What is compliance?

Compliance is the process of meeting the laws, regulations, standards, policies, contractual requirements, and ethical expectations that apply to an organization. In simple terms, compliance helps organizations understand what they are required to do, assign ownership, operate controls, evidence activity, and respond when something goes wrong.

In governance, risk, and compliance (GRC), compliance matters because it connects obligations to real business activity. It is not enough to know that a requirement exists. Organizations need to show who owns it, what control supports it, what evidence proves it, and how issues are escalated.

ISO 37301 describes compliance management systems as a way to establish, develop, implement, evaluate, maintain, and improve an effective and responsive compliance management system within an organization. ISO also says ISO 37301 helps organizations ensure adherence to laws, regulations, and ethical standards, while supporting integrity, governance, and reputation.

That is the practical point. Compliance should not sit in a policy folder. It should be built into how the organization works.

ORIGINS

Why do organizations need compliance?

Organizations need compliance because operating without clear obligations, controls, and evidence creates legal, financial, operational, and reputational risk.

A compliance requirement may come from a law, regulator, industry standard, internal policy, contract, customer requirement, certification scheme, or code of conduct. The challenge is that those requirements rarely sit in 1 place. They often spread across functions, jurisdictions, systems, third parties, and business processes.

A compliance process gives organizations a way to answer:

• What obligations apply?
• Who owns each obligation?
• What policy or control supports it?
• What evidence proves the activity happened?
• What issues or breaches have occurred?
• What action is being taken?
• What needs escalation?
• What should be reported to leadership, regulators, auditors, or the board?

The pressure is rising. PwC’s Global Compliance Survey 2025, based on more than 1,800 business, compliance, and risk leaders across 63 territories, found that 85% of respondents said compliance requirements had become more complex over the last 3 years.

That matters because more complexity cannot be managed properly with more chasing, more spreadsheets, and more manual reporting.

PROCESS

Why does compliance matter?

Compliance matters because it helps organizations operate legally, ethically, and consistently.

Weak compliance can lead to regulatory breaches, enforcement action, financial penalties, customer harm, operational disruption, employee misconduct, reputational damage, and loss of trust. Strong compliance gives the organization a clearer way to prevent, detect, respond to, and evidence issues.

Compliance helps organizations:

• identify legal, regulatory, policy, and contractual obligations
• assign ownership clearly
• connect obligations to controls and processes
• manage policies, attestations, and training
• track issues, breaches, exceptions, and remediation
• support audit and assurance activity
• provide evidence for regulators, boards, and stakeholders
• reduce duplicated compliance work
• support more confident decision-making

The business value is increasingly clear. PwC’s Global Compliance Survey 2025 found that technology investment helped respondents achieve better visibility of risks and risk management activity for 64%, faster identification and response to compliance issues for 53%, higher-quality or more insightful reporting for 48%, faster or more confident decision-making for 46%, and increased productivity, efficiencies, and cost savings for 43%.

That is the value-based GRC angle. Compliance should reduce uncertainty and friction, not add more administration.

The US Department of Justice’s Evaluation of Corporate Compliance Programs also makes the practical expectation clear by asking 3 core questions:

Those questions are useful beyond enforcement. They cut through the noise. A compliance program is not judged only by whether it exists. It is judged by whether it works.

What does compliance look like in practice?

In practice, compliance usually involves:

• identifying applicable laws, regulations, standards, policies, contracts, and ethical requirements
• maintaining an obligations register
• mapping obligations to policies, controls, owners, and processes
• assessing compliance risk
• creating and maintaining policies and procedures
• training employees and recording attestations
• operating controls and collecting evidence
• tracking compliance issues, breaches, exceptions, and incidents
• managing remediation actions
• monitoring regulatory change
• reporting to leadership, committees, auditors, regulators, and the board
• reviewing whether the compliance program remains effective

Compliance is not 1 activity. It is a connected set of processes that helps the organization understand what is required, prove what has happened, and respond when something changes.

PEOPLE

Who is responsible for compliance?

Responsibility for compliance sits across the organization. The compliance team may coordinate the framework, but business teams usually own the activity that must comply.

Common stakeholders include:

1. The board

The board oversees material compliance risks, expects reliable reporting, and challenges whether the compliance program is effective.

2. Senior leadership

Senior leaders set expectations, allocate resources, and make sure compliance is embedded into business priorities and decision-making.

3. Compliance teams

Compliance teams identify obligations, design the compliance framework, support monitoring, advise the business, manage reporting, and challenge whether controls are working.

4. Legal teams

Legal teams interpret laws, regulations, contracts, enforcement risks, and legal obligations.

5. Risk teams

Risk teams connect compliance risks to the wider enterprise risk framework, risk appetite, controls, and reporting.

