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Which compliance goals can be achieved with which compliance strategies

With the compliance management system, a company wants to promote compliance with laws and guidelines in the company and avoid misconduct.

Low risk with simultaneous increase in efficiency and effectiveness – these are the major goals of compliance. This can only be achieved through the strategic use of compliance measures.

A compliance management system is thus indispensable for the modern business world. The purpose of the system is liability avoidance and risk limitation/minimisation. A good compliance management system can protect companies from expensive lawsuits, high claims for damages and reputational damage. Reputational damage as well as civil and criminal consequences cause high non-material and financial damages.

Compliance Goals

With a good compliance management system, a company can target the following goals:

  • Efficiency and effectiveness
  • Motivation of the employees
  • Limitation and minimisation of risks (avoidance of criminal proceedings and administrative offences)
  • Opportunities to participate in calls for tender (award of public and private contracts)
  • Improvement of the company rating (creditworthiness, lending and lending conditions)
  • Prevention of corruption in sales (customers and suppliers)
  • Transparency (disclosure, going public)

The competent organisation of rule-abiding behaviour in the company as well as the proof of a compliance organisation are therefore at least advantageous for compliance goals.

At the legal level, antitrust allegations can arise. Compliance protects a company, with the involvement of customers and suppliers, from possible damage caused by antitrust violations. The company’s liability risks shrink, as does the personal liability of the management bodies.

Internationally operating companies can particularly benefit from the economic advantages of compliance management, as they are naturally more exposed to risks. On the one hand, compliance has an effect on the company rating, on the other hand, the chances of obtaining international financing increase – as do the chances of success in participating in tenders and joint ventures. Both financially and legally, a company can score points with a compliance strategy.

Compliance Strategy

To develop an optimal strategy, it is necessary to narrow down four areas:

Functional Dimension

In the case of business activities, one speaks of functional scope.

Material Dimension

The areas of law target the material scope of application.

Personal Dimension

When it comes to the group of persons, one speaks of the personnel scope of application.

Territorial Dimension

The regions and sectors that should be addressed are set out in the territorial scope.

Single Standard

When developing a compliance strategy, it is important to consider whether the same rules should apply to all territorial areas in a globally operating company or whether they should differ from region to region. For example, in the case of parent companies and subsidiaries, this can lead to a balancing act between marketing and legal design. In this case, it makes sense to weigh up the priorities carefully.

The same basic rules for all regions are called “single standard” in the technical language.

Reputational damage has an enormous repercussive effect on a company. Legally interesting, therefore, is the structuring of the supervisory duties of parent companies towards subsidiaries in liability matters such as cartel violations. We help you with the drafting of contracts.

Which compliance goals can be achieved with which compliance strategies

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