Is compliance a duty for companies?

Posted on by Giancarlo Olsen


Is compliance a duty for companies? Today, compliance is no longer an option for companies, but an obligation in order to successfully avoid criminal violations, horrendous fines and claims for damages by third parties. In the narrower sense, the term compliance means adherence to the law by the company and its employees.

What is a goal of compliance? One goal of compliance is to ensure that violations can be avoided or prevented. With a functioning compliance structure in the company, companies can protect themselves against criminal offenses and the associated fines.

What is the compliance organization obligation?

Obligation to establish a compliance organization 1 if the company is listed on the stock exchange, 2 if legal violations have already occurred or 3 if legal violations are likely.

What does compliance management mean? In a narrower sense, the term compliance means adherence to the law by the company and its employees. Accordingly, compliance management is nothing more than a structured set of internal rules and guidelines that are adhered to by the company's employees.

What is the Board supposed to have demanded on the subject of compliance?

In the current version of 2019, A.2 on the subject of compliance requires: "The management board shall ensure that a compliance management system is in place that is aligned with the company's risk situation and shall disclose its basic features.

How should the activities of the compliance function be defined?

The scope and focus of the compliance function's activities shall be determined on the basis of a risk analysis. The compliance function shall conduct such a risk analysis at regular intervals in order to review the timeliness and appropriateness of the determination.

What regulations apply to compliance in the company? Compliance in the company has several functions: Legal foundations for compliance in investment services can be found in (this contains a reference to Sections 25a, 25e KWG) and in Art. 22 MiFID II Regulation.

What does the auditing standard offer for compliance officers in companies?

The auditing standard offers those responsible for compliance in companies an orientation as well as a basis for complying with laws, regulations and voluntary commitments within the framework of a compliance management system.

What processes are performed in the Compliance Management System audit? corporate processes (e.g. procurement or contract management) or the organization of compliance with voluntary commitments. Upon completion of the compliance management system audit, reporting on the effectiveness audit will take place, taking IDW PS 980 into account.

What is the auditing standard for compliance management?

IDW PS 980: The auditing standard for compliance management The ISO 19600 guideline is available for auditing the adequacy and effectiveness of a compliance management system (CMS) or individual CMS processes.

What auditing and certification standards are established?

An example of established auditing and certification standards is, for example, the IDW auditing standard "Principles of Proper Auditing of Compliance Management Systems" (IDW PS 980). The results of external audits of the CMS can be used to "certify" an audited CMS.

How does a functioning compliance in the company work?

With a functioning compliance structure in the company, companies can protect themselves against criminal offenses and the associated fines. Coexistence within the company is also made more pleasant, as employees know exactly which regulations they must adhere to and what they are permitted to do accordingly.

How can compliance-relevant information be guaranteed? Compliance-relevant information should be made available both by the compliance officer and via the company's internal systems. In addition, up-to-date topics can be guaranteed via various trade journals or a compliance newsletter.

What is a functioning compliance organization? A functioning compliance organization can reduce criminal and civil law risks. Compliance management can also represent a competitive advantage, as many public-sector clients only award their contracts if proper compliance management can be demonstrated.

What is the certification of the compliance management system?

Certification of the compliance management system. The "Standard for Compliance Management Systems" (TR CMS 101:2011) is aimed at organizations such as companies, public authorities and non-governmental organizations (NGOs) and describes the elements that make up a functional and effective compliance management system.

What is a Compliance Management System? Compliance management system refers to the totality of measures and processes set up in the company to ensure conformity with rules. Every larger organization needs a systematically structured and sustainably maintained compliance system.

How does the certification of a Compliance Management System according to ISO 37301 work?

The implementation and certification of a Compliance Management System according to ISO 37301 helps you to address compliance with legal requirements and rules in a systematic, structured and proactive manner.

What are the goals of compliance in the company?

Compliance Goals. The objective of compliance in the company is to comply with the laws, regulations and requirements as well as the guidelines that the company voluntarily follows. Compliance risks. The German Federal Criminal Police Office conducted research on the topic of "internal perpetrators in companies".

What tasks does the Compliance Manager perform?

tasks of a compliance manager. In addition, the experts inform and train their employees in the prevention and detection of violations. Overall, the compliance manager makes a sustainable contribution to risk management and Group security in his role as advisor and controller.

What is the gross salary of a compliance officer?

However, you have to consider different grades here. Accordingly, it can be assumed that a Compliance Officer generally receives an average gross salary of between 60,000 and 75,000 euros, a Senior Compliance Officer around 70,000 to 100,000 euros and a Chief Compliance Officer between 90,000 and 200,000 euros per year.

What should the compliance officer prevent in the company?

As the extended arm of the state, the compliance officer is supposed to prevent criminal acts within the company. In its decision, the Federal Supreme Court imposed a guarantor obligation on the compliance officer to prevent criminal acts, which may lead to the officer's own criminal liability due to (intentional) omission.

Which departments does the Compliance Manager have?

The Compliance Manager has to organize the implementation of the compliance program in all departments and on all levels. This includes the supervisor down to the ordinary employee, and if necessary also suppliers or other companies with which the company cooperates.

Is the compliance function a management tool?

The compliance function is an instrument of the Executive Board. It may also report to a member of the management. Notwithstanding the foregoing, it must be ensured that the chairman of the supervisory body, with the involvement of the management, can obtain information directly from the compliance officer 1

How does compliance improve in the company? Compliance also increases trust among business partners and customers and helps managers and employees identify more closely with their company (corporate identity). Compliance improves the quality of processes in the company. In short: Compliance creates trust.

Aren't members of management responsible for compliance? This means that board members or members of management who are not responsible for compliance must monitor their colleague who is. If there are indications that the person responsible for compliance is not performing his or her duties properly, the other members must intervene.

What is compliance accountability?

This means that compliance responsibility must be defined in terms of personnel. In principle, ensuring compliance is a "matter for the boss" and is the overall responsibility of the management. This is because the board of directors or managing director is obliged to organize the company in such a way that all legal provisions are complied with.

What is the criminal liability of the compliance officer? The compliance officer's liability under civil law, but also under criminal law, is becoming increasingly explosive for the profession. The compliance officer's risk of being literally taken into custody under criminal law in the event of serious breaches of the rules should not be underestimated.

What should the compliance officer do?

"Compliance Officers", the criminal law risks to which he or she may be exposed and is to provide instructions for action to avoid possible criminal liability. As a manager, the compliance officer is responsible for ensuring that legal guidelines laid down in the company are adhered to.

What does the compliance function do?

The compliance function fulfills its task by advising the business units and specialist areas on the effective design of the CMS. In addition, the Compliance function advises the business units in critical compliance decision-making situations.

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