In simple terms, compliance means adherence to or conformity with rules. The term is used as a synonym for the organizational and supervisory measures within a company that are conducive to compliance with applicable laws, guidelines and other (voluntary) regulations in Germany.
Compliance is relevant for all companies in Germany
This rather abstract paraphrase demonstrates the significance of compliance because every company has multiple points of contact: There are compliance-relevant points of contact both within the company in the daily work routine and in interaction with the outside world (such as with business partners or (tax) authorities).
Severe penalties for compliance violations
If compliance with German rules and laws is not ensured by appropriate (organizational and structural) measures, there is a risk of
- fines and penalties pertaining to the persons involved
- personal (unlimited) civil liability of the acting organs (including executive employees)
- ineffectiveness of concluded contracts
- damage to image and reputation
- discontinuation from large corporations/suppliers/authorities
Sustainable prevention of liability risks
The importance of functioning compliance structures is now also becoming increasingly clear to smaller and medium-sized companies and enterprises – against the backdrop of the current external influencing factors and media-effective liability cases involving managers of larger groups as well. Functioning compliance structures can prevent liability risks within the company and for executives (personally) in the long term.
Individual compliance structures for each company
Compliance systems are, however, a “living” product and cannot simply be “imposed” on any corporate organization as they need to be adapted to the respective business field and the respective company or corporate structure on a case-by-case basis in order to achieve effective liability prevention.
Yet, what are adequate compliance structures and what does a functioning compliance system in Germany look like? WINHELLER’s experts will be happy to advise you on measures to be taken in your company.
Continue reading:
Compliance Management Systems in Germany
Compliance Management Structures in Germany: An Indispensable Tool For Release From Liability
