What’s the Difference Between Regulatory and Corporate Compliance?
While some people may think compliance is one big thing, it’s actually composed of different types, all of which are crucial. Two of the most major kinds of compliance are regulatory and corporate compliance. But how do these two differ from one another?
This article will show you what corporate and regulatory compliance are and what makes them different.
What is Regulatory Compliance?
Regulatory compliance refers to a company following state, federal, and international laws about its industry and operations. It’s part of the compliance structure.
Depending on the company’s industry, the nature of regulatory compliance varies. For example, industries like finance and healthcare are subject to more rigorous legislation, while others would only have a handful of governing bodies to comply with.
The goal for regulatory compliance is to improve consumer confidence when interacting with companies or purchasing products. Consumers want to feel and know that the company they choose to transact with follows the law and practices business ethics. Regulatory compliance helps achieve that.
What is Corporate Compliance?
Corporate compliance would cover internal policies and procedures. It would also follow federal and state laws. The broad definition refers to the ability to lead employees towards accomplishing specific standards of conduct. Think of it as internal compliance, while regulatory is external.
The purpose of corporate compliance programs is to protect the company. An effective program can help companies prevent abuse, discrimination, fraud, waste, among other practices disrupting business operations while potentially putting the company at risk.
Basically, employees need to comply with internal policies and procedures, tackling corruption, reporting, data protection, employment, and the like. To manage corporate compliance, a company must first adopt appropriate policies and procedures and then manage compliance training programs to share with employees.
Regulatory vs. Corporate Compliance
Regulatory and corporate compliance training courses seem similar and interchangeable. However, they have one key difference separating them: how it’s required by law.
Regulatory compliance involves following legal legislation and mandates as ordered by governing bodies. On the other hand, corporate compliance focuses on how a company ensures they follow internal compliance structures. Furthermore, regulatory compliance would represent a different level of obligation, which is mandatory and would come with considerable potential penalties if left unfollowed.
Corporate compliance would vary from company to company as the regulations are set for the company and by the company itself. Usually, companies would incorporate regulatory compliance requirements into their existing strategy, streamlining the process. However, that isn’t required. Both types of compliance can be conducted face-to-face or through online platforms like True Office Learning.
If both regulatory and corporate compliance are left ignored, it can lead to dire consequences, such as hefty fines, poor business reputation, and even closure of your company.
That’s the reason why all companies prioritize providing compliance training for all employees from different levels and departments.
Wrapping It Up
Both regulatory compliance and corporate compliance are crucial, so make sure you implement both in your business strategies.