Category: 

What Is a Compliance Program?

Article Details
  • Written By: Alex Newth
  • Edited By: Angela B.
  • Last Modified Date: 15 December 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
  • Print this Article
Free Widgets for your Site/Blog
On average, people spend a year of their lives looking for items they've misplaced.  more...

December 18 ,  1620 :  The Mayflower landed in Plymouth.  more...

A compliance program is a program with a set of rules created by a company to outline ways for the company to legally operate under government standards and regulations. Most countries and regions lack a single agency that creates these standards for all companies, opting instead to have one or several agencies that govern a company’s particular niche. To make it easier for the company to stay within legal limits, a compliance team is usually used to read through new standards and make or update the compliance program. Failure to make or adhere to this program can lead to penalties, if not a complete shutdown of the business by the government.

Nearly every company, regardless of what it produces or does, has standards and laws that must be adhered to if the company wants to legally operate. For example, printing industries must limit the amount of volatile organic chemicals (VOCs) they use, food industries must adhere to sanitation guidelines, and manufacturers must adhere to human rights standards. To help comply with these rules, a compliance program outlines what employees and managers should do to keep the company from risking being out of compliance. While the government makes the rules and regulations, it typically is up to the company to make its own compliance policy.

Ad

A majority of countries and regions have many different agencies that create standards. Most companies only have to pay attention to one or two agencies, specifically those that control the company’s niche. For example, an American company that processes food must pay attention to Food and Drug Administration (FDA) regulations. There also may be general business agencies that preside over all or many companies.

Business owners are free to look up government rules and regulations, but this is typically a full-time job, so owners commonly hire a compliance team. This team is usually composed of people that understand the legal language and know what agencies to check for new regulations. If a new regulation is made, or if an existing regulation is changed, then this team modifies the compliance program so the company is still following the rules.

If a company fails to make or adhere to a compliance program, then this can cause major problems. The best-case scenario is usually light fines and perhaps a warning. Failing to satisfy harsher regulations can lead to the company being forcibly shut down by the government, either permanently or until the company is able to satisfy the regulations.

Ad

More from Wisegeek

You might also Like

Discuss this Article

Post your comments

Post Anonymously

Login

username
password
forgot password?

Register

username
password
confirm
email