The culture of compliance as the key to sustainable corporate governance

The reactions to this are well known: ever more and ever stricter laws. But also in the business world, the major car manufacturers, for example, are asking their suppliers more and more about their compliance. There is no doubt that suppliers must fulfil certain minimum requirements for a compliance management system if they want to continue working for these companies. In the meantime, the trend has both deepened and broadened. It is no longer sufficient to have a code of conduct and the usual compliance guidelines. Instead, suppliers must also be able to answer questions relating to the company's compliance processes, such as compliance risk management. The tier 1 supplier is also expected to cascade these requirements down to the tier 2 supplier and in turn check whether the tier 2 supplier is adhering to the requirements.

At the same time, social and environmental sustainability issues are increasingly being scrutinised, giving the justified impression that compliance and sustainability are two sides of the same coin. And indeed, these topics have become an integral part of modern corporate management.

Compliance and corona
The question of the one cause or causal relationship that led to the above-mentioned serious compliance breaches cannot be answered by legal means. This has also been evident during this period of seemingly never-ending, difficult living conditions in which we have found ourselves since March 2020 due to the coronavirus pandemic.

There were and are a whole series of relatively simple legislative guidelines that would have made it difficult or even impossible for the virus to spread and, at a later stage, become even more dangerous through mutations. Did everyone follow these few simple rules? We all know the answer... After the appeals failed to have the desired effect, the regulations became more numerous, more detailed and therefore more complicated. People became increasingly desperate and some tried to find loopholes in the maze of regulations for themselves instead of sticking to the spirit of the rules - preventing the virus from spreading by avoiding contact, keeping their distance, wearing masks, etc. The virus is still mercilessly exploiting this misbehaviour.

It is hardly any different in a company. The vast majority of employees, managers and members of management behave in accordance with the rules because they believe it is the right thing to do, because they have understood that the arbitrary violation of rules by individuals means the end of peaceful and orderly coexistence for all, as philosophers such as Thomas Hobbes and John Locke recognised as early as the 17th century.

Breaking the simple coronavirus rules costs human lives, while breaching compliance requirements can not only jeopardise a company's existence, but also drive it into insolvency and destroy values and jobs.