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In business ethics contexts, compliance generally refers to a company’s or a business person’s conformity with relevant laws and regulations—that is, following the rules set out by government. In its slightly broader sense, a focus on compliance may also imply a focus on adherence by employees on the organization’s own internal rules.

Many large businesses today have entire compliance departments, typically consisting of a special team of lawyers (and others) whose job it is to make sure that the company remains in conformity with the laws and regulations applying to its activities. Given the very wide range of laws and regulations to which modern businesses are subject, this can be a very substantial task. Big companies regularly engage in compliance training, which both expose employees to the relevant laws and regulations to which the company is subject and the practices and procedures for conforming to them in the performance of their duties.

Compliance and the means by which companies seek to ensure it give rise to interesting issues of corporate culture. One worry is that a corporate culture emphasizing compliance is or may become a legalistic culture—one emphasizing being (barely) on the right side of the law. Legalistic cultures may be corrosive of creating or maintaining a values-based corporate culture—one in which a company’s norms and practices reflect a commitment to ethical values greater than merely avoiding legal liability or punishment. The converse worry is that a corporate culture emphasizing ethical values may find employees engaging in well meaning activity that may inadvertently expose the company to legal liability or punishment for failing to observe the often arcane, technical requirements of the law. Thus, finding and maintaining the right balance of commitment to legal compliance and to ethical values is an ongoing challenge of corporate culture.

See also in CEBE:

Further Reading 


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The Concise Encyclopedia of Business Ethics Copyright © 2023 by Chris MacDonald and Alexei Marcoux is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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