6. Policy owners

Policy owners maintain the rules, standards, and procedures that guide compliant behavior.

7. Control owners

Control owners operate and evidence the controls that support compliance.

8. Business managers

Business managers are responsible for applying compliance requirements in day-to-day activity.

9. Internal audit and assurance teams

Internal audit and assurance teams test whether compliance controls, reporting, and remediation processes are operating effectively.

10. Employees

Employees play a practical role because many compliance failures happen where day-to-day decisions are made.

Compliance works best when it is clear, usable, and embedded. If the business sees compliance as an external checkpoint, issues will surface too late.

TECHNOLOGY

What do good compliance tools look like?

Good compliance tools should help organizations move beyond static obligation lists, manual evidence collection, and fragmented issue tracking.

A spreadsheet can record a requirement. It cannot always show whether the requirement has an owner, whether the control is operating, whether evidence has been uploaded, whether an issue has been remediated, or whether leadership has the latest position.

Strong compliance tools should support:

• obligation registers
• regulatory change tracking
• policy management
• control mapping
• compliance assessments
• evidence collection
• issue and breach management
• remediation action tracking
• attestations and training records
• approvals and escalation workflows
• audit trails
• dashboards and reporting
• links between compliance, risk, controls, audit, policies, third parties, and incidents
• reporting by regulation, entity, region, business unit, control, or owner

The goal is not to create a more complex compliance process. It is to make compliance easier to manage, evidence, and report.

How CoreStream GRC helps with compliance

The CoreStream GRC point of view is simple: compliance should be connected to ownership, controls, evidence, and action.

Too often, compliance teams are left managing obligations across spreadsheets, emails, policies, shared folders, and disconnected systems. That makes it harder to know what applies, who owns it, whether controls are working, and what evidence supports the position.

CoreStream GRC Compliance Management software helps organizations document, manage, and monitor compliance requirements through connected workflows, clear ownership, remediation tracking, and assurance.

The platform can help teams connect:

• obligations
• policies
• controls
• owners
• assessments
• evidence
• issues and breaches
• remediation plans
• approvals and escalations
• reporting and dashboards
• audit trails

CoreStream GRC is flexible and no-code, so organizations can shape compliance workflows around their own regulatory environment, operating model, and risk appetite. That matters because compliance is not the same in every business. A healthcare provider, financial services firm, energy company, retailer, public sector body, and global enterprise will all have different obligations and evidence needs.

The aim is not more compliance activity. It is clearer accountability, better evidence, and more useful reporting.

As Paul Cadwallader, GRC Strategy Director at CoreStream GRC, explains:

Common challenges with compliance

Organizations often struggle with compliance when:

• obligations are spread across different teams and documents
• ownership is unclear
• policies are out of date
• controls are documented but not evidenced
• compliance evidence is collected manually
• issues and breaches are not tracked consistently
• remediation actions are overdue or unclear
• regulatory change is not linked to internal controls
• reporting is too manual or too high-level
• business teams do not understand what they need to do
• compliance, risk, audit, and controls sit in separate systems
• audit trails are difficult to reconstruct

The practical test is simple: can the organization show what requirement applies, who owns it, what control supports it, what evidence exists, and what action is needed?

Compliance best practices

Strong compliance usually depends on:

• clear compliance obligations
• defined roles and responsibilities
• visible ownership
• policies that are current and usable
• controls mapped to obligations
• evidence requirements
• issue and breach workflows
• remediation tracking
• regular monitoring and review
• escalation routes
• compliance reporting that supports decisions
• audit trails that prove what happened

ISO 37301 emphasizes that compliance management should support integrity, governance, reputation, and ethical business practices. That is important because good compliance is not just about avoiding penalties. It is about helping organizations act consistently and responsibly.

The OECD Good Practice Guidance on Internal Controls, Ethics, and Compliance also makes the point that effective compliance programs should be designed to prevent and detect misconduct, not simply exist as paperwork.

The best compliance program is practical, risk-based, and evidence-led. It gives the business a clear way to do the right thing without slowing every decision down.

Make compliance easier to manage and evidence

Looking to make compliance easier to manage, evidence, and report? Explore how CoreStream GRC Compliance Management software helps teams connect obligations, controls, actions, owners, and evidence in 1 flexible platform.

Recommended reads

• ISO 37301: Compliance management systems
• PwC: Global Compliance Survey 2025
• DOJ: Evaluation of Corporate Compliance Programs
• OECD: Good Practice Guidance on Internal Controls, Ethics, and Compliance
• CoreStream GRC: Compliance Management software
• CoreStream GRC: What is value-based GRC?

FAQs on compliance