Excerpt
May 7, 2020, Paper, "Regulatory compliance is vital for promoting the public values served by regulation. Yet many businesses remain out of compliance with some of the regulations that apply to them— presenting not only possible dangers to the public but also exposing themselves to potentially significant liability risk. Compliance management systems (CMSs) may help reduce the likelihood of noncompliance. In recent years, managers have begun using CMSs in an effort to address compliance issues in a variety of domains: environment, workplace health and safety, finance, health care, and aviation, among others. CMSs establish systematic, checklist-like processes by which managers seek to improve their organizations’ compliance with government regulation. They can help managers identify compliance obligations, assign responsibility for meeting them, track progress, and take corrective action as needed. In effect, CMSs constitute firms’ own internal inspection and enforcement responsibilities. At least in theory, CMSs reduce noncompliance by increasing information available to employees and managers, facilitating internal incentives to correct instances of noncompliance once identified, and helping to foster a culture of compliance. Recognizing these potential benefits, some government policymakers and regulators have even started to require certain firms to adopt CMSs."
Non-HKS Author Website - Jennifer Nash