Why Is Corporate Compliance Important For Businesses? Corporate and Company Law India

This means our political leaders, civil servants and company CEOs have to set a trend of good examples for others to emulate. Of fair wages, social concern, customer care and corporate citizenship, professional pride is yet to get appreciated by the business houses. The recent and newer companies are in a better shape on these factors. So, they should remain loyal to their company and their colleagues. When they accept the other employees, they need to provide a reasonable time to the firm and respect the proprietary information attach to the previous firm. Thus, they should refuse to take part in any activity that might take the undue advantage of the firm.

compliance refers to obeying and adhering to

By using Motivating & Positive words, we can inspire others. As it is proven Scientifically (Newton’s Law) & Spiritually , “For every action, there is an equal & Opposite Reaction.” So, Stop Hatred & Start Spreading love. Insider trading, securities fraud leading to manipulation of the financial markets. Ensure optimum utilization of resources to remove poverty and to increase the standard of living of people.

This query is an try to assess whether or not you might be comfy coping with senior level staff. As a compliance officer, you should convince corporate boards and senior executives, together with the CEO, that an efficient compliance refers to obeying and adhering to compliance program is a precedence. Certain other sections of people in management believe that business ethics and social responsibility are the same. In fact corporate social responsibility is only a small part of it.

What are the Ethics of Business in Finance?

Determining nonprofit partnerships that are in accordance with its ethical code. Altering its branding to communicate its ethics to consumers more effectively. Companies tend to shift economic risks onto the shoulders of their employees. The boom of performance related pay systems and also flexible employment contracts are indicators of these newly established forms of shifting risk. Avoid all types of injustice and partiality to employees.

compliance refers to obeying and adhering to

The tendency to make more profits by less effort is deep rooted in Indian socio-cultural values. Yet another myth that surrounds business ethics is that business ethics cannot be managed which is totally wrong. In reality business ethics is managed or exercised indirectly in some way. Organizations priorities can also be reflective of the ethics followed in the organizations. For example a sales driven organization is bound to be aggressive naturally, whereas one that is into the business of hospitality is bound to be different. Many management thinkers and philosophers believe that business ethics alters people’s values.

Principles of Business Ethics

Legal compliance generally refers to behaviours and practices that are conducted in accordance with supra- national and/or national and/or state and/or local laws of the country or countries in which the business operates. Substantial duplication of tasks evolves when governance, risk management and compliance are managed independently. Overlapping and duplicated GRC activities negatively impression each operational costs and GRC matrices.

By participating in a regular basis, in common projects on behalf of general welfare, a corporation demonstrates that it can take seriously its corporate citizenship. Has changed over time and the different areas of ethics are important to every business. Developing new employee-training techniques that emphasize the company’s ethics and teach new hires how to act in accordance with them.

  • An example to internal compliance is when the accounts departments follows the company’s policy and reconcilies cash and bank accounts at the end of every month and reports to the internal auditor.
  • The income received by a job worker will usually be liable to different taxes.
  • The compliance officer and company’s board of directors are mainly responsible for implementing and maintaining company’s corporate compliance program.
  • In the business sense, ethics describe what constitutes good or bad in human conduct in organizational context.
  • Therefore, adhering to corporate compliances will naturally drive towards business growth.

Compliance officers within the compliance division have an obligation to their employer to work with administration and employees to establish and manage regulatory risk. The compliance officer or supervisor positions are available in a myriad of industries, but job duties and duties of individuals who hold a compliance officer place are comparable. Compliance officers usually work with a firm’s administration to make sure regulations are being adopted. The job generally includes stress when failing to keep up certain requirements may end up in authorities fines or different forms of financial loss. Additionally, staff may typically view compliance officers negatively, as someone trying over their shoulders, policing their work.

For these principles, they will not back down and be hypocritical or experience. Many managerial decisions have ethical implications and these decisions give rise to Managerial Dilemmas. Not operate ethically, investors are less inclined to buy stock or otherwise support its operations. A doctor personally feeling that a homeopathy is a poor choice for treating a patient’s condition but having to respect the patient’s bodily autonomy to choose homeopathy over the doctor’s suggested treatment. Writing is my Niche with which I like to share my thoughts and values. I believe words are the most powerful tool which can even Start/Stop a War.

Retention of employees

ClearTax serves 2.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India. The major obligation of any compliance officer is to make sure a company is being run legally and ethically, complying with all applicable industry regulations. Compliance officers present an in-house service that effectively supports business areas in their responsibility to adjust to relevant laws and rules and inside procedures. Ethical relations between the company and the environment include pollution, environmental ethics, and carbon emissions trading.

Discrimination based on gender, race, religion, language, nationality, etc. should be avoided. The shareholders and investors must know about the financial and other important decisions of the company. Fair wages or salaries, facilities and incentives must be provided to the employees. Accuracy in weighing, packaging and quality of supplying goods to the consumers has to be followed. The Ethics of business follows the following principle. The boom of performance-related pay systems and flexible employment contracts are indicators of these newly established forms of shifting risk.

While laws related to business ethics to exist, it is up to each business to establish a code of ethics within the company. An organization must continuously monitor its compliance program on a constant basis and identify and undertake corrective measures in order to mitigate the risk of legal implications. It is important to conduct audit of compliance program at regular intervals and adopt internal auditing protocols that are sufficient to fully assess the sufficiency of the organization compliance efforts. The most systematic approach to fostering ethical behaviour is to build corporate cultures that link ethical standards and business practices. It should provide quality goods and services at reasonable prices to their consumers. It must also avoid adulteration, misleading advertisements, and other unfair malpractices.

Export ProcedureExport is one of the major components of international trade. Exports facilitate international trade and stimulate domestic economic activity by creating employment, production, and revenues. Businesses export goods and services where they have a competitive advantage. E-governance in IndiaThe rapid digitalization has led to many governments across the globe to introduce and incorporate technology into governmental processes.

compliance refers to obeying and adhering to

This area of business ethics deals with the duties of a company to ensure that products and production processes do not cause harm. Ethics of ProductionThis area of business ethics deals with the duties of a company to ensure that products and production processes do not cause harm. Ethics is a subject of social science that is related with moral principles and social values. https://1investing.in/ The information regarding business- or business-particular risks is handed along to excessive-level executives to ascertain inside controls to attenuate exposure. A compliance officer must frequently review the risks that face the group along with the procedures that are in place to scale back that threat so that the company is nicely-positioned to handle it successfully.


The strike went on for six months, but the employee was not reinstated. Azim Premji said that he would rather close the office than reinstate the trade union leader. The employees called off the strike, after a period of six months. Basically all these companies are professionally managed and hence individualism or selfish attitude is very negligible. Some of the companies like Infosys, Wipro and Public Sectors are setting good example to others in ethical values, employee welfare, growth and social concern.


Business ethics saw a notable shift in the 1960s when more companies started embracing social responsibility. Variance Analysis – Overview, Budgeting, BenefitsMost of the companies are concerned with business planning and meeting their financial commitments. Analysis of Variances from the budget is one of the ways to keep a check on the performance of the company. Management Accounting – Meaning, Advantages & FunctionsManagement accounting is presentation of analysis of business activities to the internal management to facilitate decision making.

The ethics of human resource management covers those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee. In broad sense ethics in business is simply the application moral or ethical norms to business. The term ethics has its origin from the Greek word “ethos”, which means character or custom – the distinguishing character, sentiment, moral nature, or guiding beliefs of a person, group, or institution.

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