About the Calculation of the Compliance Value and its Practical Relevance

Corporate investment in compliance in general and compliance management systems (CMS) in particular, follow the cardinal management obligation to always obey the law (so-called “management duty to legality”). But does the compliance function as any other corporate investment really add value favori...

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Autor principal:	Hans-Ulrich Westhausen
Formato:	article
Lenguaje:	EN
Publicado:	Vilnius University Press 2021
Materias:	Compliance Management System added value ISO 37301 Three lines of defense Commerce HF1-6182 Economics as a science HB71-74
Acceso en línea:	https://doaj.org/article/1d225d77de4e4221a8ea931e6081f410
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spelling	oai:doaj.org-article:1d225d77de4e4221a8ea931e6081f4102021-11-17T09:30:16ZAbout the Calculation of the Compliance Value and its Practical Relevance 10.15388/Ekon.2021.100.2.81392-12582424-6166https://doaj.org/article/1d225d77de4e4221a8ea931e6081f4102021-11-01T00:00:00Zhttps://www.zurnalai.vu.lt/ekonomika/article/view/24471https://doaj.org/toc/1392-1258https://doaj.org/toc/2424-6166 Corporate investment in compliance in general and compliance management systems (CMS) in particular, follow the cardinal management obligation to always obey the law (so-called “management duty to legality”). But does the compliance function as any other corporate investment really add value favoring all shareholders? The socially desired answer should be probably “yes”, but the business reality shows a different picture: the measurement of the compliance value is a “blind spot” in the scientific theory and research as well as in the corporate practice. This paper analyzes reasons for that “blind spot” and explores the systematization of the compliance value drivers setting up a practical model that monetarizes these effects as well as calculating the added value and ROI of compliance. The author concludes that this quantification is particularly relevant to practice, as the compliance function must be able to measure the quantified impact(s) of the compliance function in order to demonstrate its value to management, shareholders, as well as all interested parties, and to justify and strengthen its role increasing the effectiveness of the CMS as part of the company’s “second line of defense”. Hans-Ulrich WesthausenVilnius University PressarticleCompliance Management Systemadded valueISO 37301Three lines of defenseCommerceHF1-6182Economics as a scienceHB71-74ENEkonomika, Vol 100, Iss 2 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Compliance Management System added value ISO 37301 Three lines of defense Commerce HF1-6182 Economics as a science HB71-74
spellingShingle	Compliance Management System added value ISO 37301 Three lines of defense Commerce HF1-6182 Economics as a science HB71-74 Hans-Ulrich Westhausen About the Calculation of the Compliance Value and its Practical Relevance
description	Corporate investment in compliance in general and compliance management systems (CMS) in particular, follow the cardinal management obligation to always obey the law (so-called “management duty to legality”). But does the compliance function as any other corporate investment really add value favoring all shareholders? The socially desired answer should be probably “yes”, but the business reality shows a different picture: the measurement of the compliance value is a “blind spot” in the scientific theory and research as well as in the corporate practice. This paper analyzes reasons for that “blind spot” and explores the systematization of the compliance value drivers setting up a practical model that monetarizes these effects as well as calculating the added value and ROI of compliance. The author concludes that this quantification is particularly relevant to practice, as the compliance function must be able to measure the quantified impact(s) of the compliance function in order to demonstrate its value to management, shareholders, as well as all interested parties, and to justify and strengthen its role increasing the effectiveness of the CMS as part of the company’s “second line of defense”.
format	article
author	Hans-Ulrich Westhausen
author_facet	Hans-Ulrich Westhausen
author_sort	Hans-Ulrich Westhausen
title	About the Calculation of the Compliance Value and its Practical Relevance
title_short	About the Calculation of the Compliance Value and its Practical Relevance
title_full	About the Calculation of the Compliance Value and its Practical Relevance
title_fullStr	About the Calculation of the Compliance Value and its Practical Relevance
title_full_unstemmed	About the Calculation of the Compliance Value and its Practical Relevance
title_sort	about the calculation of the compliance value and its practical relevance
publisher	Vilnius University Press
publishDate	2021
url	https://doaj.org/article/1d225d77de4e4221a8ea931e6081f410
work_keys_str_mv	AT hansulrichwesthausen aboutthecalculationofthecompliancevalueanditspracticalrelevance
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About the Calculation of the Compliance Value and its Practical Relevance

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