ABC Limited was engaged in financing and developing infrastructure projects but now defaulted on several debt repayments due to the mismanagement and undisclosed liabilities in ABC group companies. It has triggered a sys

Compliance or Corporate Compliance , is the set of processes and procedures that a company has in place in order to make certain that the company and its employees are conducting business in a legal and ethical manner. Compliance refers to adhering with the mandated boundaries (laws and regulations) and voluntary boundaries (company's policies, procedures, etc.). Compliance means conforming to the stated requirements. At an organizational level, it is achieved through management processes which identify the applicable requirements (defined for example in laws, regulations, contracts, strategies and policies), assess the state of compliance, assess the risks and potential costs of non-compliance against the projected expenses to achieve compliance, and hence prioritize, fund and initiate any corrective actions deemed necessary. Fulfilling these compliance requirements requires a complex mechanism that includes policies and procedures, training, whistleblowing channels, internal audit, escalation, response and disclosure. The corporate compliance framework consists of three key components: Compliance Chart: The Chart provides an overview of the applicable local, state, central and international laws, regulations and standards relating to a business' operations. The compliance chart also outlines how compliance risk mitigation activities are embedded in business processes. In other words, how compliance with the laws, regulations and standards is embedded and ensured. The compliance chart help business in meeting its compliance obligations towards the customers, regulators, shareholders and employees. The compliance chart also reflects the key activities and compliance calendar which is to be followed and performed by a business unit to manage its compliance risks. Compliance Advisory: It advices on compliances of applicable laws and effect of non-compliances. Compliance advisory helps organisation to evaluate their compliance functions, prevent compliance breaches and respond quickly and effectively when a breach occurred. Compliance Scorecard: It is a tool to analyse the position of an organisation in compliance. A compliance scorecard must be set up by organizations. The scorecard is not to be used as a mere reporting but as a compliance management tool. It enables the reported compliance breaches' immediate remediation by informing a predefined responsible person in the case of a violation. Thus, this employee can directly start remediation activities. The tracking of the remediation activities' status is again included into the scorecard. An integrated escalation structure, predefined by organizational hierarchies ensures timely remediation. Also, the possibility of classifying a rule breach according to its level of risk must be included into the scorecard. So, a risk-prioritized remediation of violations can be ensured. Conclusion: The Corporate compliance management involves a full process of research and analysis as well as investigation and evaluation. Such an exercise is undertaken in order to determine the potential issues and get a realistic view about how the entity is performing and how it is likely to perform in the future. Corporates which ensure compliance are rewarded with positive public image and customer trust. Company Secretaries with core competence in compliance and corporate governance play a crucial role in the corporate compliance management in an organisation.