Compliance management is the process of ensuring that a business adheres to its legal obligations, regulatory and quality controls and internal rules when conducting business activities. Each industry and business practice has its own compliance requirements. In the financial services industry, for example, compliance means meeting regulatory bodies’ requirements so that investors are protected and the market operates in a fair, efficient and transparent manner.
Compliance managment is usually performed by a compliance department that normally has five areas of responsibility: identifies risks that the business faces, advises on how to address them, puts in place processes to address these risks and monitors their implementation and advises the overall management function about how compliance requirements are being met and any proposed changes to enhance them. Compliance officers are tasked with working with management and staff to identify and manage regulatory and other risk factors on a day-to-day basis.