What is the relationship between Corporate Governance and Compliance?

What is the relationship between Corporate Governance and Compliance?

Fundamental concepts to ensure efficient management, Corporate Governance and Compliance are terms that have similar objectives. Often, they can even be confused and understood as synonyms, however, they are complementary to each other and the routine of companies.

“Compliance” is an English term related to the way the organization behaves against the rules, legal or institutional, which is involved.

It is also the area that cares for ethical culture and the relations between employees, managers and stakeholders. In the book “Compliance 360º”, the specialist in Corporate Governance by IBGC, Ana Paula Candeloro, defines compliance as follows:

“[…] a set of rules, standards, ethical and legal procedures that, once defined and implemented, will be the master line that will guide the behavior of the institution in the market in which it operates, as well as the attitudes of its employees”, (Handbook Compliance)

The term gained greater prominence among Brazilian companies, after the creation of law 12,846, known as the Anti-Corruption Law, in 2013. Since then, the legislation has caused companies to be exposed “to serious civil and administrative consequences, if they commit any kind of act harmful to the national or foreign public administration” (Saj Adv).

What about Corporate Governance?

Corporate Governance, as we explained in the past post, is the “system by which companies and other organizations are directed, monitored and encouraged”. It involves several stages of a process and is directly related to achieving results and transparency. It’s the way companies are managed and make decisions.

Therefore, we can say that being compliant, or in Compliance, becomes a chapter or a logic of Corporate Governance.

What are the benefits of joint corporate governance and compliance?

By adhering to these two pillars, companies find internal improvements and more positive results in their market, since both concepts act with a focus on the transparency of processes. Together they:

  • Improve the credibility of the company in the market;
  • Increase transparency and ethics between sectors;
  • Improve the control of activities;
  • Help the company prove its commitment to ethics;
  • Promote quality organizational management;

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