What is Compliance and How to Apply in Your Business

What is Compliance and How to Apply in Your Business
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What is Compliance?

Compliance is an English term meaning "comply with the rules". It is applied in the business universe when a company has a specific area that controls the internal processes of the business, ensuring that all activities are aligned with the policy of conduct, ethics and business strategy.

Although the term is associated in the first instance with the financial or legal areas, compliance has a much greater strategic role being associated with quality management systems and also to the corporate governance of the business that are typically strategic areas for companies.

How compliance is applied in practice

Typically, you create an area or department in the companies responsible for compliance. The professionals of this team have as main function to create and to update the processes of internal controls of the company. Therefore, they are usually involved in some stage of approval of key business processes and are also involved in periodic audits. Usually, you will find the compliance team most involved in processes such as:

  1. Shopping
  2. High volume / risk sales
  3. Recruitment / dismissal of employee
  4. Development of partnerships
  5. Business Buy / Sell and Business Movements
  6. Knowledge Management and document / access control
  7. Workplace safety
  8. Provision of accounting accounts

When is a good time to structure the compliance area?

Of course, a compliance area is only right to exist in companies that have many internal processes with a variety of professionals running them and that create a significant risk to business objectives.

Having said that, you will hardly have reason to create an area for this purpose in small businesses, except for exceptions from segments that deal with very delicate activities such as a small medical equipment factory.

Typically, these types of businesses already have legal obligations to have structured and controlled quality processes. For all other cases, such as service companies, you will want to form this type of structure when the company is already average and growing.

What is the best way to start your compliance

A new area of ​​compliance will succeed the more it is envisioned by the rest of the company as a tool that makes your job easier. So instead of trying to start greater control for the company as a whole, it is important to choose a very important first business process and be suffering with clutter and clutter to be your first success story. So by being able to help them work better, you will not have to "sell" that idea to the whole company, but you will have the team defending itself and providing how compliance personnel are a hand in the wheel. So let's go step by step:

  1. Choose an important and problematic area to get started
  2. Talk / interview as many staff as possible
  3. Design and present internal processes to be jointly approved
  4. Monitor daily the use of these processes to make corrections, including support tools
  5. Calculate performance indicators of these processes and monitor their improvement
  6. Present the case for the company
  7. Choose the next area and repeat from 1 to 6

How to draw the internal processes

You may have read the previous topic and are not familiar with process mapping. I will not dwell on this much here, as we have another post that goes deeper into the subject, but in general it is a method of recording how things are done in a business.

This means listing step by step, demonstrating moments of flow option decisions. Typically, tools are used that help create a flowchart as a worksheet or Visio as well. However, you can also document a process in a checklist format or a document written in Word or PDF.

Sales Flow Chart Example

Typical problems faced by compliance

Like practically any area that exercises greater control in the activities of other areas, the area of ​​compliance can suffer from the stigma of being taxed like "boring", "bureaucratic" or "without vision". This happens naturally because other areas and professionals of the company are trying in every way to reach their goals and depend on the approval of the area of ​​"rules" to follow with new ideas that bring both benefits and open new risks to the business. To mitigate this conflict, there are some suggestions:

  1. Creation and approval of processes in the most participatory way possible
  2. Agility in approving routine processes
  3. Correctly position process approval to avoid comings and goings
  4. Always keep an open space for periodic review of the rules
  5. Clearly and consistently communicate compliance processes

By following these principles above, you ensure that the area acts more closely to the rest of the company, running away from the dynamics of a repressive police officer who only appears to say "NO".

The Benefits of Creating a Compliance Area

On the other hand, a compliance area is essential, even if it does not have that name specifically, in any big business. Without it, the company is confused about the rules of how to operate and will certainly live in constant chaos without being able to guarantee standard in its actions. The benefits of this area are:

  1. Business Strategic and Operational Alignment
  2. Clear definition of performance rules for all
  3. Decrease in operational risk
  4. Continuous improvement of internal processes
  5. Increased credibility for fundraising
  6. Facility in knowledge management


The Compliance area is an important solution for many companies, especially large ones, but it is not for everyone. In addition, it has implementation challenges that must be taken into account, and if the company tries to implement it ahead of time, it will probably suffer from rejection.

However, when used correctly, it is a source of internal growth for the team and also the quality of business management both from the point of view of external investment and the perpetuity of the business, facilitating the succession of new leaders.

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