What is the primary purpose of a compliance program?

The primary purpose of a compliance program is to develop frameworks and practices that support an entity in adhering to applicable laws and regulations. This foundational aspect is crucial for organizations to operate legally and ethically within their industries. A well-structured compliance program helps in identifying risks, establishing internal controls, and ensuring that employees are educated about legal obligations, which collectively foster a culture of compliance.

While increasing shareholder value, reducing operational costs, and improving employee morale are important considerations for any business, they are not the primary focus of a compliance program. An effective compliance program serves as a critical mechanism to mitigate risks related to legal and regulatory non-compliance, ultimately ensuring the organization's sustainability and credibility in the marketplace. By laying the groundwork for compliance, organizations can indirectly achieve those other goals, but the central aim remains focused on compliance itself.