IT Governance

How Corporate Governance Policies Differ from Compliance

Corporate officers that oversee a company’s day-to-day operations and risk management set rules, regulations, and procedures known as corporate governance practices. Effective corporate governance policies guarantee that strategies and directives created under the corporate veil adhere to the organization’s compliance, the corporate environment’s ethical requirements, and fiduciary obligations. In contrast to corporate governance, compliance refers to a company’s ability to meet the legal and regulatory requirements set forth by its industry, operations, and jurisdiction. This article at Careers in Compliance explains the difference between corporate governance policies and compliance.

Governance Policies vs. Compliance

Corporate governance originates from internal sources, whereas compliance originates from external sources. Governance is a term that describes a collection of rules created by a corporation’s board of directors and executives. However, compliance is the requirement that your company must meet to operate legally. Governance, risk management, and compliance (GRC) —the three disciplines that combine a business’s ability to achieve goals reliably, deal with uncertainty, and behave with integrity—combine the two disciplines.

Corporate Governance Policies

Corporate governance describes the internal policies and procedures a company uses to manage itself, make informed decisions, abide by the law, operate per its principles, and satisfy the demands of external stakeholders.

Four essential elements form the basis of good governance:

  • Transparency: Defining the organizational structure, processes, and results
  • Stewardship: Fostering a comprehensive understanding that the organization is run for the benefit of all stakeholders
  • Accountability: Creating rules and guidelines that provide the appropriate individuals the authority to make decisions
  • Integrity: Establishing a culture dedicated to ethical conduct and legal compliance


Compliance guarantees that the rules established and governed internally or by an industry authority are adhered to. The organization can demonstrate that it takes the necessary precautions and implements robust controls to operate in line with industry standards or internal policies and procedures by adhering to specific regulatory requirements.

Furthermore, the article elaborates on the responsibilities of various governance and compliance professionals.

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