According to new research by Workiva, executives around the world anticipate regulation will expand. More than half of U.S. executives foresee new or expanded regulations in the next year, as do 60% in the UK, 78% in Brazil, and 80% in Singapore.

In today’s increasingly regulated business environment, building and managing an effective corporate compliance program is essential for organizations to build trust, avoid penalties, and achieve sustainable growth.

This blog will explore what corporate compliance means, why it’s important, and how businesses can implement and manage a program effectively using software.

What is corporate compliance?

Corporate compliance refers to an organization’s adherence to laws, regulations, industry standards, and ethical practices that govern its operations. This includes industry-specific regulations, government mandates, and internal policies designed to protect stakeholders and ensure the ethical behavior of employees and third-parties.

Corporate compliance is broad in scope, encompassing regulatory compliance, security compliance, ESG compliance, and more — and will continue to increase in scope as government authorities around the world raise expectations around the comprehensiveness of corporate compliance programs. Companies are expected to have robust policies, procedures, and controls not only for one area like anti-corruption but for many areas, including anti-money laundering, trade, labor, antitrust, data privacy, and environmental compliance.

What is corporate compliance in healthcare?

In the healthcare sector, corporate compliance focuses on complying with state and federal regulations such as HIPAA, HITRUST, the Anti-Kickback Statute, Stark Law, and False Claims Act in order to uphold high standards for patient safety, data privacy, and quality of care.

With healthcare organizations constantly under scrutiny, having a robust compliance program in place can help reduce liability risks and enhance patient trust.

Let’s take a closer look at the purpose of corporate compliance across industries.

What is the purpose of corporate compliance?

The primary purpose of corporate compliance is to ensure that a company operates within the boundaries of the law while upholding its values and ethical standards. 

Key objectives include:

• Preventing fraud, waste, abuse, and discrimination
• Minimizing the risk of regulatory penalties
• Encouraging transparency and ethical behavior
• Fostering accountability among management, employees, and third parties
• Ensuring business continuity
• Protecting the organization’s reputation and financial health

In addition to these benefits, an effective corporate compliance program can help businesses avoid misconduct and any associated fines, penalties, lawsuits, and/or investigations by the U.S. Department of Justice (DOJ).

DOJ evaluation of corporate compliance programs

The DOJ evaluates corporate compliance programs to determine their adequacy and effectiveness when an organization is facing a criminal enforcement action. 

The DOJ has published guidance on factors that prosecutors should consider when conducting this evaluation. This document, Evaluation of Corporate Compliance Programs (ECCP), was recently updated in September 2024. While the primary target audience of the ECCP is prosecutors, companies can also use it to assess the effectiveness of their corporate compliance programs.

The evaluation centers on three fundamental questions:

• Is the program well-designed?
• Is it applied earnestly and in good faith?  In other words, is the program adequately resourced and empowered to function effectively? 
• Does it work in practice?

If prosecutors find that the corporate compliance program was effective at the time of the offense as well as at the time of a charging decision or resolution, then the company is more likely to receive a favorable resolution in an enforcement action. This typically includes reduced fines and compliance obligations. 

This guidance as well as the ramifications of a poor assessment leading to unfavorable resolution terms (i.e. high monetary penalties and burdensome ongoing compliance obligations) underscores the importance of creating a compliance program that is proactive, comprehensive, and continuously improved. In the next section, we’ll walk through this process step-by-step.

Corporate compliance management in 8 steps

Building and managing an effective corporate compliance program involves implementing a range of measures and practices designed to mitigate risks, maintain legal and ethical standards, and foster a culture of accountability. Below, we define key steps based on the ECCP and provide actionable examples of how to execute them effectively.

1. Conduct periodic risk assessments

A risk assessment identifies potential areas where an organization could face legal, regulatory, or ethical risks. 

It is important to conduct these periodically to ensure your company has analyzed and addressed varying risks presented by factors such as:

• Industry sector
• The location of your operations
• The competitiveness of the market
• The regulatory landscape
• Potential clients and business partners
• Transactions with or payments to foreign governments and officials
• Use of third parties
• Gifts, travel, and entertainment expenses
• Charitable and political donations
• Technology, especially new and emerging technology like AI

Your corporate compliance program should be tailored based on the results of these risk assessments. That will ensure it is designed to detect and prevent the particular risks that are most likely to occur in your organization’s line of business and regulatory environment. 

What to do:

• Map out risks in areas like data privacy, financial reporting, and workplace safety.
• Evaluate both internal risks (e.g., employee fraud) and external risks (e.g., vendor compliance issues).
• Rank risks based on likelihood and severity.

Example: Use a risk assessment matrix to categorize risks as low, medium, or high, engaging department heads to provide insights into specific challenges they face.

2. Develop and implement policies and procedures

Policies and procedures serve as the framework for ensuring employees understand and comply with regulatory and ethical standards.These should clearly establish your company’s commitment to compliance and help incorporate a culture of compliance into day-to-day operations. 

What to do:

• Write clear policies addressing risks identified during the assessment, such as anti-corruption, data security, or workplace harassment policies.
• Provide detailed procedures explaining how employees should apply these policies in their roles.
• Clearly communicate policies and procedures to all employees and relevant third-parties.
• Regularly update policies to reflect regulatory changes as well as any lessons learned from the company’s own or similar companies’ issues.

