What is Compliance—and What Should a Modern Corporate Compliance Program Include?

Compliance is more than just a legal buzzword—it’s a practical, essential part of running a modern business. At its core, compliance means ensuring that your company follows the laws, regulations, and ethical standards that apply to its operations. But a truly effective compliance program goes beyond legal minimums. It fosters a culture of integrity, reduces risk, and helps the company navigate today’s complex and fast-evolving business environment. How do you build such a program? The U.S. Sentencing Guidelines and decades of corporate best practices point to seven core elements that every modern compliance program should include. In this post, we’ll break them down—and offer practical tips for putting them into action.

Written Policies and Procedures

An effective compliance program starts with clear, written policies and procedures. These should:

• Articulate your company’s commitment to legal compliance and ethical conduct

• Address key risk areas relevant to your business (e.g., data privacy, anti-bribery, competition, workplace harassment)

• Provide clear, practical guidance for employee behavior

• Explain how to report concerns and how the company will handle them

Policies should be accessible to all employees, updated regularly, and integrated into day-to-day business—not buried in a binder or an intranet page no one reads.

Governance and Oversight

Leadership must not only endorse the compliance program—they must be actively engaged in it. An effective program includes:

• Board-level oversight of compliance efforts and risks

• Senior management ownership of program implementation

• Designation of a compliance officer or team with sufficient resources, authority, and independence

• Ongoing engagement between compliance leaders and the Board

Regulators and stakeholders increasingly expect companies to demonstrate that compliance is driven from the very top—not delegated to a mid-level function.

Effective Training and Education

Policies alone don’t create a culture of compliance. Training and education are essential to bring your program to life. A strong compliance program includes:

• Onboarding training for new hires on compliance principles and key policies

• Annual refresher training for all employees

• Tailored training for higher-risk roles (e.g., sales, procurement, finance, operations)

• Leadership training to reinforce tone from the top and accountability

• Practical, interactive training—not just passive check-the-box modules

Employees should understand not just what the rules are, but why they matter and how to apply them in real-world situations.

Effective Lines of Communication

Employees must feel empowered—and safe—to raise concerns about potential misconduct. Your compliance program should include:

• Multiple channels for employees to report concerns (hotlines, web portals, open-door policies)

• Confidential and anonymous reporting options where permitted

• Clear anti-retaliation protections and leadership messaging that reporting is encouraged and supported

• Feedback loops so employees understand that concerns are heard and addressed

  
  

Encouraging a “speak up” culture is one of the most powerful ways to detect and prevent compliance issues.

Internal Auditing and Monitoring

Compliance is not a set-it-and-forget-it exercise. Ongoing auditing and monitoring are critical to ensuring that policies are followed and risks are managed. This includes:

• Regular internal audits of compliance with key policies and controls

• Monitoring of high-risk activities and third-party relationships

• Use of data analytics to identify trends or red flags

• Follow-up reviews after investigations or corrective actions

Monitoring also helps companies continuously improve their compliance programs and respond to evolving risks.

Enforcement and Disciplinary Guidelines

No compliance program is credible without consistent enforcement. Your program should clearly:

• Define the consequences of misconduct and policy violations

• Ensure that discipline is applied fairly and consistently, regardless of employee level or role

• Hold management accountable for fostering (or undermining) compliance culture

• Document and communicate disciplinary actions as appropriate to reinforce expectations

When employees see that compliance matters—and that violations carry consequences—they are far more likely to take the program seriously.

Prompt Response

Even the best compliance program can’t prevent every issue. What matters is how the company responds when concerns arise. An effective program includes:

• Timely investigation of reported concerns

• Fair and thorough investigations, with appropriate documentation

• Corrective action to address confirmed violations

• Root cause analysis to prevent recurrence

• Program updates based on lessons learned

Prompt, transparent response not only reduces legal risk but also builds trust within the organization.

Final Thoughts

A modern compliance program is not just about avoiding penalties—it’s about building a sustainable business with a strong ethical foundation. The seven core elements—policies, governance, training, communication, monitoring, enforcement, and response—create a framework that helps companies:

• Manage risk

• Foster trust with employees and stakeholders

• Build a culture of accountability and integrity

Whether your company is launching a new program or strengthening an existing one, aligning with these seven elements is a great place to start. And remember: an effective compliance program is not static—it’s a living system that evolves with your company, your industry, and the world.