Over the past decade, the role of compliance functions within organizations has progressed significantly. Traditionally, compliance was responsible primarily for ensuring the company’s compliance with regulation, particularly that Relations to bribery and corruption. They developed codes of conduct, supplier due diligence process and the like and were responsible for ensuring compliance with these by employees of the company
The rising importance of corporate governance has helped reshape this role and now, compliance officers are involved in the early stages of decision-making processes, contributing not only to regulatory compliance but also to the strategic assessment of risk
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From Control Function to Strategic Intelligence
Because compliance teams continuously monitor regulatory developments, enforcement trends, and internal risk indicators, they often possess a privileged perspective. This perspective can provide senior leadership with valuable information to anticipate regulatory changes, emerging requirements, or potential reputational risks that may affect the organization’s activities. When compliance is effectively integrated into decision-making processes, it can help organizations:- Anticipate potential obstacles before committing to significant investments,
- Entering new markets,
- Implementing major organizational changes,
- Contributing not only to risk mitigation but also to more informed strategic planning.
Compliance and Decision-Making in Complex Regulatory Environments
Global companies increasingly operate in fragmented and rapidly changing regulatory environments. From anti-corruption regulations and data protection laws to sector-specific requirements, legal frameworks can vary significantly across jurisdictions. In this context, strategic decisions such as entering new markets, forming international partnerships, or adopting new technologies require careful consideration of their regulatory implications. Compliance officers can play a critical role in these processes by helping organizations assess risks related to:- regulatory differences across jurisdictions,
- anti-corruption and transparency requirements,
- data protection and cybersecurity obligations,
- sector-specific regulatory frameworks.
The Cost of Non-Compliance
The financial and reputational consequences of regulatory breaches have increased significantly in recent decades. High-profile cases illustrate the scale of these risks. For example, Siemens paid approximately $1.6 billion in corruption-related fines in 2008, while the Volkswagen emissions scandal generated more than $30 billion in penalties and settlements. Beyond financial sanctions, non-compliance can lead to reputational damage, operational restrictions, the banning of access to public contracts, and increased regulatory scrutiny. These risks have reinforced the importance of robust compliance functions within organizations.Emerging Areas Covered by Modern Compliance Functions
The scope of compliance responsibilities has expanded considerably as regulatory environments have become more complex. In addition to traditional areas such as anti-corruption and regulatory adherence, modern compliance functions increasingly address issues including data protection, cybersecurity, human rights, international sanctions, competition law, ESG-related obligations, and the governance of emerging technologies such as artificial intelligence.The Profile of the Future Compliance Officer
As the strategic importance of compliance grows, expectations for those leading to this function are also changing. While legal and regulatory expertise remains essential, organizations increasingly seek professionals who combine technical knowledge with a broader understanding of the business. The compliance officer of the future must not only interpret regulations but also understand how regulatory risks can influence business strategy. Key capabilities that are increasingly valued include:- strategic thinking and risk analysis
- the ability to communicate effectively with senior leadership and the board
- a deep understanding of the organization’s business model
- leadership skills to promote an ethical culture across the organization
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Beatriz Baker Araujo
Former Partner at Baker McKenzie, advising boards and global organizations on corporate governance, ESG, and complex regulatory and strategic matters.