Example: Create a Code of Conduct and/or Acceptable Use policy that includes guidelines for ethical behavior, conflict of interest disclosures, and data protection practices. Distribute it to all employees and relevant third parties and require acknowledgment.

3. Provide training and communication

Training ensures employees and management understand the policies and procedures as well as their roles in maintaining compliance, while communication reinforces the importance of ethical behavior.

What to do:

• Develop tailored training programs for different roles (e.g., IT teams on cybersecurity, HR teams on anti-discrimination laws).
• Tailor training methods and materials based on the audience’s subject matter expertise, needs, interests, and values. Examples of different training methods are case studies, role-playing, and gamified learning.
• Establish regular updates to training materials.
• Provide guidance and resources related to compliance policies outside of training. 
• Send clear communications from senior management about the company’s position concerning misconduct, including when an employee is terminated or disciplined for failure to comply. 

Example: Host quarterly compliance workshops featuring real-world scenarios, such as handling confidential information or identifying potential bribery risks.

4. Establish a confidential reporting structure and investigation process

A reporting system allows employees to raise allegations of a breach of the company’s code of conduct, company policies, or suspected or actual misconduct anonymously or confidentially, while an investigation process ensures concerns are addressed fairly and efficiently.

What to do:

• Create anonymous reporting channels, such as hotlines, email addresses, or web forms.
• Periodically test the effectiveness of these channels.
• Protect employees who report misconduct from retaliation through clear policies.
• Designate qualified personnel to handle complaints and ensure timely resolutions.
• Establish a process for collecting, tracking, analyzing, and using the information from reports and investigations.

Example: Implement a third-party hotline service to manage reports, ensuring anonymity, and regularly test the system to confirm accessibility and effectiveness.

5. Implement third-party risk management

Third-party risk management involves evaluating and managing risks associated with external partners, vendors, and contractors.

What to do:

• Establish business rationale for use of any third parties. 
• Conduct due diligence to assess third parties’ compliance with legal and ethical standards.
• Include compliance clauses in contracts to hold third parties accountable at all stages of their relationship, beginning with procurement. 
• Establish a process for tracking and addressing red flags so you can terminate, avoid re-hiring, or take other appropriate action against a third party that does not pass your due diligence or is involved in misconduct. 
• Extend due diligence to mergers and acquisitions to uncover potential compliance risks.

Example: Use automated tools to evaluate vendor risk profiles based on their compliance certifications, past violations, and business practices and monitor them on an ongoing basis.

6. Monitor, audit, and continuously improve the program

Monitoring and auditing help organizations evaluate the effectiveness of their compliance program and identify areas for improvement in a continuous manner.

What to do:

• Set key performance indicators (KPIs) to measure compliance program success (e.g., training completion rates, number of reported incidents).
• Conduct regular audits to ensure policies are being followed.
• Update policies and procedures based on audit results, gap analyses, and lessons learned from your own or similar companies’ misconduct. 

Example: Schedule annual compliance audits and quarterly policy reviews to ensure alignment with changing regulations.

7. Implement a remediation process

A remediation process involves addressing incidents of noncompliance and taking corrective action to prevent recurrence of similar incidents. This is key to ensuring a compliance program works effectively in practice. 

What to do:

• Conduct a root cause analysis to determine why misconduct occurred.
• Implement corrective measures, such as additional training or changes to policies.
• Document disciplinary action and remediation efforts for transparency and accountability.

Example: After identifying weaknesses in data access protocols, implement multi-factor authentication, train employees on updated security practices, and document these changes.

8. Enforce compliance

If a compliance program is well-designed, that does not necessarily mean it will be effective. It must be implemented and enforced with adequate resources and commitment from senior and middle management. An organization must also take corrective actions for noncompliance and reinforce accountability in order to be considered effective. This helps ensure all employees and management follow established policies and that violations are handled consistently.

What to do:

• Provide sufficient resources, including personnel and technology, to support compliance efforts.
• Apply disciplinary actions for violations uniformly across all levels of the organization.
• Recognize and reward employees who demonstrate a strong commitment to compliance.

Example: Establish a compliance oversight committee to review major incidents and recommend actions, such as termination for serious violations or public recognition for exemplary compliance efforts.

Why choose Secureframe to simplify corporate compliance management

Corporate compliance is not just about following rules—it’s about creating a culture of integrity and accountability. By implementing effective compliance management practices and leveraging compliance automation tools like Secureframe, organizations can achieve both compliance and business success.

Secureframe offers an all-in-one solution to help businesses manage corporate compliance effortlessly. From policy management to risk assessments to continuous monitoring, Secureframe simplifies the compliance journey for organizations of all sizes.

This was confirmed by a UserEvidence survey of Secureframe users across the information technology, consumer discretionary, industrials, financial, and healthcare industries. Customers reported a range of benefits, including:

• 95% of saved time and resources obtaining and maintaining compliance
• 92% reduced time spent on compliance tasks 
• 75% reduced the risk of fines for non-compliance 

Request a demo of Secureframe to see how you can reduce the cost and complexity of implementing and managing a corporate compliance program.

About the UserEvidence Survey

The data about Secureframe users was obtained through an online survey conducted by UserEvidence in December 2024. The survey included responses from 154 Secureframe users across the information technology, consumer discretionary, industrials, financial, telecommunications, consumer staples, and healthcare industries.