COMPLIANCE: What is it and where do you see compliance in our country?

“Compliance” – a term increasingly used nowadays – is an unfamiliar concept to many. What is it? Where can one encounter “compliance”?

What is it?

In business, compliance is defined as a process or internal program that ensures that the relevant organization, its management, employees and often business partners, suppliers and other third parties comply with all international and European regulations, domestic laws, ethical rules and standards – in short, all rules that apply to the organization and the industry. This is not a purely legal concept. For modern businesses today, compliance should be a natural part of their internal strategy and corporate culture.

What is compliance for?

Enforcement of the “rules of the game” helps organisations to prevent and detect breaches, protecting them from, for example, fines and litigation, but also other negative consequences or general inefficiencies. Corporate compliance programmes, therefore, aim to keep organisations operating legally, safely, responsibly and sustainably. Compliance programmes consist of many specific areas such as competition, data protection and information security, corruption and bribery prevention, contract law, tax law, third-party vetting, conflicts of interest, etc.

At the same time, an effective compliance program can teach employees how to conduct themselves professionally and uphold company values in and out of the workplace. It also improves communication between an organization’s leadership and its employees. A key element of a functional compliance program is the ongoing identification and management of risks.

What makes compliance relevant?

In the Czech Republic, compliance is primarily associated with corporate criminal liability, due diligence, personal data protection, as well as corporate social responsibility (today better known as “ESG”) – this is usually the primary motivation for implementing compliance programs. Abroad, compliance is a fully established topic. In addition, the need to integrate compliance programmes into foreign organisations has been spurred by the adoption of very strict anti-corruption laws with serious penalties for breaches. Foreign models also suggest that, in the long run, a compliance program can be a significant competitive advantage that enhances the value of an organization.

This is because a modern and effective compliance programme relies on the organisation’s own willingness to comply with rules and ethical values. In doing so, the organisation demonstrates its commitment and internal quality. This gives it credibility with external partners and makes it much more attractive as an employer to its employees.

Where can you find compliance at FIR?

Students of our school can now learn in detail the theoretical basics of compliance and be able to set up compliance programs in practice – in the courses 2PR418 Business Ethics and Compliance and 2PR511 Compliance and Business Ethics, under the guidance of an experienced teacher and compliance manager Ing. Lucie Andreisová, Ph.D. The newly opened minor specialization of the Department of Corporate and European Law at the Faculty of Business Administration of the Prague University of Economics and Business, called 2CG – Compliance, Risk, and Governance, is based on and around compliance. It is taught in English and is a perfect theoretical and practical training for future ESG, compliance and risk managers.

Ing. Lucie Andreisová Ph.D.

She graduated in “Business and Law” at the Faculty of Economics, Prague University of Economics and Business. She has been a lecturer at the department since 2012 and successfully received her Ph.D. She focuses on the management and governance of business corporations and their internal control mechanisms, including in her professional practice as Director of Compliance and Ethics for the Central Europe region at Tesco Stores.