contrary to the provisions of labour law, violation of health and safety rules, etc.

Compliance system adapted to the profile of the organisation and functioning in a realistic manner allows you:

  • reducing the risk of occurrence and detection of violations and irregularities and limiting the liability of people responsible in organisations (preventive function),
  • bringing about compliance with the law and internal regulations
  • limiting the negative effects of the events that have occurred,
  • improving the processes within the organisation,
  • controlling legal risks as well as business risks.

Effective management of compliance risk in the company requires the implementation of a compliance system. However, for a compliance procedure to be effective, it must be tailored individually to the structure of the business processes and the profile of the entrepreneur, i.e. take into account the specifics of the company’s operation and its legal and business environment, in order to ensure compliance with legal regulations.


Please read our other articles on compliance:

Compliance – part II – compliance system

You might be also interested in...