“Compliance” and “governance” are two things that protect corporate value, but what is the difference? In this article, we will explain the meaning and difference of each, the background to why they are attracting attention, and the measures that companies can take to strengthen them. We will also introduce a reassuring SAP GRC security solution that supports hardening.
What is the difference between compliance and governance?
There are many business terms that we seem to know, but do not know the exact meaning of when asked. To keep your business running smoothly, make sure you understand what each means.
What is compliance?
The word "compliance" includes the meaning of "obey". In the business world, it is translated as "legal compliance", but it is important to note that it includes a wide range of rules, such as ethics, norms, and morals, in addition to literal laws and regulations.
Compliance violations include a wide range of problems such as information leaks, window dressing, embezzlement, power harassment, and long working hours. Basically, it should be recognized as something that should be protected with common sense as a company or organization.
What is governance?
On the other hand, 'Governance' is a word that means 'to control', and when used in business, it is 'Corporate governance', that is, 'Corporate governance (appropriate management system of corporate management)'. ”.
Companies are always at risk of non-compliance. If such a thing were to happen, the trust of society, business partners, and customers would be lost in an instant, and management could be in jeopardy. In order to minimize the risks, companies need to put strict controls on themselves.
Conclusion: Differences Between Compliance and Governance
Compliance refers to "observance of laws and regulations", and governance refers to "internal management system of the company". Compliance is maintained by strengthening governance, so it can be said that compliance is included in governance.
Why Compliance and Governance Matter
So why is compliance and governance so important in today's companies? Also, let's see what the company should do.
Why Compliance Matters
It was in the 2000s that the word “compliance” became fully recognized by the public in Japan. Triggered by a series of corporate scandals, such as the problem of misrepresenting the origin of food products and the concealment of recalls by automobile manufacturers, the demand for thorough compliance among companies grew stronger, and the importance of compliance was recognized worldwide. became.
Why governance matters
The new Companies Act, enacted in 2005 and enforced in 2006, requires large companies with capital of 500 million yen or more or liabilities of 20 billion yen or more to establish an internal control system. An internal control system is a system that a company should maintain so that it can legally conduct business.
Governance has come to be emphasized as an initiative to achieve this. In particular, listed companies are working to strengthen governance, improve their own operations, and create mechanisms to prevent mistakes and fraud.
How to strengthen compliance and governance
Now that we've seen the meaning and importance of compliance and governance, let's look at ways to strengthen them.
How to strengthen compliance
First of all, regarding compliance, we will strengthen the check system to prevent violations within the company. For example, we will establish a double-check system in the backyard department such as the legal department.
It is also effective to conduct compliance training on a regular basis. A careless act by one employee, such as posting a customer's personal information on social media, can quickly erode the reputation of the entire company.
In addition, it is also a good idea to adopt tools that can ensure greater security in order to protect confidential information and prevent information leakage accidents for the tools used in business.
Let's work to strengthen compliance in terms of both people and things.
How to strengthen governance
On the other hand, in order to strengthen governance, the key is whether compliance and risk management are managed and controlled, and whether internal audits are objectively evaluated and controlled.
Specifically, it is important for the management to clarify the vision of what they want the company to be. When setting rules, it is a good idea to refer to the "Corporate Governance Code" published by the Tokyo Stock Exchange and the Financial Services Agency.
In addition, we will inform all employees of the measures that the company is taking to strengthen governance.
It is also essential to have a third-party perspective. For example, appoint outside directors and auditors, and carry out public relations activities outside the company on corporate governance efforts.
SAP GRC Security Solution Strengthens Compliance and Governance
So far, we have looked at measures to strengthen compliance and governance, but if you don't know where to start, one way is to use the "SAP GRC Security Solution". is. Let's take a closer look.
What is SAP GRC Security Solution?
The GRC security solution provided by SAP is a solution service that supports control by preventing or preventing governance and compliance risks and fraud for corporate organizations. There is a limit to human checks, so use an automatic monitoring service to protect your company's value and brand image.
Target GRC product example
GRC (Governance Risk Compliance) products covered by SAP GRC security solutions include:
- SAP GRC Access Control (AC)
is a package software mainly related to general access control. Privileged ID management, risk detection and analysis can be performed, and audit man-hours can be reduced by automating access management. - SAP Process Control (PC)
is software that enables compliance management and policy management for companies. Monitor your internal control environment, adjust policies to business objectives and manage the entire lifecycle appropriately. - SAP Risk Management (RM)
Risk management software to prevent loss of business value. It has the ability to detect, identify and analyze potential risks, as well as monitor and report risks automatically in real time. - SAP Audit Management (AM)
is software that improves the quality of internal audits. Features such as simplified audit reporting and automated audit cycles enable faster audits. - SAP Global Trade Control (GTS)
is software that can centralize global trade and compliance management. By automating the trade process, you can speed up your supply chain, reduce costs, and reduce the risk of customs fines. - SAP Business Integrity Screening (BIS)
Fraud detection tool that reduces financial risk in business-to-business transactions. Automatic, real-time detection and analysis of suspected fraudulent transactions and non-compliance incidents helps reduce costs associated with investigations and violations.
summary
Compliance refers to legal compliance, and governance refers to the management system that maintains compliance. Due to the recent social background and legal development, companies are required to strengthen both.
In addition to building an internal or third-party checking system, the use of software such as "SAP GRC Security Solution" will also help strengthen the system. We have a variety of software to suit your needs, so be sure to check them out.
No comments yet