LEGAL compliance is a set of rules, such as a specification, policies or law which ensures an organization is following the standards set for the industry or institution by the respective authority. The rules which govern the organizations are usually set by government or parliamentary legislation or via government LEGAL authorities for organizational, social, environmental and economic betterment. The norms and rules are related to various issues such as economic, public interest, and environmental.
Due to the increasing number of regulations and need for operational transparency, organizations are desirous to achieve in their effort to ensure that they are aware of and are taking measures to comply with relevant policies, laws and regulations. Since laws have been evolving, regulations have always been a political debater’s hot topic. Some say that regulations are downgrading the work of organizations and there should be a free and liberalized economy where as some economists and political thinkers say that LEGAL compliance plays a vital role in promoting assessment of risk. However, since governments have formulated LEGAL compliances, the organizations must cohere to the LEGAL compliances and toe the line or else will have to face the consequences.
1. Risk Management has become a major issue for the private and public organizations for which the organizations are assessed for compliance with economic, social and environmental norms and measures. Often, the organizations deal with various aspects such as health, security, finance, safety and environmental. Moreover, it offers a plethora of complex new products and services to the customers which are a result of technology revolution and various neo-economic policies. In order to identify and assess factors of risk, the government needs to formulate LEGAL compliance for all the sectors of organizations.
2. Most of the governments at various levels have enacted manifest plans in order to ensure appropriate response policy to prevent the risks and to alleviate their effects whenever they occur in the due process of organization’s work. As the organizations grow, complexity and independence of the organizations also grows, thus, it is the government’s duty to apprise the organizations about the policies. In order to achieve the goal, the governments have enacted risk regulation measures to intensify compliance.
3. In order to gain the trust of stakeholders, which includes investors as well as customers, LEGAL compliance ensures efficiency and accountability of the product.
4. LEGAL compliance also improves the credibility of the organizations and raises them as a socially and environmentally responsible entity in the market. It also provides benefits to some sections of the society including the labors, employees as well as protects the indemnities of the employer.
5. LEGAL Compliance ensures that whether an industry is following proper technologies for the environment or not. The Industries must toe the line with the LEGAL Compliance or else they may have to face necessary interdictions by the appropriate authorities.