What is Compliance Management? From implementation methods to key points for success

Compliance considerations are essential for a company to remain in business for a long time. However, many people may wonder what compliance means in the first place. To prevent noncompliance from occurring in your company, it is important to have a clear understanding of compliance.

In this issue, we will introduce the details of compliance management, including the background of its importance and examples of violations. We will also introduce methods of implementing compliance management and points to consider when implementing compliance management.


What is Compliance Management? Background of Importance


The word "compliance" means "observance of laws and regulations," and compliance management refers to management that observes laws and regulations and practices them while respecting corporate ethics.

For a company to continue to operate, it is important to be trusted by society. However, against the backdrop of a series of corporate scandals, such as window dressing, the term "compliance" has become often heard.

In today's world of corporate scandals, a single scandal can cause significant damage to a company. On the other hand, a company that is able to manage risks against fraud will be trusted by society and its corporate value will increase. In corporate management, it is very important to be aware of compliance.

Benefits of Increased Compliance

There are many positive benefits to a company if it can strengthen its compliance. Here are some specific benefits.

The first advantage is the ability to consider long-term profits. In management without awareness of compliance, it is often the case that only immediate profits are pursued. However, by being aware of compliance, one can make decisions based on sincere values and generate profits from a long-term perspective.

The second benefit is that investors will appreciate the company's reputation. Some investors place importance on "corporate social responsibility (CSR). In the current climate of intense scrutiny of companies, a company that emphasizes compliance management will be evaluated by investors and will have an advantage in fundraising and other situations.

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Examples of non-compliance


There are many examples of noncompliance by companies, three of which are discussed in this article.

Labor Standards Act

Although reforms in work styles are currently being promoted, there are still a few companies that manage their businesses in violation of the Labor Standards Law, most notably by working long hours and failing to pay overtime. This is one of the most common examples of noncompliance.

Leakage of personal information

With the revision of the Personal Information Protection Law, public scrutiny of the handling of personal information has become extremely strict. Even with the best security measures in place, it is not uncommon for personal information to be leaked due to unauthorized access.


There are many types of harassment, including "sexual harassment" and "power harassment. Whether an action or speech constitutes harassment is determined by the perception of the recipient.

Actions and behaviors that were previously considered not to constitute harassment may now constitute harassment.

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How to Implement Compliance Management


There are many ways to implement compliance management, so consider which method is right for you. Here we introduce five methods.

Identify potential risks in business processes

Compliance violations can arise from day-to-day operations. Therefore, we should start by identifying any hidden risks in our daily business processes.

One specific method is to conduct interviews with employees. The key is to confirm whether or not there is any dissatisfaction with the organization, such as whether the working hours are too long, whether the manuals are appropriate, etc.

Conduct compliance training

Conducting compliance training for all employees is an effective way to develop employees' sense of ethics and morals. Share the rules that should be followed within the company and what is considered common sense by the public.

It is also essential to educate employees on knowledge of laws and regulations. Without knowledge of laws and regulations, employees may not realize that they are not in compliance.

Conduct a review of the company's internal culture

Even if training emphasizes the importance of compliance, employee awareness needs to change in order to put it into practice in the workplace. If employees' awareness of compliance has waned as they prioritize results, the first step is to review the internal culture of the company.

It is recommended that management communicate the importance of compliance management to employees by disseminating information on what to do if fraud is discovered.

Properly manage documents, etc.

If you handle a large number of documents on a daily basis, you must properly manage them. If sensitive documents are accessible to anyone or not filed, reconsider the management method.

If you are feeling the limitations of paper-based management, a paperless approach is recommended. There are many advantages, such as easy sharing and cutting printing costs.

Establish a compliance consultation service

To prevent rampant fraud within your company, set up a compliance consultation service. If there is an environment in which fraud can be brought to light from within the company, it will be possible to take prompt action when a problem arises.

It is important to respect the whistleblower's wishes by not treating the whistleblower unfavorably.

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Key points when implementing compliance management


In order to implement compliance management, it is important to keep the following points in mind. Keep the following two points in mind when implementing compliance management.

Management provides leadership.

Unless management demonstrates a strong commitment to implementing compliance management, employees will not recognize the importance of compliance. By ensuring that fraud will never occur and by demonstrating serious leadership by management, employees will become more aware of the importance of compliance.

Develop a dedicated compliance staff

To implement compliance management over the long term, develop dedicated compliance personnel in your company. Although a third-party checking organization can be used, if you train a person in charge within your company in advance, you will not need to rely on outside personnel.

Make an effort to have a dedicated person in each department, if possible, by having them participate in outside workshops.

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In this issue, we gave an overview of compliance management, taking into account examples of compliance violations.

It is important for a company to work on strengthening compliance in order to continue its business activities. Management should be aware of the importance of compliance while also working on risk management.

Please use the compliance training contents of "learningBOX ON" to inform your employees about compliance within your company.
LearningBOX ONis a service that makes it easy to add company-required training content to learningBOX, an e-learning creation and management system. You can easily design your own original learning courses by combining them with your company's in-house content.

Compliance Trainingand ... andHarassment Trainingcontent and more are available free of charge, so we encourage you to use them for your in-house training.

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It's no longer someone else's business! Compliance and CSR affect corporate value

As the environment surrounding companies changes rapidly, the social responsibilities that companies must assume are also expanding, and the importance of compliance in companies is increasing year by year. Compliance here goes beyond legal compliance and includes the fulfillment of CSR. You may think that "compliance and CSR are only for large companies," but in recent years, companies...

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