Compliance

Definition:

Compliance refers to the adherence to legal requirements, regulatory standards, and internal company policies.

Details:

A functioning compliance system protects against legal, financial, and reputational risks.

• Data protection, anti-corruption, IT security
• Environmental, Social, and Governance (ESG) standards
• Documentation and control obligations

Relevance in a transaction context:

Compliance is a critical part of due diligence. Weaknesses can lead to purchase price reductions, provisions, or contractual warranties.

Example: Missing internal policies or controls can deter investors or present deal risks.