Essentials of Enterprise Compliance

Chapter 1. Compliance: Law and Society

After reading this chapter, you will be able to:

• Understand the basic structure of an enterprise governance framework.

• Deepen your understanding of the relationship between governance and compliance.

• Develop a conceptual foundation for evaluating your enterprise's current governance and compliance program.

• Understand the structure of a holistic governance and compliance framework.

• Appreciate the reasons for unified enterprise framework.

• Review the balance between governance and compliance in public and commercial enterprises.

Defining the Scope

Governance policy and compliance rules can no longer be passive guidance for CEOs, managers, supervisors, and employees. Members of corporate boards must take an increasingly active role in fulfilling their fiduciary responsibilities of oversight with proactive governance structures and compliance frameworks.

As Mike McDuffie pointed out earlier, a board of directors is no longer window dressing, and, therefore, must be a contributing factor in establishing solid governance across the enterprise. Organizational compliance rules must proactively implement the governance policy as well as ensure adherence to law. Adding to this complex picture is the organizational culture and operational management of the enterprise. Over the course of this chapter we will explore some of these interdependencies and try to peel back the layers, as shown in Exhibit 1.1, enough to clarify the relationship between governance, compliance, ...