Magazine article Management Today

Brain Food: Mt Masterclass - Compliance

Magazine article Management Today

Brain Food: Mt Masterclass - Compliance

Article excerpt

What is it? The moment comes in most management meetings when someone raises the question of compliance. The word is often met with a sigh of resignation. Narrowly, compliance means not breaking the law, but in practice it means complying with an entire framework of corporate governance and other regulations as the entity goes about its business. This is no small matter: modest estimates put the average cost of compliance for UK businesses at pounds 50 million. Abuse of competition law alone, for example, can leave a firm liable for a fine of up to 10% of turnover.

Where did it come from? When robber barons ruled the business world, there was little corporate law to comply with - think of modern Russia's early experience of capitalism in the 1990s. But as economies mature and societies stabilise, the wealthy and not-so-wealthy alike agitate for regulation and security. In the UK, a series of corporate governance reforms - Cadbury, Greenbury, Hampel, Higgs et al - have dealt with issues in the business community, helping to create a new Combined Code with which businesses now have to comply, or explain why they're not doing so. …

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